The New Role Of HR

What’s next for HR leaders this year and beyond

Last year, tens of millions of people in developed economies left their jobs throughout a post-pandemic driven phenomenon that has earned itself the tag: the Great Resignation. Over time, it became apparent that people were not just leaving jobs or work altogether, but are also using the temporary safety net of pandemic-led stimulus to find better ways of earning a living.
 

So the Great Resignation gave way to the Great Renegotiation. Higher pay, stable hours, and flexibility ranked highly for these movers and shakers. People took advantage of this unique moment in economic and social history to recalibrate what they wanted from life and expected from employers.

Expect Greater Flexibility and Engagement for Employees

The upshot has been that workforces in mature economies are no longer willing to tolerate substandard employee experiences. Meanwhile, businesses quickly understood that the balance of power had shifted forever—in favor of job candidates—and that the new killer benefit any business can offer recruits is a positive company culture. We can expect greater flexibility, communication, and feedback as major themes in employee management over the coming 12 months.

The task of activating, executing, and managing the components that underpin business continuity has fallen squarely on the shoulders of the HR function. These are clear when you look at the data from a recent joint HR Benchmark study that our insights team at HiBob commissioned with US HR consultancy firm, Workology.

HR Takes a Bigger Role in Culture and Retention

The research shows that HR professionals are increasingly becoming accountable for, on average, 11 areas of responsibility, including culture and engagement, DE&I, onboarding, and employer branding.

In fact, nearly two-thirds (63 percent) of respondents said they now oversaw this last directive. In a sense, HR has become somewhat of a planning committee—creating team outings and events that allow employees to feel a sense of belonging and connection to the company and their coworkers.

Interestingly, the research also shows a staggering 70 percent of top HR leaders are now reporting to the CEO, indicating the function has moved up the ranks of the pecking order to become an essential contributor in high-level company business decisions.

All of these areas intersect with and influence the employee experience. In this sense, HR must find ways to create a positive and supportive culture for teams to ensure employees not only feel welcomed but stay at the company for the long haul. With 52 percent of those polled stating retention and turnover were their top business imperatives this year, it is no surprise that finding, attracting, and keeping high-performing employees has become a priority for HR professionals. HR teams will continue to acknowledge that a better employee experience means a better bottom line.

If they get this wrong, HR teams risk company losses associated with the time it takes to fill vacant positions—an average of 5.4 months, according to another study we did at HiBob with job listing marketplace provider, Fiverr.

Give HR the Right Tech for Business Success

This all sounds difficult and complex because it is difficult and complex. In fact, for modern, mid-sized, and flexible businesses, HR is not only increasingly reliant on progressive HR tech, but it is also demonstrating a real appetite to adapt and use even more advanced tech stacks to fulfill these tall orders.

However, great tools must lend themselves to a great experience because, in today's labor market, it is not enough for any leader to provide what is good; they have to provide tech that is right.

HR professionals understand that managing incoming and outgoing talent is not just a question of a welcome lunch or exit interview and leaving card. Instead, they need analytics capabilities to mine data for use in hiring, developing, and retaining the best employees. In this way, they should consider themselves internal service providers that ensure high returns on people investments.

Our survey with Workology points to the fact that HR now maintains robust tech modules set up to churn out metrics and data, the analysis of which helps them attain company KPIs. For HR, these will now go far beyond basic core HR functions and more toward driving elements, such as engagement, performance, and values. In this way, HR can create and implement intentional cultures directly responsible for accelerating performance.

Increase in HR Budgets

Rises in HR budgets are also validating the growing importance of HR roles. The HiBob-Workology survey notes that around half (45 percent) of HR professionals said their HR budgets will increase by up to 20 percent over the next year, and an additional 6 percent said it would increase by 30 percent or more.

This benchmark goes a long way toward revealing just how crucial a part HR now plays in high-level business planning at modern organizations. Another clear indicator is seeing how often HR is now led by or reports directly to a C-level executive (70 percent report to the CEO and an additional 3 percent to the board). It shows that chief human resource officers (CHROs) and other HR leaders are progressively being held responsible for, and indeed being entrusted with, the overall success of a business. The profile of human resources leaders is rising—along with ambition levels.

While it all started with HR playing a leading role in helping companies adjust to the pandemic’s impact on the workplace—namely figuring out how to build and maintain great remote and hybrid work practices—the charge is now, and will continue to be extended towards creating cultures and overseeing the end-to-end employee experience.

Agility in a Slowing Economy

Not even the anticipated challenges around a possible economic downturn in the second half of 2022 will likely derail HR’s holy trinity of engagement, culture, and retention. These anchors will become even more important to provide a level of “uncertainty management.” This being the case, a system based on old rules—a hierarchy that solves for uniformity, bureaucracy, and control—will no longer be effective.

Taking its place should be a model that is more flexible and responsive to the ebbs and flows of market dynamics, and the HR function will be central in helping activate the right levers.

To shepherd the organization of the future, regardless of the anticipated slower growth economy, CHROs and other leaders should do nothing less than reimagine the basic components of what makes a business successful. Prioritizing initiatives that strengthen their organization’s ability to drive change in leadership, culture, and employee experience, and then mapping that back to its greatest assets—humans will be key. When companies become more human, they are by default more inspiring, collaborative, and set up to create an employee experience that is meaningful and enjoyable.

While employee retention will continue to challenge businesses in the coming year, so will ensuring the right people are retained at a time when financial management may also need to become a consideration, and it will entail leading in new ways valued by your top performers.

Outlook for 2022 and Beyond

McKinsey recently conducted research on how businesses can best organize for the future. Early findings suggest that future-ready companies share three characteristics: they know what they are and what they stand for, they operate with a fixation on speed and simplicity, and they grow by scaling up their ability to learn and innovate.

According to Fortune Business Insights, the HR technology market will be worth 35.68 billion dollars by 2028, with a 5.8 percent CAGR. This will be driven by rising demand for predictive and workforce analytics-enabled tools for growth. Successful organizations will work together with their people to create personalized, authentic, and motivating experiences that tap into purpose.  This, in turn, will strengthen individual, team, and company performance. And, you guessed it—the HR team is central in shaping this whole business module.

Going forward, we may see more automation of certain tasks, particularly as it relates to the employee experience—things like making onboarding smoother and more customized so that new people feel individually welcomed and can quickly bond with your company culture, values, and colleagues. Removing the need for HR to deliver these workflows manually will mean they can focus more on the people themselves. In this sense, the heart of HR will continue to be human at its core.

HR will be centered more on understanding and empathizing with the candidate's and/or hire’s different needs as these directly affect motivation for individuals. From reskilling people to perform in the new digitized workforce to being cognizant of other drivers, such as work-life balance, career opportunities, training and development, DE&I initiatives, flexibility, or simply providing a climate where work feels meaningful will likely dominate the HR agenda.

With the right tools, HR is perfectly positioned to ensure the employee experience continues to be positive. Similarly, while HR’s roles continue to expand, companies are taking note and making sure that they support their HR teams. Modern HR will, it appears, firmly take a seat at the core of organizations’ key decision-making processes going forward, ensuring companies place the focus on today’s workforce expectations.

In short, creating a highly engaged workforce and a thriving workplace continues to be a major focus for all HR managers. And the reason is simple—every business needs what employee engagement creates: happier and more productive employees.

Author Bio

Ronni Zehavi is the CEO and Founder of HiBob.