Top 5 HR Trends in 2013

13/2/2013
By Rajeshwari Sharma

As businesses move forward in 2013 looking for newer growth avenues in a sluggish economy, leaders are increasingly banking on talent to achieve this growth. While business demands, margin pressures, declining budgets, HR technology, social media, data and analytics are all reshaping the contours of HR, what is noteworthy is an increase in HR’s focus on these aspects. Traditional ways of doing things are being re-examined as HR leaders look at more effective ways of managing and aligning talent with the new business objectives.

With more eyes on HR than ever before, we asked experts what trends the HR fraternity could expect to see this year. Here are the top five HR trends we found are going to shape the HR landscape this year and going forward.

1. Rise of HR Business Partner

 Growth is top priority for most companies and CEOs expect HR leaders to partner with them to execute the growth strategy. As the pressure to add more strategic value intensifies, it is critical that HR abandons inefficient silos and finds better ways to contribute to the organization success, says Sridhar Ganesan, director and rewards practice leader, Hay Group India.

A Hay Group research in 2012, based on responses from 1,400 HR professionals and senior management from around the world, revealed that in many organizations, the HR function is still holding on to traditional siloed processes and inefficient approaches, resulting in slow strides in becoming strategic business partners within their organizations. More than a third confessed that their HR processes are organized into expertise-based silos.

Effective HR management will be about the optimum deployment of people to do the work that needs to be done in order for the organization to thrive, according to Ganesan. “It will be about making sure that the organization is fit to execute its business strategy, that the jobs that are needed to make the organization function are in place, that the right people are in these jobs, and that they are motivated to deliver the required performance,” he adds.

Ganesan cites an example to make his point. “A classic illustration of the disconnected nature of HR is when a line manager is approached one week by a reward advisor who needs to understand a job for pay purposes; followed by the learning and development advisor two weeks later who needs to identify the training needs associated with the job; and then later by the recruitment specialist, who needs to understand the job in order to go out and find candidates.” HR needs to streamline and coordinate efforts, as well as benefit from greater insights across the HR functions. Developing the requisite competencies is one way HR professionals can acquire a voice in the board rooms.

Going forward in 2013, organizations will need an agile, responsive, cohesive HR function that is properly integrated, not only as a discipline itself but within the skeleton of the organization as a whole.

2. One World, One HR

Growing competition, margin pressures and economies of scale are driving companies around the world to increasingly shift towards global operating models. In today’s business world, increasing globalization is a given, with international competition likely to grow fiercer and markets even more diversified, says Mohinish Sinha, Leadership and Talent practice leader, Hay Group India. “We see ‘globalization 2.0’ take centre stage, largely due to a shift in the global balance of power to Asia and to the rise of a global middle class. India and China are rapidly becoming world powers, Asian management practices and models are becoming more influential, and emerging nations are increasingly trading between themselves. And the global business world is getting riskier too: greater interconnectedness creates greater volatility, making financial crises, pandemics, international organized crime and cyber-terrorism increasingly likely.”

Experts say that international companies will need to adapt their global strategies for local markets. Successfully managing the competing demands of global and local will depend on the extent to which they foster local participation in decision-making, create culturally-diverse (and often virtual) leadership teams and encourage cross-country and cross-functional collaboration. The best global companies will be those that operate like a flattened matrix, where information and authority flow in all directions rather than cascading down from the top.

According to Sinha, the leaders of 2013 will need to be multilingual, flexible, internationally mobile and adaptable, and culturally sensitive. “And if that was not enough, they will also need to be highly collaborative and strong conceptual and contextual thinkers. They will require the ability to lead diverse teams (cross-functional, cross-cultural, cross-country) over which they may have no direct authority, and to find new ways of engendering personal loyalty in an environment where the old loyalties between employer and employee are declining due to the distance between them,” he says, adding, “what globalization 2.0 makes abundantly clear is that the days when one or two ‘heroes’ sat at the top of organizations dictating strategy are well and truly over.

3. Enhanced Employee Engagement

Employee engagement continues to be the one of the top HR challenges as most companies are still struggling to get the employee engagement part right. The Aon 2012 Trends in Global Employee Engagement report, covering more than 3100 organisations, found a small improvement in engagement levels overall, including in HR areas, but concludes that companies are not focusing on the issues that matter to employees.  The 2012 Global Workforce study from Towers Watson echoes the same dilemma. Its survey of 32,000 full-time workers showed just 35% of workers as highly engaged.

According to the report, organisations will need to focus on enabling workers with the right set of tools, resources and support, and creating workplaces that are energising to work in as they promote physical, emotional and social well-being. Organisations will need to put renewed focus on getting its employee engagement practices right in 2013.

4. HR and Technology

The HR manager’s greatest ally amidst all these developments has perhaps been technology. Ranging from general media like emails to specific solutions like employee databases with bolt-on hire-to-retire functionalities, e-Learning, telepresence, attendance tool etc., have made HR improve the quality and speed of its responsiveness to different organizational demands. “Knowledge is fast becoming the powerhouse of the global economy, its instantaneous exchange facilitated by the internet. Digital tools offer cheap, easy and fast communication, cooperation, organization and production, and workplaces are no longer tied to brick and mortar locations. In this climate, lifelong learning and networking are essential and will become engrained, as organizations will no longer be able to rely on traditional hierarchies and career paths,” says Gaurav Lahiri, managing director, Hay Group India.

Social media and mobile devices are raising the bar on HR service delivery. HR has an opportunity to use social media and mobile tools to create communities for sharing knowledge - and to support employees through direct yet informal communication. Today, social media ROI success stories and case studies are plentiful and provide compelling evidence for organizations to embrace openness, fuelled by collapsing boundaries, increased competitiveness and demanding customers.

“As employees interact with each other on enterprise social systems, the structure of the organization itself changes. Silos give way to shared networks, knowledge sharing and collaboration across locations and business units,” says Gautam Ghosh, a Social Business and HR Consultant in his blog post - How Engaging in Social Media Can Make You a Better Professional? In addition, cloud computing is changing the way people and businesses work, turning conventional ideas about time-to-value, service levels, infrastructure needs etc., on their head.

Experts say there are significant benefits to be had when HR managers can support their organization’s participation in virtual spaces:

• Clearer and more consistent corporate visions and strategies
• Access to unexpected knowledge capital outside of the formal organizational structure
• Increased stakeholder ownership and accountability
• Improved corporate social responsibility.

Lahiri recommends using such tools but with a caveat. He says, “The tools should not be used as the primary filter for recruitment and selection because the concept is relatively untested and would require a controlled environment, which can be expensive. It may also be biased in favour of the younger members of Generation X and Y, who are more familiar with the technology; but it could be a challenge for the more senior baby boomers.”

5. HR Data and Analytics

There is a growing need for HR professionals to understand how people management initiatives lend value to business to be able to augment ones that generate utmost value. Just like decisions in the Finance function are based on revenue, expenses, profit and shareholder value, and Marketing decisions are based on customer and cash flow impact, similarly people decisions should be driven by rigorous, data-driven analysis. This necessitates HR Analytics or the use of data (not just HR-specific but organization-wide data), metrics, statistics and scientific methods, with the help of technology, to gauge the impact of human capital management practices on business goals. Experts say while many organizations have HR information systems in place, few capitalize on the data and the technology in ways that can drive business performance. Most still do not make people decisions with the same rigor as they do decisions about customers, products, supply chains and business strategies. When it comes to workforce decisions, they too often rely on intuition and conventional wisdom. But with businesses’ increasing demands from HR, the use of HR Analytics tools in decision making is only on the rise.

We will continue to move ahead into 2013 with these trends and even see more from each of these trends and many others in near future. The next wave of HR trends is here. The question is: are you ready?

Rajeshwari Sharma is Editor at SHRM India.