Trends in HR management

LEAP FORWARD. According to English-language dictionaries this phrase describes the act of moving and reacting quickly, coming into prominence rapidly, or jumping over a barrier. All these meanings or some combination of them will be expected of human resources (HR) organisations this year and in the future. The current economic environment and converging market trends are driving HR organisations to make leaps forward in their performance and capabilities. Decisive action is needed more than ever.

To achieve the highest possible performance and capabilities, employees’ talent is the key element but talent can become a stumbling block if not managed properly. Current technologies such as cloud computing, mobile connections and advanced analytics, combined with the help of HR, will improve employees’ effectiveness. The potential risk to an enterprise from poorly managed people is better understood by company executives today. With the challenges facing businesses today, HR is expected to make a leap forward and help to manage the complexities of these challenges.

Deloitte’s annual Human Capital Trends report for this year identified multiple directions that are reshaping the role of HR in business – and the business of HR: generating growth; shifts towards globally integrated operating models; accelerated development of next-generation leaders; HR partnership in risk management; advanced analytics; the use of social media, the cloud and mobile devices in delivery of HR services; and sales effectiveness.

In this article we concentrate more closely on the most potent business drivers of the near future in the form of growth, leadership and workforce analytics and the role of HR within these areas.

Growth is a top priority

Growth represents a top priority for many organisations and in order to achieve it they must pursue action in three key strategic areas: emerging markets, mergers and acquisitions, and innovation. All these can provide companies with significant growth opportunities but they also represent people-related challenges. This is where HR needs not only to support the company in pursuit of its growth agenda but also to help shape it.

Because emerging markets are no longer only sources of cheap labour but are now able to offer high-value skilled talent, HR needs to plan for, develop and manage a global workforce – matching new sources of talent with global demand and development of a strong pipeline of upcoming leaders.

The role of HR in growth will include identifying and understanding labour and workforce challenges in new markets, establishing systems for fast, efficient and repeatable processes, creating a preferred, effective culture, introducing specialised coaching of potential leadership and to achieve these goals must have the support of the executive suite.

Developing high-potential leaders

Hand in hand with growth comes the need to develop the next generation of leaders to drive it.

During the recent economic crisis many organisations were found lacking in the area of high-quality leadership that was able to tackle the challenges. Identifying and developing leaders is not a new process but organisations are become much clearer now about what “high-potential” really means.

Investment into data-driven activities can better identify the qualities and potential areas for improvement and conclusively accelerate a leader’s development. This requires an integrated approach from HR in aligning leadership strategy with business strategy, determining leadership potential using predictive and raw data, and communication of dual ownership of an employee’s development.

Another dimension is the balance of the “three Es”, which means creating an integrated development ecosystem that balances experience (planning special projects or international assignments for leaders in advance), exposure (strong senior executive sponsorship) and education (creating leader-led learning programs).

The need to look ahead

Workforce reporting and analytics help companies make better, more-informed decisions. An efficient use of analytical tools can bring improvements in hiring, retention, and rewards for employees – reducing labour costs, improving productivity and adding to employee effectiveness.

Traditionally, historical data are used to improve decision-making and performance. Now predictive modelling makes it possible for companies to have a glimpse into the future. Being a field of advanced analytics, predictive modelling analyses past and current employee data and performance ratings, mentoring relationships, compensation levels, networking activity and even daily commute time.

The added value and impact of workforce reporting and analytics can be seen in these areas: workforce planning into the future; measuring recruiting effectiveness; performance; diversity effectiveness; and assessment of talent potential and progression. A real example can be the use of external data (such as market forecasts and a combination of customer relations management and buying behaviour) to anticipate the availability of local talent or workforce allocation.

Creating more value

The trends in HR mentioned in this article will be assessed and looked upon differently in their importance and business impact by every organisations aiming to implement them. Trying to put all of them into place at once could become frustrating but finding those that complement a company’s current position and business priorities can bring the best improvements and lead to what matters most for business leaders – creating more value.

Ján Uriga is the manager of the Human Capital Advisory department at Deloitte Slovakia and Štefan Horváth is a business analyst at Deloitte Slovakia

This column is prepared in cooperation with AmCham, the American Chamber of Commerce in Slovakia. www.amcham.sk

Author: Ján Uriga and Štefan Horváth, Special to the Spectator