What is Your Business’s HR Future?

It seems like just yesterday we were popping the cork on the bubbly, while welcoming in 2015. In the spirit of the New Year tradition of making resolutions, I thought I would identify the top ten predictions from thought-leaders about what businesses’ HR future for 2016 will hold for them.

2016 Predictions on HR trends for Small Business

1. Engagement, retention, culture and inclusion are all front and center HR issues: Employee engagement is now the number two issue on the minds of HR leaders, preceded only by leadership development.

2.  In-house HR will downsize and outsourcing will increase: This prediction may seem somewhat obvious based upon current HR outsourcing activities, but experts have different thoughts as to the businesses’ rationale. Industry analyst Brian Sommer, the founder of TechVentive, claims a shift to smaller HR departments will result from new technologies and increased employee participation in HR processes.

In addition, many transaction-heavy HR jobs will be outsourced entirely to HR agencies or specialists. Steve Coco of Buck Consultants, believes benefits administration will be handled by technical experts because of increasingly numerous and complex regulations.

3. Redesign of performance management to continue: Companies will look to simplify their performance process from “difficult” and “stressful for all,” to more “regular manager and employee interactions,” that will be more focused on “personal development” instead of calculating a normally distributed rank-order employee-scoring outcome.

4. Even though millions are unemployed, organizations are hard-pressed to find the skills they need: This will intensify over the next decade. Organizations will step up hiring as the global economy improves, while talent supplies are expected to shrink as baby-boomers retire and population growth slows in developed markets. At the same time, demand for highly skilled labor is expected to increase.

Compounding the problem, organizations will need a more diverse range of skills to succeed in a fast-changing business environment. Educational institutions, key suppliers of skills, are struggling to keep up with the rapid pace of change. Accenture presentation (2015)

5. Technology strategy will include compensation, succession planning, and training:  your new workforce analytics software will bring together the reporting and analytics across HR functions to evaluate the workforce with a holistic data perspective. This will give managers and employees the power to influence the future of their role in the company. It can reduce turnover, enhance engagement and entry-level positions can honestly be seen as a real gateway for employees to map their careers.

6. Improve efficiency through behavioral changes enabled by a true understanding of employees: Sociometric Solutions, a startup out of MIT, has deployed wearable sensors to understand how employees interact in the workplace to make organizations and people more effective and happy. They were able to improve call center operations at Bank of America by 20 percent just by adjusting employees’ break and lunch schedules, says Ben Waber, PhD, Sociometric’s CEO.

The data shows that quality face-to-face interactions result in employees that are more productive. With this understanding, Waber says they aligned breaks and lunches for people on the same team. “Those increased cohesive interactions yielded large performance gains through enhanced information sharing and decreased stress levels,” says Waber.

7. Strategic thinking will become HR’s new core competence:  The leaner version of HR that remains will need to reposition itself as a strategic partner within the business. In fact, the trend toward smaller, more strategy-focused HR departments was predicted years ago by SHRM.  More recently, an Economist Intelligence Unit report stressed the need for business leaders to collaborate with HR to drive growth. To be clear: HR needs to increase its strategic value to the business–or else.

8. Managing a remote workforce will be the new norm:  HR will increasingly have to tackle the challenge of managing a remote workforce. Companies will need to leverage employees where and when they are most productive and impactful.  The trend toward remote workers is a growing challenge to managers who are not effective in managing people at a distance.”

9. HR will need to become more like Marketing:  Recruiters will need to identify specific micro-segments of job seekers or job holders they want to target as candidates, just as a marketing firm would.  The experts at Buck Consultants cast an even wider net. They claim the need for HR to think like marketers will expand beyond recruiting. “HR will evolve the ‘internal marketing’ role to include social marketing coordination and brand ownership, that is, outside talent ‘buying’ into the brand–the company–to potentially work in the organization,” they say. Erin Osterhaus, Software Advice (2015)

10. Add resources and a sense of urgency to the development of leadership: HR must pull the organization to position this strategy and implementation as a key ingredient in the recipe for a successful and self-sustaining member of the business community.

William Kreider is the founder and CEO of HR Future Group, a firm that offers a full service suite of human capital management services for all sizes & types of businesses. From Transformational HR, Talent Management, Outsourcing, Compensation, Executive and Organizational Coaching, Talent Acquisition and other HCM consulting services to Cloud-based Payroll, HRIS, Time & Attendance, and Benefit Administration, HR Future can assist your business.  Mr. Kreider has significant executive experience in all areas within the HR profession in a variety of industries.  For more information, please email him at bill@hrfuturegroup.com or call 610.584.2467.