HR challenges for 2017 – and beyond

Man surveying city from rock
guvendemir/iStock
Dorothee El-Khoury
HR Practice Leader Europe, The Hackett Group
The Hackett Group
Share this content

The Hackett Group’s 2017 HR Key Issues report had much to reveal about the state of the profession – and the challenges and opportunities it faces in the near future. Based on a survey of executives from more than 180 large international companies, the report paints a picture of HR at a turning point in its history.

Never have the expectations from HR services been so high. When asked about the impact of digital transformation, 69% of HR executives predict that it will fundamentally change the talent needs of the business, and in the same time, represent an opportunity to deliver step change in HR performance, costs, quality, and cycle times – amongst other things.

As far as business executives are concerned, access to critical talent is seen as a major and growing risk for the business, progressing by 20% in 2017 compared to 2016, at the same pace as cybersecurity

However, HR functions will not be granted additional budget or staff: companies expect the function to cope with the forecasted 4% to 5% growth, but with slightly declining headcount and operating budgets (-1.6%)

So how can HR support the business in the process of digital transformation – while re-inventing itself to deliver value-add services, in a fully self-funded manner?

Technology

To overcome this challenge, HR executives must leverage new technology. Fortunately, many understand this already. 80% of HR executives expect mainstream adoption of digital transformation technology, including SAAS HCM platforms deployment, mobile computing, social media collaboration and analytics by 2020.

But this vision of the future could be far too optimistic, as only half of the respondents have defined their HR digital transformation strategy – and amongst those who have, only half believe they have the means the budgets and the competencies to deliver it.

In this context, HR will need to be realistic in the initiatives launched, and make sure that the broader business prioritizes its efforts, and that they get appropriate support from external partners – or other functions in the company – to deliver the initiatives that they do not have all the skills for.

Talent management

This year’s study also highlights a relatively long list of development areas for HR teams. For example, HR executives feel that their teams are not agile enough in addressing changing talent needs – specifically when these have to do with innovation, digital transformation or improving the customer experience.

As for the function’s own capability developments, HR Executives realise that their teams are not ready to implement and benefit from analytics capability, nor are they able to measure the function contribution to business value, or agile enough in their ways of working to rapidly changing business needs.

Looking outside and learning from others

In order to improve, it is clear that HR needs to look outward and partner closely with the business to be able to align and serve its wider objectives. As for the new capabilities, like analytics and performance management, HR should build as much as possible on other functions experience.

Finance have been investing in better performance management and analytics in recent years, and most of the approaches and tools can be shared/re-used.

Global business services (GBS), which is the next evolution of shared services, involves the integration of governance, locations, and business practices for all shared services and outsourcing activity for various business services functions such as finance, procurement, HR, and IT. GBS is an exceptional strategic enabler of business performance, enabling companies to deliver cost-effective and flexible service and operational excellence.

Consolidating the basis

On the positive side, this year’s study indicates that HR functions have made progress in integrating a workforce component in the company strategic plans.

HR executives also feel that the function is better at managing/reducing costs (and without hindering effectiveness) and at deploying HCM SaaS platforms.

A complimentary version of the research is available for download, following registration.

Replies

Please login or register to join the discussion.

avatar
15th Aug 2017 21:25

Very good overview of the challenges HR is dealing with in 2017. I think another challenge is the transition of talent due to the aging workforce and layoffs due to instability in the market. I think it is important for HR executives to create strategic plans that take into account said issues. It is important that layoffs are met with outplacement that can meet the standards of today's technology: http://blog.careerminds.com/outplacement

Thanks (0)
avatar
17th Aug 2017 12:29

HR services have been using the same old process since years now, but this report has unfold challenges , opportunities HR will face in near future. To adapt to this change HR executives must adopt digital transformation. One of such transformation involves use of AI in HR Technology. I have found this article which gives a panorama view of the Technology.
http://www.techfunnel.com/hr-tech/rise-application-artificial-intelligen...

Thanks (0)
By kwadia
18th Aug 2017 07:22

With thanks to Dorothee for a clear summary of the Hackett Group research, I'd like to highlight an interesting missing part of the striking call all-round for HR to get to grips with digital and with tech. That is that we have not yet encapsulated what it means to be an HR tech/digital professional. Either we can adopt partner models (in itself a new mindset for many HR leaders) or we can remodel our own in-house/in-HR capabilities. Both are very interesting strategic options for the profession!

Thanks (0)
22nd Aug 2017 15:17

Fantastic article, thanks for sharing these insights. Recruiting in itself will move in a new direction too. With the advent of tech like AI and Chatbots and their inclusion into the recruiting efforts, the future seems ready for a nice shakeup.

For HR it will be important to start embracing these new possibilities, as you noted. Finding world class talent requires hiring as a team. For all the advantages of technology, there needs to be a human touch to HR. Hiring as a team is the future, in my opinion. At Recruitee, we've written a whitepaper all about it. It's available for free here if you'd like to learn more about our insights: https://goo.gl/mypUyr

Thanks (0)