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If you’ve landed on this article, you already know how crucial human resources is to your company's success. And you will also know about the massive transformation the HR sector is undergoing. Driven by rapid advancements in artificial intelligence and automation, we are moving towards a data-driven future. The role of HR is evolving beyond traditional personnel management to strategic workforce planning and development.
At the same time, AI’s increasing influence means a growing need to keep the “human” in human resources. The future of HR involves balancing technology with empathy, transparency, skill-building, and a culture of learning.
As an HR professional, you may be wondering how to navigate this new landscape. Well, you’ve come to the right place! If you’re ready to explore the latest HR trends and want to stay ahead of the curve, read on.
Examining current trends in HR can give us more than a clue about what the future holds – what’s new today will become tomorrow’s norm. This is like a butterfly effect – the smallest of changes can create ripples that have a dramatic impact on the outcome. By understanding today’s trends, we can better anticipate and prepare for the changes that will come in the future. Indeed, several of the trends that have emerged over the past couple of years are already shaping the future of HR.
Already gaining momentum before the pandemic, remote work has become standard for many companies and is more than just a trend. Companies that don’t offer remote and flexible working options will struggle to attract and retain talent. Pre-pandemic, only 6% of employees worked remotely, but predictions say that number will be closer to 25% by the end of 2023, with healthcare, technology, and financial services being the top three industries with the highest number of remote workers. As we embrace the new normal and shift away from in-person contact, HR teams must find new ways to support and engage remote workers during this transition.
Prioritizing employee well-being and mental health in the workplace is another trend that gained traction during the pandemic. Organizations witnessed the toll taken on workers’ physical, mental, and emotional health. This sparked a shift to more holistic employee wellness programs.
In a study of 31,000 people from 31 countries published by Microsoft in 2022, 53% of those surveyed said they were more likely to prioritize their health and well-being over work than before the pandemic.
Previously, a company wellness program was as simple as offering healthcare. HR leaders are now implementing initiatives to support employees’ physical, mental, emotional, and financial health. Mental health days, wellness resources, and mindfulness programs are becoming the industry standard.
Accelerated by events during the pandemic, an increased focus on creating diverse and inclusive work environments has become more than an afterthought. Successful companies will be those that do more than just check boxes. Organizations thrive when their diverse workforce feels empowered and supported to bring their true selves to work. Human motivation is strongly linked to a sense of belonging and purpose, and diverse companies are 70% more likely to capture new markets, according to research by the Harvard Business Review.
HR departments must implement fair and equitable hiring, promotion, and compensation policies, and ensure their workplace culture is human-focused and inclusive by design. Companies that prioritize creating an environment of belonging and inclusivity that celebrates diversity and collaboration will ultimately foster greater creativity, productivity, and success.
HR leaders are already using technology to streamline HR functions, such as onboarding and benefits administration, and the global human resource technology market is expected to reach $76.5 billion by 2031. Artificial intelligence and machine learning can make data-driven decisions, track employee performance, and identify trends, but the challenge here lies in maintaining a balance. Technology mustn’t take away the human touch in a people-first industry.
Technology’s role in the future of HR means a workforce that embraces technology but still values the people behind the screens. It means providing employees with personalized, human-led support and guidance while leveraging technology to automate processes, analyze data, and make informed decisions.
The rapid evolution of technology shows no sign of slowing, and many roles are changing and evolving (Hello, ChatGPT!). Furthermore, new skills are usually required to master these tools. HR departments can provide training and development programs to help employees upskill and reskill to stay relevant in their roles.
Companies that provide training and development programs have an increased retention rate of 30-50% so it pays to invest in your workforce. By nurturing existing employees and making them the authors of their career paths, companies can spend less time recruiting new talent and expect higher retention rates – it’s a win-win!
Adopting agile methodologies can increase efficiency and allow HR professionals to respond quickly to changing business needs. This way of working involves breaking down HR processes into smaller, more manageable tasks. It also encourages collaboration and uses data to measure progress and improve. In fact, agile has a success rate of 70% compared to the waterfall methodology’s 58%. So if you want to succeed, perhaps it’s better not to go with the flow, and go agile instead! By utilizing agile methodologies, you can empower your team to work more efficiently, enabling quick responses to dynamic business situations, while also providing the freedom to be flexible and adaptable.
Consumers, employees, and investors alike are choosing organizations who demonstrate sound corporate social responsibility (CSR). This is the concept that businesses should take into account the impact of their actions on society and the environment and act in a way that is ethical and responsible.
A report by PR company 5W found that 86 % of millennials would consider taking a pay cut to work at a company whose mission and values align with their own. 83% want companies to align with their values, and 76% want CEOs to speak out on issues they care about. And where millennials lead, the next generation will follow!
HR departments are playing a crucial role in driving this change by implementing policies and programs to support sustainability, diversity, and social impact. As socially conscious Gen Z continues to move into the workplace, CSR should be at the top of the agenda for organizations that want to stand out and succeed.
We’ve examined the current trends in the HR industry, which gives us an accurate sense of what’s to come. The trends of today point toward three key areas that will shape the future of work:
Technology will continue to evolve. Digital transformation gives business leaders access to more efficient ways of working but necessitates continuous employee learning and development to keep pace.
Keeping people front and center amid remote work and AI revolutions is perhaps HR’s greatest challenge of the future. A Gartner study found that 82% of employees want their organizations to see them as whole people, not just as employees. As technology takes hold, and remote working means less face-to-face contact, HR professionals will need to find more innovative and creative ways to unite their people and foster a sense of belonging. Building employee experience means solid wellness programs. Diversity, equity, and inclusion are no longer afterthoughts. Social responsibility should be top of mind, as we move into a more socially conscious era with a workforce led by millenials and Gen Z.
But what about tomorrow’s trends? This year’s Human Capital Report by Deloitte describes the new vision of work as boundaryless. The old rigid ways of working are transforming into something much more fluid, and crucially, much more focused on human dynamics and interaction:
“In a boundaryless world, work isn’t defined by jobs, the workplace isn’t a specific place, and many workers aren’t traditional employees. Those who partner with workers and experiment with what’s possible will create sustainable work models and elevated outcomes—making work better for humans and humans better at work.”
With this in mind, let’s look at some of the shifts that will potentially shape the next few years in the workplace:
Though still in its infancy, the metaverse is already making inroads into the future of work. A virtual world where people can interact with each other in a three-dimensional environment offers us the opportunity to reimagine a collaborative, productive, and inclusive work environment. This new technology could also make remote and hybrid working feel much more authentic and human, closing the gap between the physical and virtual workspace. The metaverse can also be used for hiring, with companies like Samsung and Hyundai already using virtual worlds for recruitment fairs and staff training events.
Employees are also enthusiastic about VR technologies. The Future Workforce Study Global Report by Dell and Intel found that 66% of global employees would use virtual reality products in their professional lives, mostly for training purposes, while 62% believed artificial intelligence could streamline their work processes.
The metaverse is exciting for HR professionals and employees alike, but like any other technology, it poses its own set of challenges. Implementing a virtual reality experience requires significant knowledge, which means hiring new, or upskilling current employees.
It may highlight existing inequities within your organization, such as differences in tech-savviness or internet bandwidth access. Finally, as with any workplace, employee experience and safety must be front and foremost. This can be done with an agreed code of conduct for virtual spaces that aligns with company culture and values.
Algorithmic HR, or AI-powered HR, refers to the use of algorithms and machine learning techniques in various HR processes, such as recruitment, performance management, and employee engagement. AI uses data-driven decision-making and predictive analytics to optimize HR processes and achieve better outcomes. For example, algorithms can analyze candidate resumes and identify the most qualified candidates for a job opening. They can also predict employee turnover and identify flight risks.
AI can also improve employee experience, making it a valuable tool for HR business partners. Chatbots can provide employees with quick and efficient responses to queries, reducing the HR workload. Algorithms can also analyze employee feedback and identify areas of improvement in the workplace.
AI is already part of the future, with an IDC study predicting that by 2024, 80% of global 2,000 companies will use “digital managers” to hire, fire, and train workers in jobs.
However, algorithmic HR has raised some concerns regarding fairness, bias, and privacy. AI can inadvertently perpetuate discrimination, as it relies on historical data created by humans that may reflect those creators’ biases. It is imperative for HR professionals to use this technology responsibly and in alignment with ethical and legal principles. This is to ensure that certain groups of people or job candidates are not unfairly disadvantaged.
Skills-based hiring is an approach to recruitment and talent acquisition that focuses on assessing a candidate’s specific skills and abilities rather than only their education or previous job titles. A more objective, cost-effective, and future-focused approach to talent acquisition, skills-based hiring often leads to higher retention and an increased representation of people from historically overlooked backgrounds.
The practice has been gaining traction for several years, with companies like Google and IBM being early adopters. Yet it has been slow to catch on elsewhere due to a lack of DEI training.
However, 2023 is set to be the year the shift accelerates: last year LinkedIn saw a 21% increase in job postings advertising skills and responsibilities instead of qualifications.
The Deloitte report refers to this approach as unlocking the workforce ecosystem:
“You need to think of your workforce as an all-inclusive, boundaryless ecosystem, where different types of workers have different needs and make valuable contributions in different ways. This requires workforce strategies, processes, systems, and programs that maximize the unique contributions of different worker types while supporting them all in a more consistent way.”
Implementing a skills-based hiring practice in your organization requires some initial investment in training and a reorganization of processes. But you will continue to see benefits for years to come, as this foundational work can also assist with upskilling and reskilling employees.
Skills-based hiring is particularly beneficial in our rapidly changing work climate, as it allows companies to identify candidates who adapt to evolving technologies and trends. By prioritizing a candidate’s skill set over education and experience, business leaders can build a workforce that is better equipped to meet future demands. As the job market becomes more competitive and industries evolve, companies that prioritize skills-based hiring are likely to have a strategic advantage in attracting and retaining top talent.
With the abundance of new technology in the world of work, it may surprise some that the soft skill of the future is emotional intelligence. But it makes sense when you realize that maintaining human connection across remote, hybrid, and virtual workspaces is vital to the future of work. Emotional intelligence, or EQ, refers to a person’s ability to recognize, understand, and manage their own emotions and those of others.
This leadership style is another key point discussed in Deloitte’s Human Capital report:
“Leaders must put humans at the center of everything they do—designing for meaningful outcomes that benefit both the organization and the humans it touches. This starts with having genuine care for the people that you lead and replicating that in your actions inside and outside of work... You must demonstrate genuine care and concern for the people you lead in their work and their lives to build meaningful connections and outcomes.”
The leaders of the future are highly emotionally intelligent with the ability to work collaboratively and effectively with people from different backgrounds and cultures. CEOs who possess high emotional intelligence can inspire and motivate their teams, resolve conflicts, and create a positive work environment. They are also better equipped to manage stress and maintain their well-being. This is important for preventing burnout and maintaining productivity over the long term.
The good news is that emotional intelligence can be improved over time. You can help foster this skill in your employees, as well as build an empathetic company culture. Research shows that companies with empathetic cultures retain more employees and their teams are better engaged. It’s clear that emotional intelligence is essential for success in a rapidly changing and interconnected world.
It’s clear from examining these trends that the employee experience is fundamental to the future of human resources. Therefore, businesses need to prioritize creating meaningful and effective experiences for employees, just as they would do with the customer experience. But what do we mean exactly when we talk about the “employee experience”?
Put simply, employee experience refers to the sum of all interactions an employee has with their employer and work environment. This includes everything from their initial job search to their exit from the company. Everything from the recruitment process, onboarding, job training, workplace culture, work-life balance, communication with managers and colleagues, performance management, career development, and overall job satisfaction.
Now that you know what the future holds, you may be looking for a tool that can help you level up your HR processes and deliver an exceptional employee experience.
That’s where flair comes in! An all-in-one solution for future-ready HR teams, flair helps shape and perfect every aspect of the employee experience. From recruiting, hiring, and onboarding, to personnel files and exporting payrolls, flair makes it simple to store data and automate standard processes, freeing up time so your HR team can put in their hours where it counts.
What’s more, flair is built on Salesforce, so it can easily integrate with over 4,000 tools, enabling your organization to implement limitless processes across every department.
Using precise insights and rich data, flair gives you the tools to easily design, adapt, and scale a world-class culture that drives your company forward. The business value of embracing technology in human resource management is undeniable: increased productivity, reduced costs, improved compliance, and a more engaged and satisfied workforce all lead to improved business outcomes.
And you can count on us to support you.
At flair, we don’t just sell software – we practice what we preach. As a remote-first, agile organization we harness the power of technology while keeping our employee experience front and center. You can depend on flair to support your organization via our Learning Hub and up-to-the-minute articles on HR developments. Meanwhile, our Developer Hub has everything your tech team needs to set up and customize flair to your specific needs.
flair is the most effective HR tool to support your company and your people, today and in the future.
Book a free demo today to find out what flair can do for you!
As we move forward, it’s clear that the future of HR will depend on finding effective and innovative ways to balance the needs of the business with employees' needs.
By embracing technology, remote and flexible working, and with a focus on the employee experience at the heart of its evolution, HR will continue to be an essential driver of success for organizations around the world.
At flair, we believe that success is a question of culture. Our vision for the future is a world where culture powers every company. We are happy to lead the HR revolution by supporting organizations to embrace the future and design, adapt and scale a world-class corporate philosophy. Will you join us?