Saturday, November 30, 2013

Top HR Trends expected in 2014 & beyond…

Peter Drucker once stated, “The Future arrived when we weren't looking, so we’re still dealing with issues, ideas and programs that don’t fit the world’s new realities.”
We are still in the era of economic crisis. Growth expected is normal and not like what was there earlier. The challenge for business leaders is to create growth opportunities that far outstrip the potential of the global economy. All Business Leaders and functional managers  will have to think and act very differently -- the differences between “fast growth” which we witnessed in past  and “new era of business” conditions are not inconsequential.
HR trends are not also isolated from such changes. We need to think differently. We should change the way we are working today. The issue today is not the talent, you advertise the vacancy, you will get hundreds of CV in your inbox. The issues is for RIGHT talent, Right talent which grows the business. And this is also applicable to all HR practices.
Some trends I see in following years are as under.
HR Business Partnership:
Please read my earlier post on this on this link  HR professionals are expected to play the role of business partner. Every HR person should ask the question how his role or the function aligned to the number decided by the top management. How they can relate the consequences, impact of the actions of HR function on the overall business. Question is not related to the cost control, but how HR play the role to optimize the productivity, engagement and people cost, how people are aligned towards the organizational goals. HR professional are consultants for the business leaders and functional leaders on their people issues. HR is expected to play the role of Coach to managers on people issues.
Leaders Readiness and maturity for the new economic era:
How we are going to measure the readiness of leaders to new change, adapt and create new growth. This is not an easy task. It is easy to understand that outsized performance in an easy growth era will not automatically transfer the new economic era. Business leaders role here with the support of HR is raising awareness and providing clarity around changing expectations and supporting to create the right matrix for the growth.
At the other side, how our leaders are enough matured to come out from their conventional thinking and think the business in different perspective is also important. leadership maturity is an individual’s ability to operate effectively at the appropriate level of complexity, ambiguity and scale. HR is expected to act as a Coach, if required arrange development plan for leaders if required to cope up with the situation.  Leaders are those who come out from the comfort zone, challenge the status quo and operate in disruptive, turbulent and volatile market or situation with speed.
Off course HR is expected to identify issues, development needs and act proactively to take the leadership at next level.
 (RE)emergence of Industrial Relations Role:
You must have notice the turbulence in Industrial Relations during last few months. (Strike in Bajaj Auto Ltd, Murder of Maruti Manesar plant HR head etc.)  Maintaining good Industrial Relations is crucial now a days. Employee expectations are increasing day by day. They don’t have the moderate expectations. Due to speed, insecurity and fear, workmen are again coming together to go aggressive on their demands. Impact on the business is critical.
In such situation, IR role again has been (re) emerged as the important role. HR professional will have to update themselves on the trends in IR, keep an eye on the behaviour of workmen and roll out the IR risk assessment and mitigation plans.
No more (more) fresher:

We have also seen the mass recruitment in past. Recruitment from college campuses was common, the placements will still be there, but not for all. There are so many (engineering and management) colleges are shutting their shops due to less response from the industries for the placement. The main issue is employability skills of these students. Industries will be very choosy to recruit the candidates from colleges.     

Offloading HR transactional jobs:

If you are good in payroll, attendance, other HR operational jobs, better you upgrade your skills as a HR expert or HR generalist or HR business Partner. Most of the companies are eliminating HR transactional jobs and such jobs are outsourced to optimize the cost. Still you will be employed, but your growth will remain restricted.

More focus on building organizational capabilities (training & development):

“ Organizational Capability is a business’s ability to establish internal structures and processes that influence its members to create organization-specific competencies and thus enable the business to adapt to changing customer and strategic needs”. (D. Ulrich & D. Lake (1990). Organizational Capability).
What D. Ulrich & D Lake told in 1990 is still relevant. Perhaps the focus was still missing and people miss the opportunities. Now this has to be continued. Identifying and building right capabilities is the first priority to HR.  
There are certain issues with talent, one of the issues is RIGHT talent, another is their skills and competencies suitable with your company. You will not get the apple to backfill the apple. You have to hire good oranges. To convert them into apple, companies have to continue the focus on training and development of their staff.  

More focus on OD and Culture Change initiatives:

The business scenario is changing. Organizations have to tune their cultural bandwidth with the changing scenario. Management is expecting (from HR)  steering more organizational development initiatives. It is not the expert role now, you can still hire the consultants, but first stage, HR is expected to diagnose and act on the plan and devise the HR strategy. HR will have to play the role of deployment leaders of new initiates and measure the success of such initiatives.   

Recruitment through job referrals, networking & online platforms:

Recruitment (placement) agencies are now outdated. Everybody have the job portals with them. More jobs will be filled through internal job postings, referrals and through professional & social sites. Companies are tracking the candidates through LinkedIn, Facebook, Plaxo, Twitter etc. now a days virtual presence is must.    

Focus on HR technology and tools and reduce HR FTEs:

Instead of  relying on person, companies are automating their HR processes. Everything is online, If you don't swap your card, you get the sms intimating the same, your training history is online, your appraisals are online. Managers are not expected to go to HR for small issues. Managers will have their control on their team through Managers Self Service and Employee Self Service. HR is only here to advise and consult. No paper work and bureaucracy, however more face to face discussion is expected.  

Focus on Ethics, Code of Business Conduct and corporate governance.:

Companies are looking for sustainability and trust for shareholders. To build this, companies are advocating work ethics, code of business conduct and corporate governance.  HR is expected to train their employees on value system, ethics and create the positive work culture to foster the same. There is lot of awareness among the people about the same and they expect that they are well treated, respected, valued and follow the work ethics.

No hefty Compensation, but benefits can be more:

Today, there is no differentiation between  Software Engineer working in IT industry and Production Engineer working in Manufacturing industry.  Compensation percentile and compa ratios may be different in different segments, but there is not big gaps. Only compensation is also not the differentiation factor. There are no heavy increments unlike in past. You may hardly receive 8-10% increase in coming years. However right employees will be rewarded. They will get more salaries.    

HR Demographics and HR analytics

Do you know what is the employee cost against the revenue & sales? What is the contribution margin of the product? How HR cost has the impact on the product? DO we know the demography of our employee. How HR cost are trending and making the business impact? HR is expected to work on HR analytics and demography not only understand what that is, but to understand the business impact, analysis and make HR plans.  HR demographics help you to devise your customized HR strategy. 

This is the continual change and we should sense that…. 

“Change is the law of life, and those who look only to the past or present are certain to miss the future.” John F. Kennedy. Let’s not miss the future.


Anonymous said...

Mr Vinod, good article focusing on preventive than curative, i.e. to be prepared for 2014...:)

While I appreciate all the points you mentioned, I would like to talk about area of training, OD and organisational culture, ethics, code of business conduct and corporate governance.

I am of the opinion, that our academic system has hugely failed to educate us on emotions management and therefore almost 50% of mind energy of human capital is drained in unproductive thinking and doing in the organisation. This is now established, worldwide, across sectors and cultures; that the training of Emotional Intelligence does impact productivity and profitability in a positive manner.

Emotionally literate human capital in the organisation would know where to focus and what is the ROI of time invested in that activity. So, if culture of the company to be improved, I feel, training in the area of Expanding Emotional Intelligence would help in a great way. These will also help to improve ethical behaviour, conforming to code of conduct and better governance.

Thank you for opportunity to share. Best wishes.
By Dr. Vipul Vyas, Ph.D.(EQ), MBA

Srividya said...

While all of the above is important, it is vital to inculcate a culture of professionalism and employee engagement which is missing in most corporates. The communication is more often than not, one sided and effective feedback mechanism needs to be encouraged to foster a positive environment.

Anonymous said...

A nicely written article giving pointers to the current & future trends. HR would do well reposition itself to be able to contribute effectively.
Rajeev Moothedath

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