HR 2020 executive summary
Suzanne van Montfoort, Research Manager, Winmark
Opportunity for HR to proactively scan the horizon and navigate the future
Both non-executive directors and HR directors indicate that HR functions are somewhat but not well prepared to meet organisations’ future needs and requirements – there is scope for HR to embrace a more proactive and strategic stance. By scanning the horizon for important developments, and by formulating courses of action in partnership with the rest of the business, HR has the chance to reinterpret its role to be more effective and more valued than before.
HR leaders concerned about economic and political risks on a global and regional level
Major risks that HR leaders have identified include economic downturn (59%), political instability in Europe (33%), and British exit from the EU (35%). In addition, the share of HR leaders that perceive
Eurozone breakup as high risk has risen from 29% in 2015 to 44% in 2017, driven by HR leaders in continental Europe (68%), where domestic politics, the refugee crisis, and the example of Brexit are
undermining the stability of the EU model.
War for talent and skill shortages dominate HR agenda
HR leaders believe several social trends will have a high or very high impact on the workplace. War for talent (67%), skills shortages (57%), and remote working and anywhere/anytime delivery (46%) are particularly high on the agenda.
Technological innovation can help drive efficiencies and fill some, though not all, skills gaps
HR leaders particularly expect mobile technology (82%), online applications (67%), and automation (63%) to affect the way people will work in their organisations. A growing number of HR leaders
also expect virtualisation (30%) and robotics (28%) to impact their workplace. Yet technology creates a divide between work which can be fruitfully automated and that which will continue to require a human touch. It is up to HR to distinguish between the two and structure work in an effective and efficient way.
Human-focused HR initiatives remain key to tap into talent
As organisations need to tap into all available talent pools, non-executive directors see improving diversity as a top HR priority. Yet in 2017 only 39% of HR leaders share this view, though more agree on the importance of talent management (86%), staff training and development (54%), and recruitment of skilled workers (52%), which also can contribute to solving the wider talent and skills puzzle.
Investment in apprenticeships to attract and develop skilled workers
In the UK, the apprenticeship levy which came into effect in April 2017 provides an incentive for businesses to develop or extend their apprenticeship programmes. In 2017, 41% of HR leaders saw offering apprenticeships as a key HR priority, up from 29% in 2015.
Competing approaches to globalisation increase complexity of global mobility
Whilst in 2017 the majority of HR leaders in continental Europe and Asia-Pacific predict that global mobility will have a large impact on their organisations, only 24% of UK HR leaders share this view. Much will depend on whether the trend towards globalisation will continue unfettered, or whether counter-movements pushing for more closed borders will continue to gain momentum. HR has to understand the local and organisational context, and balance preparations for the predicted rise in internationally mobile employees with preparations for additional complexity and potential restrictions relating to visas and international recruitment.
Trend towards growing labour market flexibility appears to be slowing down
In 2015 29% of HR leaders believed that rising labour market flexibility would have a large impact on their business, but in 2017 this was down to 17%. It may be that organisations have simply become used to the flexible employment landscape, or perhaps negative PR around zero hours contracts and legal/regulatory changes about the status of employees and workers are slowing down the pace of change.
HR leaders prioritise pensions education but increasingly worry about employees’ (in ability to retire)
In 2017 59% of HR leaders identified employees not being able to retire as an important pensions-related risk, up from 39% in 2015. This is a concern because retirement planning feeds into areas such as talent management and succession planning, which both non-executive directors and HR directors consider key HR priorities. In response, HR leaders prioritise providing staff with pensions and financial education (64%) to enable good decision-making and contribute to solid retirement planning.
HR functions are taking steps to operate more effectively, but Boards would like more strategy and less process
HR leaders are adopting new technologies (72%), automating HR processes (66%), collaborating with other parts of the business (59%), working to improve alignment with the senior executive and the Board (52%), and shifting towards strategic business partnering (50%) to better equip themselves and their teams to operate in the changing environment. Nonetheless, a frequent complaint by non-executive directors is that HR can be too process-driven and not strategic enough.
HR leaders should speak the language of the Board and support advice and decisions with data
HR can improve Board perceptions of the function by mastering the language of finance and risk which is commonly used by other senior executives, as well as demonstrating how the ‘softer’, human elements of HR add value to the business. Providing data-driven management information to support advice and decision-making can help HR improve communication and alignment with the wider executive, with the ultimate goals of improving mutual understanding and collaboration to the benefit of the long term success of the organisation.
Both non-executive directors and HR directors indicate that HR functions are somewhat but not well prepared to meet organisations’ future needs and requirements – there is scope for HR to embrace a more proactive and strategic stance. By scanning the horizon for important developments, and by formulating courses of action in partnership with the rest of the business, HR has the chance to reinterpret its role to be more effective and more valued than before.
HR leaders concerned about economic and political risks on a global and regional level
Major risks that HR leaders have identified include economic downturn (59%), political instability in Europe (33%), and British exit from the EU (35%). In addition, the share of HR leaders that perceive
Eurozone breakup as high risk has risen from 29% in 2015 to 44% in 2017, driven by HR leaders in continental Europe (68%), where domestic politics, the refugee crisis, and the example of Brexit are
undermining the stability of the EU model.
War for talent and skill shortages dominate HR agenda
HR leaders believe several social trends will have a high or very high impact on the workplace. War for talent (67%), skills shortages (57%), and remote working and anywhere/anytime delivery (46%) are particularly high on the agenda.
Technological innovation can help drive efficiencies and fill some, though not all, skills gaps
HR leaders particularly expect mobile technology (82%), online applications (67%), and automation (63%) to affect the way people will work in their organisations. A growing number of HR leaders
also expect virtualisation (30%) and robotics (28%) to impact their workplace. Yet technology creates a divide between work which can be fruitfully automated and that which will continue to require a human touch. It is up to HR to distinguish between the two and structure work in an effective and efficient way.
Human-focused HR initiatives remain key to tap into talent
As organisations need to tap into all available talent pools, non-executive directors see improving diversity as a top HR priority. Yet in 2017 only 39% of HR leaders share this view, though more agree on the importance of talent management (86%), staff training and development (54%), and recruitment of skilled workers (52%), which also can contribute to solving the wider talent and skills puzzle.
Investment in apprenticeships to attract and develop skilled workers
In the UK, the apprenticeship levy which came into effect in April 2017 provides an incentive for businesses to develop or extend their apprenticeship programmes. In 2017, 41% of HR leaders saw offering apprenticeships as a key HR priority, up from 29% in 2015.
Competing approaches to globalisation increase complexity of global mobility
Whilst in 2017 the majority of HR leaders in continental Europe and Asia-Pacific predict that global mobility will have a large impact on their organisations, only 24% of UK HR leaders share this view. Much will depend on whether the trend towards globalisation will continue unfettered, or whether counter-movements pushing for more closed borders will continue to gain momentum. HR has to understand the local and organisational context, and balance preparations for the predicted rise in internationally mobile employees with preparations for additional complexity and potential restrictions relating to visas and international recruitment.
Trend towards growing labour market flexibility appears to be slowing down
In 2015 29% of HR leaders believed that rising labour market flexibility would have a large impact on their business, but in 2017 this was down to 17%. It may be that organisations have simply become used to the flexible employment landscape, or perhaps negative PR around zero hours contracts and legal/regulatory changes about the status of employees and workers are slowing down the pace of change.
HR leaders prioritise pensions education but increasingly worry about employees’ (in ability to retire)
In 2017 59% of HR leaders identified employees not being able to retire as an important pensions-related risk, up from 39% in 2015. This is a concern because retirement planning feeds into areas such as talent management and succession planning, which both non-executive directors and HR directors consider key HR priorities. In response, HR leaders prioritise providing staff with pensions and financial education (64%) to enable good decision-making and contribute to solid retirement planning.
HR functions are taking steps to operate more effectively, but Boards would like more strategy and less process
HR leaders are adopting new technologies (72%), automating HR processes (66%), collaborating with other parts of the business (59%), working to improve alignment with the senior executive and the Board (52%), and shifting towards strategic business partnering (50%) to better equip themselves and their teams to operate in the changing environment. Nonetheless, a frequent complaint by non-executive directors is that HR can be too process-driven and not strategic enough.
HR leaders should speak the language of the Board and support advice and decisions with data
HR can improve Board perceptions of the function by mastering the language of finance and risk which is commonly used by other senior executives, as well as demonstrating how the ‘softer’, human elements of HR add value to the business. Providing data-driven management information to support advice and decision-making can help HR improve communication and alignment with the wider executive, with the ultimate goals of improving mutual understanding and collaboration to the benefit of the long term success of the organisation.
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