Colette Philp, UK HR Country Lead at SD Worx UK
For HR leaders, the momentum of rapid transformation driven by the pandemic remained
steady this year. 2022 has seen a need for constant learning, adapting and innovating to meet the changing needs of businesses and the shifting expectations of employees. From organisational talent imperatives, such as closing skills gaps and heightening competitive innovation, to employee demands for flexibility and digitalisation, HR has been at the forefront of a profound workplace revolution.
At the heart of all of these challenges has been the importance of a people-first, personalised and digital approach to HR. Across all industries, employers are seeking ways to streamline HR functions, using digital tools to realise process efficiencies but also opportunities to harness the resulting data to drive greater insights into business needs and employee experiences.
For employees, the workplace has become somewhere they expect to match their consumer-grade expectations for technology and digital services. And, while a war for talent still rages, employers who have been behind the digital curve have had to rethink and reset or risk losing their competitive edge.
As we embark on what is set to be another transformative year, here are my predictions for how 2023 will play out for HR.
1 – Taking strides towards digital maturity
Over the last two years, rapid digital adoption has enabled dramatic transformation, however, many organisations have yet to reach digital maturity. Right now they are dealing with a burden of legacy and fragmented HR applications which are not delivering optimum returns.
For example, while our research shows that 61% of UK companies are using HR and people analytics to gain insights into areas such as staff shortages, absenteeism or employee turnover, many have yet to begin seizing the benefits, with four in ten UK companies reporting no analytics capabilities.
Integration of disparate systems through end-to-end solutions will be the next step towards real digital maturity. By concentrating on integration the prospect of real cost savings and simultaneous heightening of employee engagement can be realised through deeper, connected analytics capabilities. The need for this analytical integration has been recognised, with over a fifth of organisations saying they would like to deliver analytics solutions over the next year, a sharp 15% increase from last year.
And, as organisations struggle to recruit and retain vital staff, integrated people and HR services and analytics will be especially pertinent for organisations seeking to strengthen their talent pipeline. Without a digitally integrated approach, organisations will struggle to attract and engage employees in the ways they now demand.
2 – Digitally enhanced HR relationships
From streamlined digital holiday bookings or absence requests to digitalised payroll services, employees are increasingly looking for the same ‘click of a button’ digital experiences they enjoy in their personal lives to be mirrored in their professional ones.
For example, our recent research found that over half of the Gen Z workforce (54%) crave better digitalisation across HR processes and solutions in the workplace. Over the next year, we will see employers seek to meet these expectations through personalised digital approaches. For example, through targeted notifications such as, ‘Don’t forget you’ve still got annual leave to take’, and ‘You might be interested in this training session.”
While digital experiences are now expected to offer targeted and relevant support across a range of HR factors, the desire for in-person HR relationships remains strong. Digital maturity mustn’t come at the expense of a personalised approach to HR but must enhance it. By integrating digital processes with analytics, technology can help reduce admin tasks and free up time for essential ‘human’ engagement. Striking this balance lies in understanding where employees most want the personal touch and delivering on it.
3 – Internal talent marketplaces expand
Traditional workplace structures and roles are increasingly being broken down, with fluidity between departments creating much more movement of internal talent. This positive breaking of barriers and silos means that talent can now be dynamically deployed to complement and support colleagues across other teams. This is leading to rising interest in enhanced internal marketplaces that facilitate this fluidity. It is no longer about looking outward to fill gaps but looking inwards at the talent at your fingertips.
Talent platforms driven by data analytics will be increasingly used to connect hiring managers with suitable internal candidates, ensuring an optimal match between availability and the nature of the job. By being quickly able to tap into what skills are available within the workforce, HR will be able to effectively leverage existing talent. At the same time, this enables employees to explore new opportunities and areas for growth within the company, rather than looking elsewhere to build a career path.
4 – Delivering more with less
No one is immune to the tough economic environment we are facing. In the next year, organisations will walk a tightrope of needing to invest in innovation and transformation, while also being focused on efficiency and value. Tools that do not deliver will be rooted out, while those that help deliver strategic objectives will remain. This includes those that demonstrably help to attract and retain employees and those that provide process efficiencies and analytical insights that shape dynamic HR practices.
For example, core HR processes such as payroll are ripe for outsourcing and digitalisation, with cost and time-saving efficiencies easily made through the adoption of such tools. Not only that, but to meet employee needs, more organisations will look to integrate smart rewards into their strategic pay policies, with customised options, flexible pay periods (pay on demand) and flexible rewards where employees can in part determine the composition of their pay package.
Analytics will reign
With over half of European companies now using HR and people analytics when making both strategic and operational decisions it is clear that organisations appreciate those analytics bringing hard facts and robust advice to business strategy. In the next year, the desire for these tools will rocket as the wider economic climate continues to be complex and ever-changing.
From recruitment to productivity, wellbeing support and pay and benefits, digitally enabled analytics will form the backbone of HR strategy not just in 2023, but for years to come.
