Industry Research Summary: The Future of the HR Function 2020

HR must evolve quickly to meet new challenges in uncertain times

Human Resources is undoubtedly at the front lines of employers’ response to the COVID-19 crisis. As HR has learned many times before, the world can change in an instant, and HR must be agile and expert enough to rise to such challenges. Virtually overnight, HR has moved from a focus on recruiting and retaining scarce talent in a tight labor market to coping with massive layoffs, furloughs, budget constraints, remote work, and historic levels of employee anxiety. Seldom has HR’s job been more challenging or more critical. The real question is whether HR is up to the task. Will HR departments take advantage of change to establish a new level of strategic importance or will they flounder? That depends on how ready they are to evolve the function. To help HR professionals better understand what it will take to deal with challenges in the next several years, HR.com’s HR Research Institute conducted an extensive study of HR professionals and wrote a full report, The Future of the HR Function 2020.

Before looking ahead at the future of HR, it is important to look at the current state of HR. It is interesting to note that:
 

A good place to start preparing for the future is to identify the broad issues HR is most likely to confront. Looking ahead three to five years, HR is most likely to be concerned about economic conditions and talent shortages. The three factors most commonly cited as likely to have a significant impact on HR are:
 

Each of these three were cited as having a significant impact by more than half of the respondents. These core issues are cited far more often than much talked about issues such as generational differences, digitization, diversity, and the gig economy. While HR may enjoy learning about those other issues, they seem to have a clear head in understanding the big issues that will actually affect their work.
 

 

It’s easy to create a long list of skills HR will need in the future. The trick is to be sufficiently analytical that one can accurately focus on the skill gaps that need the most attention.

HR professionals were asked how important various HR skills will be in the near future and how proficient HR is at the moment. There are gaps between the percentage who claim a skill is “important” or “essential” and the percentage who gauge their department’s proficiency as “proficient” or “highly proficient.” Looked at from the perspective of percentage points, the biggest gaps are in leveraging HR analytics and improving the employee experience. The next three highest gaps are the areas of demonstrating leadership, executing new initiatives, and communicating effectively.

In looking at the near future, HR has to assess priorities and then implement a plan to address those priorities. At the moment, the critical issue is the COVID-19 crisis, and it is useful to look at “preparedness” through the lens of how ready HR is to react to the far-reaching impacts of the pandemic.
 

In looking at which HR functional areas are expected to be most critical in the next two years, change management is most widely cited. The COVID-19 pandemic, of course, has only served to emphasize and underline the criticality of this HR functional area. A host of urgent changes have swiftly swept across the organization, including how to help employees work remotely, how to handle furloughs, how to decide which staff is essential, how to protect the health of essential workers who are on-site, how to protect the mental health of employees forced to stay home and so on.

The number one issue to focus on in the next two years is creating workforces that are agile and can respond quickly to change. Agility has been especially important as organizations strive to maintain productivity while maintaining safe operations for employees and customers. Some must also determine how to best set policies on sick leave, telecommuting, flexible work hours, and more.

Only one HR capability was cited as “most crucial” by more than half of the respondents: increase employee engagement levels. Within the context of the COVID-19 crisis, there are two particular issues especially relevant to engagement. One is how to keep employees engaged when they are working remotely. The other issue is how the organization’s response to the COVID-19 crisis is perceived by the employees once the crisis has passed. Will some feel let down by how the organization handled it? Will they feel it reaffirms their belief they work for a company that cares? HR will need to help leaders assess the longer-term cost of short-term decisions around layoffs, furloughs, and support for employees facing challenges.

HR technology will play both a deeper and broader role in the future. HR needs to develop a roadmap guiding how they will keep up with the ever-increasing capabilities of HR tech.

More than half of HR professionals cite analytics and learning as the top areas that will be impacted by technology. Performance management came third (45%). It’s worth noting that while those areas are the top three choices, other areas including onboarding, talent acquisition, and HR productivity improvement were selected by many respondents.

Remote work technologies solutions (56%) are cited by more than half of respondents as having the largest impact on HR in the next two years, more than any other technology. Onboarding solutions (53%), learning experience platforms (52%), and analytics and data visualizations systems (49%) are close behind. This finding reflects the breadth of the impact technology is having on HR.

To learn more about The Future of the HR Function 2020 survey and to get strategic outcomes and 7 key takeaways from this exclusive HR.com Research Institute research, please read the complete report here: