In today’s economic climate, where Brexit and 2016’s seismic political shift have created instability during a period of unparalleled business disruption, it’s of little surprise that businesses entered 2017 with a degree of trepidation.
Yet, it’s certainly not all doom and gloom, according to The Chartered Institute of Personnel and Development (CIPD) and Workday’s “HR Outlook for 2017” report. While HR leaders do see economic change (including globalisation) and the UK’s impending departure from the EU as two areas that will most negatively impact business objectives, there is a more positive undertone.
In fact, the report found that a majority (59 percent) of senior UK HR professionals believe they are in a position to have a positive influence and safeguard their organisations against challenges created by these changes.
The good news in this year’s CIPD report, which surveyed HR leaders on their priorities today and into the future, was that for many there is an overriding sense of “business as usual” when it comes to the HR priority list. Respondents reported that cost management was both the number one current and future priority, although it was clear that talent management (second) and organisational agility and productivity (third) will also remain HR priorities as we move into the future.
Data and Analytics: HR’s Window into the Future
In the absence of a crystal ball, business leaders will increasingly turn to their managers, including the HR function, for better insights and predictions. This was evident in the CIPD report, where the use of data and analytics to strengthen evidence-based decision-making is becoming particularly significant. Respondents reported that HR analytics are being used to tackle a number of crucial areas, including managing workforce costs (60 percent), handling workforce composition and diversity (51 percent), performance management (48 percent), attraction, recruitment, and selection (47 percent), and learning and development (44 percent).
The report found that technology capability and business culture were two of the main barriers to the adoption of HR analytics. Meanwhile of those organisations that have adopted HR analytics, many have yet to fully engage other business stakeholders, with more than one-third of finance managers and one-half of risk and compliance professionals saying they have no access to HR dashboards and reports.
The CIPD calls out six specific areas where HR must focus to support the changing needs of the business.
HR still has a great deal of work to do if it is to reap the full benefits of HR analytics, and the survey found that many respondents do not believe their existing HR technology is capable of flexing with the changing needs of their business. Just 38 percent said they were somewhat or very confident in the agility of their HR systems. Similarly, just 41 percent said they were somewhat or very satisfied that their existing HR technology was enabling them to do their role effectively.
These numbers suggest that HR transformation remains a work in progress for many UK organisations, and businesses must embrace technologies such as analytics and big data if they are to succeed.
Developing and Empowering Tomorrow’s Leaders
The report uncovered the key areas for businesses when it comes to their priorities for developing, upskilling, and reskilling all employees’ leadership behaviours and skills over the next three years. Performance management (46 percent), people management (45 percent), developing staff (44 percent), engagement/motivation (40 percent), and change management topped the priority list. “Managing difficult conversations” and “budgeting and financial management” also emerged as significant priorities, reflecting the challenges of managing within considerable cost restraints.
Interestingly, over the last 12 months, half of organisations have required line managers to take on responsibilities previously undertaken by HR professionals (for example performance management, absence management, and recruitment). One in six HR professionals report that line managers get neither formal training nor tailored support when they take on new HR responsibilities. These findings are encouraging, demonstrating the move towards self service, which can facilitate HR transformation from the function’s traditional focus on transactional tasks. However, in the same breath it is important for HR leaders to remember that not all managers are HR experts, and businesses should be committed to ongoing development of these staff.
What Does This Mean for HR?
For many, the next few years will be characterised by an uncertain political landscape in Europe and continued digital disruption. Increasing agility and flexibility to respond to the changing environment remain high on organisations’ priorities. This means while keeping cost management under control remains a priority, getting to grips with talent management may also become increasingly important as labour laws and freedom of movement potentially impacts available talent. Placing talent at the core of HR and technology programmes, rather than something conducted in isolation, has been gaining prominence as an approach and should continue in 2017.
The CIPD calls out six specific areas where HR must focus if it is to remain effective and support the changing needs of the business:
- Demonstrate the value of the HR agenda
- Use HR data to strengthen evidence-based decision making
- Harness the benefits of technology
- Prepare for economic uncertainty (such as globalisation and Brexit)
- Adapt to the changing needs and desires of the workforce
- Strengthen the capability of people managers
At Workday, we’re encouraged by the findings of this research and the conversations we have with HR leaders, which demonstrate the pivotal role the function has in steering the wider business through these turbulent economic times. I encourage you to read the full report to find out more about the pivotal role of new technologies, such as analytics and big data, in guiding HR and the broader business through this challenging period.