What can HR leaders expect 2011 to bring in terms of new trends and developments? We asked a number of HR experts to give us their thoughts.
By Andrew R. McIlvaine
The lull between the end of the current year and the beginning of a new one is always a good time to ponder what’s ahead.
For HR leaders, questions might include: Will a divided legislative branch and a backdrop of unprecedented government debt derail President Obama’s efforts to more closely scrutinize the nation’s employers?
Does the recovering economy mean that companies will inevitably see their most-valued employees slip through their fingers? And, what sort of new innovations will take place in HR technology?
The coming year certainly promises to be an interesting one for HR technology.
Jason Averbook, CEO of consultancy Knowledge Infusion in Minneapolis, says he sees three big trends coming at us: a big reduction in the number of vendors, a much bigger spotlight on tools that promote employee collaboration and what he calls “in-your-face” information.
“The capability for providing managers with context-sensitive information via online dashboards is finally here,” he says.
“So you’re going to see HR stop simply feeding them information, like head-count numbers or cost-per-hire, that no one — other than HR — really cares about, and instead giving them actionable intelligence, like ‘Your turnover rate is such-and-such and here’s what you can do to reduce it’ or ‘Your overtime cost is such-and-such and here’s what you can do to cut it.’ “
It’ll be information that managers won’t want to ignore, he says.
Kim Seals, technology practice leader for Mercer in Atlanta, agrees.
“I call it ‘dashboards with a purpose,’ ” she says. “Managers get lots of information pushed to them every day; what HR needs to do is provide them with dashboards that provide just five or so metrics that really matter to their jobs, and help them understand why they should care and what they should do about them.”
Applications for mobile versions of HR software will also continue to attract interest, says Seals. “We’re seeing a lot more interest from our clients as to whether an application will work on a smartphone; whether it will let managers approve something via their BlackBerry.”
Meanwhile, a growing number of vendors (including Saba, Ultimate Software and Workday) have or soon will have software that’s designed to encourage greater employee collaboration.
Yet, Averbook says, enterprise-wide collaboration efforts may be doomed to failure unless HR steps forward to “own” the process instead of ceding control to IT.
“Collaboration is the next generation of knowledge management, and HR has to make sure it’s intimately involved in this,” he says. “Otherwise, it could end up being yet another missed opportunity — it will be software that will end up not being used by anyone, which could happen if it’s simply left to IT.”
As for the looming vendor shakeout, Averbook says, there are simply too many vendors adding too little value at present. Furthermore, a growing number of employers are more interested in ensuring their applications work well together rather than in having “best-of-breed” software.
“Next year, you’re going to see a lot of companies looking to integrate and consolidate their systems with just one or a few vendors, rather than many, because they’ve realized that simply digitizing their processes isn’t nearly as important as integrating them,” he says.
“In 2011, I think you’re going to see a lot of vendors disappear,” Averbook says.
Talent management will also be a big focus of HR departments next year, say Jason Jeffay of Mercer and Jean Martin of the Corporate Executive Board.
“Our studies have shown that the percentage of high-performing employees who consider themselves ‘highly engaged’ is only at 3 to 4 percent,” says Martin, who oversees the Washington-based CEB’s Corporate Leadership Council, which examines HR issues. “As many as one in five say they’re actively looking for other opportunities.”
Of course, Jeffay says, companies won’t sit on their hands, passively watching their talent walk out the door. “Next year, we’ll see an increased intensity by companies on shoring up their talent pipelines.”
Those efforts will include “workforce segmentation,” says Jeffay, Mercer’s global segment leader for talent management. “It’s segmenting your workforce into critical roles and differentially investing in those segments to drive business returns.”
Pharmaceutical companies, for example, must come up with new blockbuster drugs but are faced with critical staff shortages in research-and-development, he says. So they’re investing in new and different career paths for employees in that area and, in general, paying far more attention to this segment than others.
Are there risks to such an approach? Yes, says Jeffay, but it’s really no different from the strategies companies have long used to retain their best customers.
“All customers are important, but some do drive more value than others,” he says. “If you approach segmentation with the right degree of finesse, you can ensure that all will feel valued and some will feel special.
“I think most people understand that certain parts of an organization play bigger roles, with respect to the bottom line, than others,” he says.
And, as the competition for talent heats up in the coming year, HR leaders will need to help distinguish their company’s employment brand, says Martin.
“When you have a very strong employment brand, we’ve found, you can actually pay people 16 percent less, on average, than the competition and they’ll still prefer to come work for you,” she says.
The CLC’s research indicates that what most attracts candidates to an employer’s brand is “job/interest alignment” and “the quality of the team [candidates] will be working with,” says Martin. “This is especially important for Gen Y.
“So you’ll need to demonstrate, as part of your employment brand, that you offer a great day-to-day working environment, and you’ll have to offer them jobs that map to what they’re interested in.”
This will require job offers and recruiting campaigns that are much more customized to individual candidates, she adds.
Another talent-related challenge, says Martin, will be finding managers who can lead globally.
“More than 86 percent of the companies we surveyed said globalization is going to be a major factor for them next year,” she says. “Globalization is the new strategic question for HR planning committees everywhere.”
Tools such as online self-assessments designed to help users determine — before they go abroad — whether their management styles might conflict with the culture of their destination may prove especially useful in this area, says Martin.
Jeffay also predicts fundamental change to the performance-management process in the coming year and beyond.
“We’re in this conundrum where performance has gotten so critical, yet performance management has become so trivial,” he says. “We’ve become overly enamored with managing the process while undervaluing the actual performance.”
In its current incarnation, he says, performance management is too heavily back-loaded: Managers are forced to spend too much time and effort measuring and rewarding performance that has already occurred.
“We’re starting to see more organizations shifting toward the front-end in terms of better goal-setting and expectations-setting,” says Jeffay. “They’re saying, ‘Let’s be crystal clear on what we need from people at the outset, rather than spending the end of the year trying to figure out what they did and whether it was enough.’ “
On the legislative front, HR leaders should pay attention to the recently announced findings of President Obama’s Deficit Reduction Commission, which call for increasing the age of Social Security eligibility to 69 by 2075 and curtailing the tax-favored status of contributions to employer-sponsored pension and healthcare plans, says Mike Aitken, director of government affairs at the Society for Human Resource Management in Alexandria, Va.
“These prescriptions are not very popular with the general public,” he says. “But the public also indicated in the recent election that they’re very concerned about the growing federal deficit. So I think you’re actually going to see these proposals get some bipartisan support.”
The favorable tax treatment of employee benefits represents a huge cost to the federal budget, surpassing even the lost revenue from mortgage-interest deductions, he says.
Meanwhile, a Republican-controlled House and a closely divided Senate will mean President Obama will have little to no chance of winning passage of legislation that’s even remotely as far-reaching as the Patient Protection Act.
Even so, employers should not expect any laxity from the feds on the enforcement front, he says.
“I think the real issue HR folks should focus on are the federal agencies themselves,” says Aitken. “You’re seeing the Department of Labor and the Equal Employment Opportunity Commission really start to gear up for a more robust regulatory approach.”
In particular, employers should prepare for enhanced audits in areas such as wage-and-hour compliance, safety-reporting practices and compliance with the Americans with Disabilities Act, he says. “These are all areas that employers will need to be paying close attention to.”