Top 10 HR Predictions

Organisational development trends to watch this year

Last year was a tough year for many of us. The human resources (HR) function was not spared, either. In the past few months, I have had conversations with hundreds of HR leaders and chief executive officers (CEOs), and our research team has also inundated me with various pieces of information on trends for HR in the future. Based on these conversations and research, I am boldly presenting my Top 10 predictions on HR and organisational development trends for Malaysian and Asian businesses for these next few years.

Listen to its corresponding podcast:

1. HR will finally go digital in a big way

The theme for HR in Asia in the next few years could possibly be summarised as “digitising HR.” A Deloitte report claims that HR and business leaders would have to rethink ways to manage, engage and develop people with “everything becoming digital.”

The digital organisation is already captivating businesses with big data, the Internet of Things (IoT) and other tech-related innovations that help drive business productivity and customer engagement.

HR, likewise, needs to invest wisely in digital learning, digital cockpits and various new forms of digital HR innovations. HR must also experiment and learn to leverage digital tools for crowdsourcing, whereby we can obtain referrals, ideas, content and HR services through online communities.

Another key reason for HR to jump on the digital bandwagon is compliance. With so many laws and requirements to adhere to, HR leaders will not be able to cope unless they turn to support from technology. This year could mark the era of HR finally becoming a tech-savvy function.  And this is just the start. HR needs to move from understanding technology to being able to drive technology in its function.

2. HR will start focusing on the employee experience

In the past few years, CEOs and business leaders have focused on “customer experiences” with the aim of delighting and “wowing” their customers to drive retention and increase wallet-share for their businesses.

HR, however, has generally done very little to translate these customer “wow” moments into employee “wow” experiences. This year will mark the beginning of HR learning from the marketing and customer service functions to develop more engaging “employee experiences.”

In various conversations with local key HR leaders recently, I have heard that many of them are zooming in to drive “employee experiences” as a key agenda for this year. Employee experience includes how the employee feels about the brand, their colleagues and even the physical and technological parts of the organisations, i.e. anything that can be seen, heard, touched, felt and even tasted in the company.

HR plays a critical role from the onboarding process, all the way to termination or resignation, to ensure a great employee experience for all their people.

3. Culture will be an important HR and business agenda

For years now, it was assumed that HR leaders were the ones managing workplace culture. Unfortunately, organisational culture is often the key constraint limiting growth and innovation in organisations. Your organisational culture drives the behaviour and priorities of your employees. Ultimately, this behaviour is dictated by the mindset and beliefs they have. Changing their mindset will result in changes to their behaviour, which could in turn bring you better results and revenue.

To develop culture is to intentionally shape the beliefs, underlying assumptions, attitudes, and practices shared by a group of people. This, in turn, alters the quality of the organisation’s results and revenue.

As more and more business leaders have been educated in 2016 on the importance of culture, 2017 will be the year they start to play an active role in getting HR leaders to start driving culture transformations and intentionally create a winning culture within their organisations.

4. HR will start investing in big data and real-time feedback

With the growing focus on improving employee engagement, and as more and more employees expect continuous feedback from management (more on this later), HR will need real-time updates on how operations are unfolding. Managing analytics and employees’ real-time feedback is increasingly critical for HR. Propelled by the need to drive productivity, big data will be a 2017 agenda item for most HR leaders.

The key hurdle? HR leaders need to re-educate and immerse themselves in statistics and technology. Without understanding analytics and linking it to human behaviour, most HR big data initiatives are bound to fail. This requires identifying new HR talent with statistical and data analytical skills. 2017 will see the start of this gradual movement of HR towards data and science.

5. Digital learning will take off in a big way, reinventing learning and development

Last year, we launched a digital learning platform for ourselves and other organisations to leverage on. It is a customised learning management system (LMS) that supports your organisation’s onboarding and learning needs and is loaded with content relevant to the workplace in Malaysia and Southeast Asia.

It costs USD250 per organisation per month (all-inclusive) and we have seen the huge impact it has had on smaller organisations that were struggling to provide customised learning solutions to their employees. This has changed the learning landscape significantly.

I believe that  we will see digital learning finally gain a foothold in organisations after years of being viewed as a less-desirable alternative to face-to-face learning. New socially-networked LMSes are being introduced and finding receptive, savvy users among millennials who are native technology users.

The good news is, digital learning is extremely affordable, efficient and impactful. Over the past five years, we have seen B2C learning sites like Coursera, Udemy and others mushroom. Yet, there were hardly any learning sites built specifically for enterprises.

The next few years will see organisations sourcing for robust B2B digital learning systems and embedding them into their company’s system and structure.

This might interest you: Why Digital Will Change The Way We Learn Forever

6. HR will focus on teams rather than individuals

In the past, it was mainly the learning and development functions in most companies that drove individual development plans and programmes. However, in a Harvard Business Review article by Rob Cross, Reb Rebele and Adam Grant, the authors reported that data revealed ‘‘the time spent by managers and employees in collaborative activities has ballooned by 50% or more’’ over the last two decades. Their research suggests that in some companies, more than 75% of an employee’s day is spent communicating with colleagues.

With this being increasingly the office norm, Google’s research team developed Project Aristotle to learn how to enable teams to thrive and become more productive. As with many other researchers, they have found that building great teams requires a different learning and development plan.

Many of the training programmes in our organisations are skewed towards individual gaps and ability. What we have realised is that team development is much more critical to organisational success than developing individual capability.

Again, HR will be tasked to figure out how to drive more team-based developmental programmes that will enable teams to grow and have no fear of working collaboratively.

7. HR will radically upskill for the future as work continues to evolve

Work is changing and HR will be the function tasked to manage these changes. With the advent of the IoT, robotics, and artificial intelligence in the workplace, jobs and roles need to evolve drastically in the near future. While 2017 may be a bit premature for HR to start redesigning their companies, it will mark the time that HR professionals start assessing their organisation and “test” their own function’s readiness for the future. A key change in work which will take place in the next 5-10 years will be that work will move from being “time-based” to “output based”. What this means is that we will be paying our employees based on output and not their time. This will require HR to redesign entire organisational models.

To prepare for the time when they must redesign job scopes and manage the various complexities of 21st-century organisations, more and more HR leaders will have to upgrade their own competencies and knowledge this year. It will be a daunting yet exciting time for the HR function as they strive to prove their value and showcase their importance to the organisation. Watch this space!

8. HR will begin managing the “rejected candidates experience”

I mentioned employee experience management as one of the new areas HR will start working on in 2017. Another huge area that needs improvement is the “candidate experience”.

Many HR leaders come across as if they believe they are gods in terms of their behaviour during the interview process. Here are some staggering findings from research institute Future Workplace: Almost 60% of jobseekers have a poor candidate experience when being interviewed for a position. Seventy-two percent report sharing this experience online or directly with a colleague or friend.

Not only is the interview experience a bad one, but follow-up processes are also lacking in most organisations. Sixty-five percent of job-seekers never or rarely receive declination notifications from employers.

HR plays a huge role in the organisational brand, and are in the forefront of inspiring future talent or possibly future customers, but instead they often create anger and resentment.

Dan Schawbel, author and research director at Future Workplace, adds:

Companies need to start humanising their candidate experience because jobseekers can easily share their negative experiences online and decide never to apply to that company again. Treat your candidates like you would your employees or customers because they have the power to refer strong candidates even if they don’t get hired.

2017 will see business leaders pressure HR to get this aspect corrected. HR has a huge opportunity to manage declined candidates in ways that benefit the organisation. At Leaderonomics, I often get numerous e-mails from candidates appealing for information on their candidacy.

Due to the overwhelming applications, I know our HR folks cannot connect with each one. Yet, this is a space we can no longer afford to overlook.

Our HR team, like others across Asia, needs to reframe the entire rejection process, be truly candidate-centric and care for them and ensure they leave with a fabulous experience and become ambassadors for our organisations.

Virgin is taking the lead in this area by creating a new experience for over 146,000 applications they decline annually. This has resulted in HR becoming a revenue engine adding US$7 mil in new revenue from declined candidates.

This required reinventing their candidate rejection process by mapping the current experience and then storyboarding a new magical experience. By sprinkling some commercial elements into the process, the rejection process became a way to build more love for the brand and create more customers.

9. Performance management systems will start to evolve

Over the years, we have seen the failure of individual performance management processes. In many organisations, performance management is hardly a science. There are still too many employees who do not perform but are rewarded, and many who do work hard but are barely recognised.

While there are calls from various consulting organisations to move to a team-based performance rewards system, there are still many who are apprehensive about such a system. To some, it may sound rather communistic in nature, or be inappropriate for other reasons.

I personally believe that in the next decade, we will move towards an output-based payment system where employees will be like freelancers today and paid on the output they deliver. This process is still in its infancy (it is sometimes termed the “gig” economy), but as more employees opt for the freelance route, and with businesses trying to rein in costs, this will become the norm.

How soon we will see such a system trending broadly in Malaysia and Asia remains to be seen, but we do know that the system at work in many of our businesses today is obsolete and requires a fresh rethink. You may already be seeing your current employees work with freelancers in a much more open and connected way.

In the interim, HR leaders need to tackle the performance management conundrum and ways to move to a more agile and fair system that leverages on the continuous feedback loop.

Employees increasingly seek daily feedback on their performance and not the semi-annual or annual process of the current performance management system. We will see a response to this taking shape in 2017.

10. HR leaders will move to Level 4 and become business leaders

Every time I am invited to speak on the evolving HR function, I reference this chart:

Figure 1

A few decades ago, HR professionals were simply administrators in most companies. They did payroll and took care of administrative matters. Over the past decade, however, we have seen HR leaders move to the next level – that of a functional expert.

Like their counterparts in Finance and IT, HR leaders became experts in manpower planning, recruitment and various tactical areas. But the evolution didn’t stop there.

HR soon moved to Level 3 and became strategists. Strategic areas like succession planning, talent management and learning and development were leveraged as business weapons and utilised fully to optimise organisations and drive significant growth and productivity.

The final frontier is to see HR as business leaders. Although this is a huge leap forward, we will see a few HR leaders in Malaysia and across Asia begin this transition. We already have a few examples of them today, but 2017 will see many more empowered HR business leaders take the helm at their organisations.

Roshan Thiran is CEO of Leaderonomics and is excited to see the changes in the HR function. To connect with him, follow him on LinkedIn or Twitter @lepaker. He looks forward to dialogue with HR leaders on what they think will be the way forward for the HR function in 2017.