Every year since 2010, NGA gathers the opinion of HR experts to reflect on the past year and predict HR trends for the coming year. NGA's HR Trends have been quoted in media around the world.
HR in 2014: which trends to expect?
The world of HR is in constant evolution. Some trends such as the ongoing move towards cloud HR solutions and the continuous increase of HR outsourcing are currently 2 of the most important changes. In addition, HR needs to become a strategic business partner, focus on increasing HR efficiency, and keep on reducing transactional HR efforts and costs. In order to support HR in defining the strategic priorities for the future, NGA listed today's most trending HR Outsourcing topics and compiled the industry's main HR evolutions.
Today's most important HR Outsourcing trends
At NGA we have witnessed 4 major trends for global HR outsourcing in 2013.
First and foremost, cloud has become the platform of choice for HRO. Secondly, we have seen HR outsourcing providers get really smart with process automation, driving efficiency and compliance based on software 'robots', powering HR service centers and HR solution landscapes. Thirdly and specifically on the global playing field, we have seen payroll BPO and RPO stand up as the main drivers (some would say survivors) of HR outsourcing. Lastly, we expect to see HR outsourcing to fit into a wider Global Business Services ecosystem, especially in view of the two trends described above. This trend to Global Business Services builds on demand for further standardization of services, globalization and continued cost efficiencies.
In 2014, we expect all 4 trends of 2013 to further mature, with strong adoption of cloud & SaaS technology, and a strong shift of core HR technologies. Also, we expect big data to start making an impact on HRO. As SaaS adoption matures and further spreads, we expect the 'as a Service' paradigm to widen. According to NGA, ‘Talent Management as a Service’ and ‘Integration as a Service' will be on the rise in 2014. Other top trends in HR Outsourcing are automation, globalization and standardization.
For more details on the HRO trends for 2014, we refer to the Position Paper ‘The Evolution of HR Outsourcing: Trends for 2014’ that is available in our Resource Center.
The industry's HR trends for 2014
The world of Human Resources is complex and consists of many different areas, such as payroll, recruitment and HR technology. As such, it is not always easy for organizations to focus on the right strategic HR priorities, in order to keep up with global market evolutions and to improve HR service delivery.
The start of a new year is the perfect time to learn from the past, to make some good resolutions and to prepare for the future. This does not only apply to individuals, but also to businesses and companies. As such, NGA consolidated the TOP 15 industry’s most popular HR trends for 2014 and grouped them into 3 categories:
- The Strategic Role of HR
- HR Technology in Support of The Business
- The Ever Evolving Global Workforce
How HR Technology Can Unlock Better Benefits
"More than a quarter of respondents (28.5 percent) said that the recession has caused them to stay in their job longer than they might have liked."
"For some of us, attending a child’s first day of school may be more important than taking off a holiday like President’s Day.
"There are no easy solutions to bolstering benefits packages. "
The global recession has left few unscathed, particularly the average employee. Workers of all levels from all over the world have seen their paychecks shrink in the face of pay freezes, inflation, austerity and simply dismal financial performances by their employers. The reality is few employees are optimistic about their salary prospects heading into 2013.
According to NGA's 2012 Pay Optimism Index, almost half (45.1 percent) of global workers fear they have no chance of receiving an above-inflation wage hike. While the American workforce is slightly more optimistic, with only four in 10 predicting stagnant wages, the pessismism is prominent all over. For example, U.K. employees showed the least optimism with 70 percent not anticipating a pay increase. Meanwhile, employees in the Asia Pacific region were more positive with more than a third (36.5 percent) expecting an above inflation boost.
When Money Isn’t an Option
Believe it or not, stagnant salaries are challenges for both workers and employers. Employees understand the constraints placed on their companies, as many have helped their companies battle the recession. Similarly, many employers understand the pains their employees are experiencing and look forward to the days of more gainful payment abilities. The survey revealed that employees understand the universal impact of our current economic quagmire as 67 percent of respondents felt that the whole workforce in their organization had their pay affected in some way by the recession. However, this understanding doesn’t exempt employees from wishing for more robust non-monetary benefits when financial rewards aren’t possible.
While money may be what is most needed and desired, there are other ways companies can recognize their employees outside of cash. Yet, according to the survey, many companies are missing this opportunity to reward, compensate and motivate their employees. Sixty-nine percent of global respondents and 73.3 percent of U.S. respondents said their business has not adapted to economic conditions by increasing non-pay related benefits.
Top Choices in Non-monetary Benefits
Non-monetary benefits that increase their work life balance and improve their professional performance and prospects can be extremely impactful in regards to employee loyalty and motivation. For instance, the Pay Optimism Index found the top choices in non-monetary benefits were:
- The ability to have more flexibility with one’s schedule,
- Additional training and development opportunities,
- Additional holidays and
- The opportunity to work abroad.
In many cases, providing these kinds of benefits to an employee not only improves satisfaction and productivity but also results in a more engaged, better trained and more experienced workforce.
Longer than Expected
Not tapping into the advantages that non-pay benefits can provide an employee presents a grave risk to the productivity and motivation of a company’s talent pool. While a majority (60 percent) of respondents noted that they actively enjoy their jobs, 37 percent have a more pragmatic attitude saying that their motivation for working each day is being able to pay the bills.
Tellingly, more than a quarter of respondents (28.5 percent) said that the recession has caused them to stay in their job longer than they might have liked. These results remind us that depressed wages often lead to a decline in employee motivation and retention – two things companies cannot afford as they wait for the economic strain to ease.
HR Technologies as Tools for Better Benefits
Providing employees with meaningful non-monetary benefits does not have to be a daunting task, and there are numerous ways in which HR technologies can help companies in this effort. The right HR technologies can help align the new non-monetary benefits with the needs of the company and implement them in a way that supports the needs of the business. Most basically, HR technologies can allow companies to survey the compensation and benefits landscape of their workforce.
For example, employers can use compensation management tools or a fully-integrated talent management suite to compare salary and benefits across their enterprise. By doing so, companies can easily see which employees or offices are in most need of additional benefits, or who should be first in line for a salary increase once possible.
Leveraging HR Tools
HR tools can also be leveraged to implement new benefits. Performance and learning HR tools are one way employers can quickly identify the knowledge gaps and needs of their workforce so they can determine what training is needed and how it should be delivered. Learning technologies allow employees and managers to track progress and provide assessments in real time; this empowers managers to play a role in their employee’s learning and help them identify additional, more targeted trainings and opportunities. With learning programs accessible 24/7, these tools empower more customized learning, creating a more impactful and personal experience.
According to the survey, having more flexibility in an employee’s work schedule was one of the highest ranking benefit requests. Cloud-based infrastructure, that include collaboration, CRM, HR and talent management tools, are one way employers can give employees a little bit of mobility while also ensuring instant access to the work and HR materials they need.
Cloud-based services allow employers, employees and clients connectivity from anywhere in the world. The online, secured solution encourages sharing so that employee collaboration is not sacrificed for flexibility. As cloud services continue to grow more sophisticated, they will become even more attractive tools for providing added benefits.
Companies can also use information from time and attendance HR solutions to bolster their benefits offerings. For example, many employees would jump at an opportunity to take an additional holiday or vacation day. By reviewing attendance and payroll data, employers can gain a historical point of view of their workforce globally and can identify when there are periods of low demand and activity in various offices. Understanding this, employers can offer holidays on low demand days without risking business productivity.
Additionally, employers can use these data to allow employees more flexibility when taking established holidays. For example, attending a child’s first day of school may be more important than taking off a holiday like President’s Day. In scenarios like this, employers and employees benefit from greater workplace flexibility because it gives workforce coverage on days in which the office is normally closed.
Understanding What You Have
As workers seek opportunities to work abroad, talent management tools can also be extremely useful. By leveraging performance and competency tools, companies can match the expertise needs for certain projects with the talents and career progression goals of employees. Instead of having to hire to fill a vacancy in another country, employers can search their career history databases for employees with the necessary experience and determine if an abroad work assignment is an ideal and desired professional next step for the employee. This can not only help companies save money on recruitment efforts, but also proves the company’s investment in the employee’s career.
Lastly, outside of providing avenues through which employers can provide more robust benefits, HR technologies are also instrumental in helping employees understand the value of what they already have. Many times, employees underestimate the full value of the medical, disability insurance and other benefits provided by the company. Through benefits administration technologies, employees can see their total compensation package, which shows the value of their work beyond salary.
The Benefits Balancing Game
The recession has placed immense stress on the purse strings of companies and employees alike. Nonetheless, there is a delicate balance that businesses must master between non-monetary and salary-based compensation if they wish to protect their employees’ motivation and retention in the continuing economic slump. There are no easy solutions to bolstering benefits packages.
But by leveraging the right HR tools, employers can better show their investment in and appreciation for employees in a cost-effective, technology-enabled manner that helps prepare the workforce and organization for future success.
2012 HR predictions: Looking through the Crystal Ball
"It is our belief that the most successful businesses in 2012 will be those where HRDs have the relationships needed to work closely with the CEOs and CFOs and take a holistic view about what their most talented employees need in order to succeed."
As the New Year begins amidst commentary from Governments, Financiers and the Media saying that it will be one of the toughest we have faced, the one constant that all businesses and organizations must consider in order to survive and, hopefully thrive, is their people. With this in mind, we give you three lead predictions for the changing face of HR in 2012’s business landscape.
Prediction One: Multi-country payroll will grow significantly
We are under no illusions. There will be widespread corporate belt-tightening this year with the return of tough economic times particularly in the Eurozone. Investors are increasingly looking towards emerging economies such as Brazil, Turkey, and Indonesia with strong business environments, and a skilled pool of human capital.
For the HR industry, the knock on effect is that multi-nationals are looking to grow offices in emerging economies as well as consolidate their other business under one payroll and HR system. Juggling different local requirements, compliance rules, and legislation is incredibly challenging – and time intensive - without a central, global, system. Over the past three years, multi-country payroll models have matured with both the integrated and aggregator models demonstrating a high quality, high efficiency service delivery level. At NGA, we have both these services via euHReka and agoHRa and we expect demand to increase this year. Beyond that, analyst NelsonHall anticipates that the compound annual growth rate for multi-country payroll will hit higher single digits for years to come.
Prediction Two: HR will genuinely go self service
One billion people access the internet through a PC, compared to 4.5billion going online via a mobile. Mobile is the future for business, and in order to support a more mobile workforce, HR must embrace employee self-service. ‘Self service’ take up is now becoming so widespread that the concept will disappear as all HR transactions are done this way.
In the last 24 months every HR project NGA delivered included a significant self service component. However, the move to self service and mobile presents some major challenges. The blurring of personal and professional device access will require significant business change. The key question is how can we allow mobile fully into an organization without compromising uniform access and security?
Prediction three: The rise of the HR ‘specialist’ and the fall of the 'generalist'
Self-service is reducing the need for generalists across the industry and 2012 is likely to see the eradication of the middle man in HR. Pure HR transactions will be increasingly automated, and self service will make it easier to enforce HR policies through technology.
However HR specialists who provide expertise within areas such as talent management, leadership development or analytics will grow their roles, providing serious business value. We see a vision where a service center and processing engine will handle HR transactions, and an HR expert group will assist line managers with bespoke programs, for instance, with regards to union negotiations, recruitment, analytics and leadership training.
It is our belief that the most successful businesses in 2012 will be those where HRDs have the relationships needed to work closely with the CEOs and CFOs and take a holistic view about what their most talented employees need in order to succeed. Employee satisfaction and loyalty are crucial in times of economic down turn, when businesses may have to take a ‘productivity pause’ before again moving up the growth ladder.
What 2013 will bring for HR: NGA's Outlook
"The challenge in 2013 is to ensure they move with the times, getting the most out of new and innovative HR tools and technologies"
"Workers are accustomed to using consumer web technologies and tools and expect a similar ‘consumer like’ experience in the workplace."
"As these new champions globalise, they will have to pay close attention to the ‘people’ aspect of their global aspirations, ranging from employer brand to global payroll regulation."
2013 will see technological and economic movements converge – and this will evolve the role of HR within business. For HR directors and business leaders, the challenge in 2013 is to ensure they move with the times, getting the most out of new and innovative HR tools and technologies that are now available and ensuring that HR plays a central role in developing wider business strategy.
Technology provides HR with incredible opportunities, but the challenge is to use them smartly, in a way that balances the interests of employers and employees. HR functions must develop the expertise to identify the right service delivery models and supporting technologies; create the business case; implement new technologies; and ensure they seek the right advice on how to exploit them.
As business continues to change quickly, it is important that HR becomes more agile. This requires HR solutions that can be quickly adapted to meet the demands of changing business needs. Processing and technologies must be standardised and simplified to remove complexity. HR must be close to the business to understand the impact business changes have on HR process and be able to deploy changes rapidly. Speed is critical.
It is next to impossible to predict how global or local economies will fare in the short-term, but we can say that those businesses with agile, low-cost, and unified HR processes will be best-suited to grasp opportunities arising from the first stages of economic recovery.
Seven key HR trends for business leaders to watch in 2013:
1. HR gets smart with data
In 2013, big analytics trumps big data. It’s no longer just about the data and information you can access, but about what you’re doing with it and how it’s being incorporated into business strategy. New technologies will allow HR to move from looking backwards and collecting historical data, to looking forwards and delivering predictive analytics. But HR analytics needs a solid design for the right and relevant business insights and KPIs. It should be more than merely a data delivery mechanism.
Businesses that can pull together global HR data swiftly – and correlate it in a meaningful way – will be equipped to compete better. They will be able to correlate ‘people data’ with business data and subsequently make ‘people decisions’ in line with strategic business direction. It’s important to involve HR data analysts early on. HR leaders should consider bringing in fresh talent with a background in analysis and statistics. HR dashboards, business-related KPIs and (predictive) analytics should be on every HR leaders’ to do list for 2013, as they will be one of the most strategic tools in getting credibility at the board table.
Organizations need to understand how to use data to learn more about their workforce and to recognize that the workforce enables the business to achieve desired business outcomes. Once businesses start to develop a strategy for workforce data, they need to build a technology plan that will enable them to collect and analyze the data that is required to support the strategy. This will require the business to identify resources that have the analytical skills necessary to drive a workforce big data strategy. Deploying an effective big data/analytics strategy will require time, forward thinking companies need to get started on their strategies now.
2. The cloud requires wisdom
Cloud solutions are being adopted rapidly by businesses. CRM was the first major business process to be moved to the cloud, HR is following quickly. Buyers must determine how and when cloud solutions will have an impact on their business. They must also be aware that many vendors are doing their latest capabilities innovations in the cloud and not on their on-premise solutions. If customers want to deploy some of these new capabilities, they may be required to adopt a cloud solution.
At NGA we talk about Business Processes as a Service (BPaaS): this reflects our expectation that businesses will look for providers that can offer a blended and integrated mix of services and technology – not just one or the other. Organizations will continue to require functional expertise and add-on services ‘wrapped around’ their cloud-based technology platforms Running technology in the cloud, doesn’t mean the complexity behind certain HR processes goes away.
HR professionals should not be too prescriptive about their embrace of the cloud – they should take time to find the solution and delivery model that works best for their business and realize the cloud is not an ‘all or nothing’ decision. It is the sensible combination of existing, well-performing assets and future possibilities which will define winning HR delivery strategies.
It’s important to recognize that this marks the beginning of a business evolution, not the end. In the future we expect to see more companies moving entire businesses processes into the cloud, not just the technology component, but also the functional side.
3. Consumerisation continued
In 2013 everything HR goes mobile. We have seen a proliferation, not just of devices and formats, but also of networks. In many countries there is now an expectation of wi-fi in virtually every building - 3G and 4G - and of increasingly powerful speeds and capacity.
Workers are accustomed to using consumer web technologies and tools and expect a similar ‘consumer like’ experience in the workplace. The workforce expects tools to be easy to use, enable them to access information quickly and from anywhere on the device of their choice. We are in an age where workers, for the first time, have better access to technology at home than they do at work.
These expectations will continue to expand, develop and create a new mindset that business happens on the move – in the train, on a plane, in a coffee shop – enabled by a mobile workforce, using a wide variety of devices and technologies. Easy-to-access, low-cost mobile technologies will have a strong impact on supporting HR service delivery, enabling greater deployment of employee and manager self-service, location-independent access, and diminish reliance on old technologies such as kiosks.
The increased acceptance of BYOD (Bring Your Own Device) policies will be an additional accelerator to the importance of mobile as employees and managers consider access to state-of-the art and mobile hardware. HR will need to be increasingly aligned with IT departments to balance the benefits and risks of BYOD.
The rise of mobile puts HR in a unique position – there is an opportunity to not only report on data, but also to collect it, based on geographical location information. Where employees are, what they are doing, who they are with? Businesses will need to be very careful about understanding what data they have access to and how they use it.
4. Social means business
Forward thinking companies are beginning to apply social concepts to a variety of HR processes, typically starting with recruiting and performance management, but rapidly expanding beyond that, enabling enterprise-wide collaboration through social technologies. For example, social technologies make the performance management process more real-time and extend the process beyond the traditional manager-employee interaction which was common in the past. In 2013 HR will find itself in a unique position to be in the driver’s seat of social transformation, both from a cultural and technology perspective.
The aim of most of new social business tools is to improve communication, collaboration, and workforce performance. In the current economic climate, there is a renewed focus on talent management and worker productivity and we expect more companies to look at how social tools can help advance these objectives. In order for this to happen, social solutions need to be better imbedded in other tools and processes rather than remaining stand-alone tools such as Twitter and Facebook, which we often see today.
5. Globalisation, with a twist
The rise of ‘Chinese Champions’ is something to monitor carefully in 2013. Successful Chinese companies have begun to move beyond their home borders and into other markets. This is a trend that can only continue and we expect to see Chinese businesses becoming major forces in markets across the globe in coming months and years. As a result, we may also see emerging economies moving towards a ‘Western’ model of HRM, with a focus on human capital management rather than employment compliance and commoditisation of labour.
As these businesses begin to emerge and expand, HR will play an ever more critical role within their organizations. These businesses will turn to partners that can provide scale, consistency and a global reach, quickly. They will look to outsource this technology and expertise to partners they can have confidence in. This will allow business leaders to concentrate on expansion strategy and agility.
In general we expect the rise of global leaders from ‘new’ geographies, such as Brazil, China, Turkey, and Russia. As these new champions globalise, they will have to pay close attention to the ‘people’ aspect of their global aspirations, ranging from employer brand to global payroll regulation.
6. Compliance matters
Due in part to the passing of the Sarbanes-Oxley Act, which requires a company’s annual confirmation that its internal controls over financial reporting are effective, accurate and transparent, financial reporting is becoming increasingly crucial for business.
In 2013 we are going to see the increasing importance of Service Organization Control Reports (SOC1), in replacement of SAS70, as a critical proof point for providers. SOC1 verifies that a service organisation has completed an in-depth audit of its internal control processes, including IT and enterprise wide controls, related to its outsourced services. With cloud-based systems it’s not always clear where sensitive people-related data is hosted and who can access them – in such a context, control reports will help provide ease of mind to buyers of cloud services.
In today’s world, service organizations that provide outsourced HR and financial services can affect the overall financial presentation of a company. Regulations are getting increasingly complex with breaches subject to litigation. As such, assuring that outsourced and SaaS-based services are being properly performed and monitored in order to ensure the successful presentation of clients’ financial reports will continue to be a top priority in 2013.
7. Planning for workforce planning
As HR continues to leverage the benefits of new technologies and delivery models, it succeeds in shedding off administrative burden and focusing on more forward-looking, strategy-supporting engagements, such as workforce planning.
Access to a rich set of HR data, understanding the impact of corporate strategy on HR, and the ability to plan for various business scenarios are key requirements to allow for strategic workforce planning. When done right, strategic workforce planning can create a true competitive edge to early adopters, with HR in the driving seat. With technology trends converging in the coming years, we’re expecting forward-thinking HR leaders to start planning for workforce planning in 2013.