The Advancing HR Function 2019
Attain HR excellence by expanding skill sets and identifying key roles
Posted on 05-27-2019, Read Time: Min
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Human Resources (HR) has come a long way over the last century, but what does its long-term future look like? That largely depends on key decisions today’s HR professionals will make over the next several years.
From February to April of 2019, HR.com fielded its second annual State of the Industry survey on the topic of The Advancing HR Function.
Below are several of the key findings from the study:
- Most HR professionals believe their departments are meeting the needs of their organizations today, but they are not well prepared for the near future.
- In most organizations, HR reports directly to the CEO and often has a “seat at the table,” but HR still suffers major skills gaps in regard to leadership.
- Talent shortages and technological changes will have the greatest impact on HR in the near future, affecting how HR views the importance of recruitment and talent development.
- HR technologies are rapidly evolving and will contribute to key talent management areas.
- There’s a near consensus that the HR function will be transformed, but there’s no agreement on how that will happen.
- HR will increasingly be expected to demonstrate its ability to influence culture, leadership and business outcomes over the next three to five years.
Few HR professionals think their departments are well prepared for the future
A little over a third of respondents (36%) view their HR functions as well prepared to thrive over the next three to five years. This indicates that a majority of HR functions will need to take further action in order to ready themselves for the near future. Thus attention will be needed for developing better planning, skills development, HR recruitment and more.
HR has won a seat at the leadership table…for now
One of the reasons HR should report directly to the CEO is to gain a seat at the leadership table so that strategic HR input can be provided to the executive decision-making process. In about three-quarters of organizations, HR has been either very successful (31%) or fairly successful (40%) at gaining a seat at the leadership table.
Having a seat at the table is correlated with having a higher performing HR function. But which comes first: access to the leadership table or a high-performing HR function? There’s no simple answer to this question. Rather, it’s a virtuous cycle; the better HR is at its job, the more likely it is to be invited to the leadership table. And, the more it has access to that table, the better it is able to perform its job.
Having a seat at the table is correlated with having a higher performing HR function. But which comes first: access to the leadership table or a high-performing HR function? There’s no simple answer to this question. Rather, it’s a virtuous cycle; the better HR is at its job, the more likely it is to be invited to the leadership table. And, the more it has access to that table, the better it is able to perform its job.
HR has problems measuring its own impact
For all the talk of HR metrics and analytics, the HR profession still has serious problems in this area. Only 7% of respondents said their HR functions are very successfully measuring the impact of HR in their organizations, with another 34% saying they are fairly successful in this area.
Of course, this is part of a larger debate within the field. Is measurement important in HR? In the past, many believed it was not. This research, however, indicates that HR professionals now view metrics and analytics as essential to their job, as we will discuss later in the report.
Of course, this is part of a larger debate within the field. Is measurement important in HR? In the past, many believed it was not. This research, however, indicates that HR professionals now view metrics and analytics as essential to their job, as we will discuss later in the report.
HR continues to play catch-up in many skills areas
HR departments tend to suffer from some massive skills gaps, if we compare the importance of certain skill sets to HR’s future success and the current proficiency HR professionals have in those areas. For example, 97% of respondents said that “communicating effectively” is either essential or important to the future of HR’s success in their organizations. However, only 58% said that their HR practitioners were either excellent or above average as communicators. That leaves a 39 percentage point gap. Using this type of analysis, skills gaps are apparent in virtually all HR skills areas, but the gaps were much larger in some areas than others.
Analytics present the largest skills gap
Out of all the areas covered in the preceding graph, use of analytics is where HR suffers the largest skills gap. Whereas 79% of respondents said “leveraging HR data/analytics” was essential and important, only 27% describe their own department’s proficiency in this area to be excellent or above average.
Cloud-based HR technologies continue to grow
For years, cloud-based technologies have been touted as the future of HR technology, especially in regard to Human Capital Management Systems (HCMS).
On-premise technologies have not disappeared. Indeed, 21% of HR professionals say their organizations use only on-premise technologies, which is the same proportion of those who use only cloud-based HR technologies. In our 2018 survey, however, 34% used only on-premise technologies and 17% used only cloud-based technologies. Although we can’t place too much emphasis on a single data point, this does suggest there might be a movement away from on-premise technologies.
On-premise technologies have not disappeared. Indeed, 21% of HR professionals say their organizations use only on-premise technologies, which is the same proportion of those who use only cloud-based HR technologies. In our 2018 survey, however, 34% used only on-premise technologies and 17% used only cloud-based technologies. Although we can’t place too much emphasis on a single data point, this does suggest there might be a movement away from on-premise technologies.
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