Future Trends in HR Operating Models (Part 1)

As they say prediction is very difficult, especially about the future. At the EMRG BPO Conference in London Sheraton Park Lane Hotel on 22nd June, we had a panel discussion on the ‘next generation’ of HR Operating models. My thanks to the other panel experts and audience for providing the stimulating discussions.

(1) Workforce and economic changes will require HR to allocate more resources to delivering HR Strategy

We are living with unprecedented economic change and the long-term implications for industries and economies is unclear. What is clear is that organisations need to be quick to adapt and at the same time improve productivity. A key challenge for HR leaders is providing a Human Resources Strategy aligned with Organisational Goals, however for many organisations these goals are still in a state of flux.

There are also major changes in the workforce (slide 4). For example, since the mid 90s there has been a dramatic decline in the birth rate in the UK – there will be 60,000 fewer people reaching working age each year from 2010 onwards. This might be a good thing with a ‘contracting’ economy however there will be problems during the upturn. Better health, huge pension deficits and no radical changes in taxation will probably mean that we will need to work longer than previous generations. (See report from Bupa, The Oxford Alliance, RAND Europe and The Work Foundation Healthy Work: Challenges and opportunities to 2030)

In a recession, there are still talent management challenges, (slide 7), in attracting and retaining high performers and planning the next generation of leaders with the right skills. HR will need to allocate more resources to delivering the Talent Strategy to ensure organisations flourish in the future.

The diagram on slide 11 shows a ‘typical’ HR function with the majority of work (60-70%) estimated to be transactional or administrative. One key objective for HR Transformation is to allocate a larger proportion of resources to ’strategic HR’. There has been an interesting debate about why HR has struggled to move from the “Pyramid” to the “Diamond”. This is a complex picture, but factors include skill gaps in HR Transformation, HR technology not delivering and simply too much going on with running increasingly complex organisations.

(2) New tools will enable improvements in collaboration, productivity and managing the workforce

We are using a variety of social media and other tools from Twitter to Google to LinkedIn. Different groups use different tools in not so predictable ways, see article about Social Networks around the World.

In HR, according to research by Communications Management, 8 out of 10 HR professionals belong to online communities or social networking sites in their daily work. One in three (32.3%) have already asked for supplier recommendations through this medium. (See 52 ideas on using social media in HR with thanks to Michael Specht.)

Tools such as Success Factors can help actively manage talent in the workforce. The emergence of Software as a Service (SaaS) and its impact on HR, (read Steve Boese’s view on
“Does HR need IT?”) will bring more options and reduce the need for HR to make a massive up-front investment with a painful ERP business case. This will make talent management tools ubiquitous for most employees, rather than just those with more than 20,000 employees.

Although technology will help us collobarate, research, communicate and network, the biggest impact on organisations will be to radically change our expectations about what we need from organisational tools. Not only do we expect tools with fast access at all times, great content and global coverage. As Web 2.0 develops into Web 3.0, there will be a demand for more semantic tools that enable us make more meaningful connections with others and become more productive.

We are still in the early days of the web, it is impossible to predict the technology we will be using in 2020. To add even more value HR must understand these trends and support the workforce to become more productive. The technology we are now using every day outside the organisation is influencing the tools we use at work. HR should move towards becoming ‘technology champions’ as the potential benefits are huge.

See also Future Trends in HR Operating Models (Part 2)

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