Industry Trends

How Well Is Your HR Organization Adjusting to These 3 Trends?

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always-movingThis is a guest blog post by Eric Lesser, Research Director and North American Leader, IBM Institute for Business Value

It’s a bit of an understatement to say that human resources departments have significantly changed in recent years. And the way they’ll operate in the future continues to evolve.

With many businesses planning to undergo significant transformative efforts in the coming years, it’s important to step back and rethink the role of HR in your organization: what it needs to do and the strategies you need to have in place to enable the growth of the business. Likely, the ones you’re following today are ones that were designed for a different era.

Last year, IBM released Redefining Talent: Insights from the Global C-suite Study, which highlights many of the challenges and opportunities posed by the collapsing of traditional industry boundaries and the impact of wholesale digital transformation. CHROs realize that capitalizing on new technologies and addressing today’s market upheavals will require a workforce with very different capabilities, and an HR organization that is well prepared to meet these challenges.

In this report, we highlighted that organizations, in order to keep up with these trends, will need to become:

  • More flexible in obtaining new skills from the outside market;
  • More analytical in making workforce decisions; and
  • More social in capturing and acting upon employee insights.

Let’s take a closer look at these three drivers of change in the HR world, which are likely impacting your business.

Flexibility

From a flexibility standpoint, most companies already employing a greater variety of alternative work arrangements. Two-thirds of respondents employ third parties to provide contingent labor. More than half also use non-traditional work arrangements such as telecommuting and flexible working hours. Many intend to continue using such techniques to create a more flexible workforce. Further, an increasing number see the importance of reskilling as a critical approach over the next three to five years.

Figure 1
Flexible talent:
Many CHROs now rely on third parties and alternative work arrangements

FIG 7 CHRO-01

Analytics

From an analytics perspective, we see companies making small, but steady progress in their use of workforce analytics. In areas such as sourcing and recruiting, and performance management and evaluation, we see twice as many companies using predictive analytics to make decisions as we did in 2013.

And, we expect these numbers to rise as more organization start to apply tools such as cognitive computing across a wide variety of HR processes, analyzing structured as well as unstructured data and recommending actions regarding the workforce.

Figure 2
Future focus:
The number of CHROs who use predictive analytics to make smarter workforce decisions is rising

FIG 8 CHRO-01

Social

Lastly, with change occurring so quickly, organizations need to rely on employees more than ever to capture market insights, share ideas and generate innovations from the bottom up.  Nearly half of the CHROs who participated in our study use social tools to find out what employees think about general business issues.

But social approaches to capture new ideas and track employee sentiment on an ongoing basis are beginning to gather momentum as well. With today’s social technologies, companies no longer have to wait for a traditional employee survey to ferret out long standing problems; they can reach out to internal and external platforms to capture employee sentiment and highlight small issues before they become larger ones.

Figure 3
Digital dialogue:
Social tools can help CHROs capture key trends and manage change

FIG 9 CHRO-01

Flexible. Analytical. Social. These are three emerging capabilities that HR organizations will be charged with rapidly building to meet the demands of the future workforce. Combined, they will enable organizations to better anticipate change and respond to changes in their industry landscape — and more confidently pursue transformative efforts that will enable growth in the future.

Eric Lesser is the Research Director and North American Leader for the IBM Institute for Business Value. He is responsible for a global team of over 50 professionals responsible for driving IBM’s research and thought leadership on strategic business issues.

To learn more, check out IBM’s Global CHRO Study.

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