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.