The new year is underway and human resources leaders need to focus on five key trends to continue driving business outcomes in 2020.
The priorities include unlocking HR data to create competitive advantages; guiding adoption of new business technology; driving organizational growth; going above and beyond current regulation requirements; and embracing an agile mindset.
Key 1: Unlock HR Data to Create Competitive Advantages
If organizations unlock the data held across different databases and silos within their IT systems, the information will be invaluable in creating competitive advantages in 2020. By gathering information from payroll, pension systems, benefit supplier systems and share administration systems, and then collating everything to do with pay into one dedicated database that matches to employee data, organizations now have access to 100% of their total labor costs.
This means that planning, restructuring, delayering and preparing for the future of work — decisions that control billions and have an impact on ROI — can be based on data. Organizations are becoming more data-driven, and there’s a need to analyze and process data — especially within HR.
Additionally, within this data an organization can get a breakdown of grades, skills, incentives and rewards that they need to recruit, motivate and retain key employees and keep up with their labor supply chain.
Key 2: Guide Adoption of New Business Technology
Technologies such as automation and artificial intelligence (AI) are reshaping the way things are done. A shift in working patterns and attitudes, along with a big move toward remote working and the gig economy, means the way businesses operate is facing a huge transformation.
Senator Mark Warner (D-Va.) recently pointed out how the government “provides a tax deduction to companies that replace a human with a robot but offers nothing to the company that trains that worker to remain employable.”
Organizations can’t protect jobs that are made redundant by technology, but they can protect their people by nurturing agility and reskilling workers to keep them employable. Organizations will transition from rigid, structured and tightly-defined job descriptions into looser, more skill-based flexible roles enabling the organization to assemble talent pools assigned to projects internally.
Key 3: Drive Organizational Growth
There is an increasing recognized need for C-suite executives to partner with HR leaders to drive growth; this is going to be a major catalyst for change in 2020.
Now armed with a data breakdown and information about individual employees — how much each person costs, groups of people, etc. — this is where HR leaders can gain buy-in from C-level and senior-level leaders.
For example, employee compensation and reward spend in the average multinational is about 15% of overall costs. If a CFO or finance analyst asks about the return (increased productivity, loyalty, retention, etc.) from each different type of reward, HR leaders will now have the data to see the full detail of every type of reward for every employee on a real-time basis. Additionally, financial analytics on profiles of people, workforce planning, models on restructuring the workforce and so on, can all be completed using the data.
HR professionals need to have access to a full suite of data which details their entire labor costs to help the organization make better insight-driven decisions.
Key 4: Go Above and Beyond Current Regulation Requirements
Currently, innovation outpaces regulation, but organizations must digitize all HR functionality and management because it makes sound business sense. Better data allows an organization to fulfill its primary objective, which is to get the right people in the right jobs at the right pay. This is in keeping with the thrust of legislation. If you have a fully-digitized reward environment, you will be able to comply with whatever direction the legislation heads down.
Given that pay equity is top-of-mind for many employers and is coming under increasing legal and political scrutiny, organizations that embrace transparency in reporting will not only be able to understand their gender pay gap, but will also be prepared for whatever legislation comes next.
Key 5: Embrace an Agile Mindset
There will be an increasing shift toward HR teams applying agile methodologies in 2020. As a result, we'll start to see lots of small, multifunctional HR teams working together on various programs.
Instead of enterprise-wide HR processes, initiatives that are localized and relevant to peoples’ daily work lives will be tested and rolled out.
Rewards are a good example of this: By enabling rewards to be managed “for anyone from anywhere,” it’s no longer necessary to locate rewards expertise within the geography that’s being managed. This all opens the opportunity for HR and total rewards professionals to be more efficient with fewer people in broader roles.
The next 12 months will see these changes becoming even more pronounced. Agile HR leaders who are best able to adapt to these seismic shifts in the way business is done will make the greatest impact.
About the Author
Ken Charman is CEO of uFlexReward, a consolidated HR and rewards data platform providing organizations with a granular view of their total labor costs and a technology framework for managing the workforce of the future.