Six weeks into the new year, HR organizations are already well into the thick of it. The Hackett Group’s recent poll of HR leaders identified the top-of-mind items defining the HR agenda this year, projected budgets, headcount and workloads, and the improvement initiatives targeted at HR’s most pressing capability gaps. Five must do actions for 2020 are clear from these findings:
- Find ways to do (even) more with (even) less: The pattern of organizations increasing, decreasing or keeping flat their HR headcounts and budgets has reversed this year. Those planning spending decreases has risen to 50% and only 13% expect no change. The headcount situation follows a similar pattern, with the number expecting cuts rising to 42% and 37% anticipating no change. The mix of constrained HR resources with rising workloads, makes it essential to optimize how HR resources are used. Self-service technology and global business services (GBS) are the favored tools for increasing HR efficiency and productivity. They are expected to see the biggest overall workload increases, at 8.2% and 4.8% respectively.
- Make culture, talent and technology top improvement priorities: HR’s most important objectives in 2020 are also ones it is ill-prepared to address. Topping the list is enabling a high-performing organizational culture. HR needs to work more effectively with top leaders to identify and reinforce the attributes of the culture that drive enterprise performance. Addressing the shifting talent needs throughout the enterprise remains a persistent challenge for HR and is the second priority on its 2020 agenda. HR must architect its talent management process for change and leverage information and analytics to better anticipate shifts in the business and the workforce. Increasing employee engagement is the third priority. Central to success will be taking steps to improve the people-management skills of leaders, which disproportionately impact employee engagement and performance. Coming in fourth on the priority list is leveraging HCM technology. With growing pressure to do more with less, HR organizations are placing even greater focus on using technology to improve productivity and increase the value of their services.
- Leverage high-payoff opportunities to adopt HCM digital technology: HR organizations continue to show high adoption levels of core digital HCM platform technology, especially cloud-based systems. Implementation of emerging digital technologies is gathering momentum as well. HR needs to sustain this trend. A majority have already deployed next-generation cloud-based core applications on a large scale and adoption is expected to grow by 26% in 2020. Robotic process automation (RPA) is picking up steam, with nearly half implementing it on at least a small scale. Results have been impressive – 91% have been able to achieve their objectives for the technology. Deployment of emerging technologies such as chatbots/virtual assistants and cognitive computing/ artificial intelligence is progressing steadily. Implementation of chatbots/virtual assistants is proving highly effective so far, with an impressive 89% of respondents meeting or exceeding expectations in terms of realizing business objectives. More HR organizations need to accelerate implementation of these technologies. Cognitive computing/AI has proven to be a mixed bag to date and bears watching closely in 2020 as adoption experience increases.
- Set realistic stretch goals and expectations: The most substantial hurdle to HR achieving its 2020 objectives is overcommitting to unrealistic or too many improvement goals. HR organizations have been persistently behind the capability curve and the deficit cannot be made up in a single year. It is important therefore to prioritize improvement efforts and devote sufficient resources to their execution. Taking a disciplined portfolio approach can drive steady year-to-year progress. Make sure the portfolio contains a balance of multiple quick payoff projects and a few longer term, complex transformation initiatives.
- Keep pace with a shifting enterprise agenda: Enterprise cost reduction is on the front burner again. Operational cost takeout is a key enterprise strategy this year, along with organic domestic growth. Cost optimization is the most common major initiative on company agendas as are digital technology-related targets such as data and analytics, platform modernization, and digital transformation. This should signal to HR to increase its support for the people aspects of these initiatives such as training, and change management. Cybersecurity remains the top perceived risk. Effective cybersecurity strategies include organizational safeguards that HR should lead such as inculcating the right precautionary behaviors among employees and instituting procedures to protect employee data.