2020 trends in Human Capital Management Market
Contrary to what Shakespeare thought, there’s a lot in the name and the most relevant example is the Human Resource industry which is popularly known as HR. Gone are the days when humans were thought of as merely resources and their value was measured based on the output they were producing, like machines. In the prevailing times, HR has significantly changed not just in its approach to employees but even in its entirety. So much so that a lot of MNCs have started questioning the use of the phrase Human Resources and some have even ditched it for a more reasonable approach and opted to call HR as Happiness Officers or People and Culture.
Businesses today are all about people and the culture they stand for. Organizations have started understanding that treating employees as a cost is not doing justice to the importance of their contribution. Employees in fact are the main revenue drivers, they are the ones with a first-hand experience of the culture, the product, the value proposition and the services. Not only do they have insights on what’s working and what’s not, their insights are actionable, and they are the first ones to engage with the activity to achieve the right objectives. As a result, the focus of the organization must shift to looking at several nuances of employee retention and engagement, which is not possible unless the HR departments embrace the new technologies that are available in the market today.
Our team of analysts performed a thorough research on Global Human Capital Management Market for 2018 to 2023, and unearthed key trends in the industry which will pave the way for the future. Therefore, it’s not surprising that these trends are being talked about already during leading industry events. The second part of the research also covers some challenges that may slowdown the process of digitalization in HR, which has long term disadvantages. Hence, in this blog we’ll take a look at the top four trends that are the talk of the town in the industry.
Trends in the Human Capital Management Industry
1. HR Analytics
Simply put, HR analytics is the data-driven approach to identifying and analyzing people-related problems. Often decisions at organization level are based on gut feeling or instinct. Leveraging HR analytics gives HR practitioners the ability to create more evidence-based strategies which they can leverage while seeking management support for decisions. HR analytics can become very helpful in organizations where the rate of retention is low. Often HRs know about the problem of people resigning too frequently but they cannot pinpoint to the reason why. With the help of data, it’s possible to measure not only the rate but the various reasons leading to the attrition. So much so that HRs can even tell what management/team decisions can lead to an employee resigning in the future.
2. New Technologies
The ever-evolving technology landscape is proving to be an important aspect of the Human Resource function as well. The rise of advanced technologies means a lot of new ways of doing the age-old things are getting incorporated in the system as we speak. Hence, for the HR teams to be able to understand and utilize the new technologies such as RPA (Robotic Process Automation), Artificial Intelligence, and Virtual Reality in day to day execution.
To quickly cover the use of these new technologies, RPA is an application used for automating business processes especially the data-driven ones. Particularly in recruiting, from tracking applications, to updating employee record, RPAs can cut down on a lot of manual intervention. Now coming to Artificial Intelligence, often it’s confused with robotics, whereas AI essentially is an algorithm that takes data as an input and goes beyond the scope of work of the data to find out some meaningful usage of that by looking at the codes. The point worth noting here is that AI can do all this by self-learning and doesn’t need human intervention to grow and mature. Virtual Reality on the other hand is very simple to understand. What it does is creates a 3D like image of the environment with the added benefit of interacting with it. As a result, Virtual Reality is gradually emerging as a huge benefit for recruitment. In fact, the British Army has even used it to recreate various combat training, tank training, adventure training and parachute training experiences.
3. New Work
Unlike the traditional approach of 9 to 5, new work is not just about one-thing, but it happens to be a collective of several interconnected things. This term is already being used in several MNCs and is the most anticipated change to come in 2020. What does it stand for? Essentially with the rise of millennials in the workforce, the concept of 9 to 5 is directly challenged. This is the first generation that is tech savvy and values digitalization as they are born in a digital age. As a result, their expectations range from flexibility to remote work. As more and more millennials disrupt the work force status quo, organizations depend on them greatly for the digital transformation which has become the need of the hour. The technologies that are used in human resource management can be used to fully engage the millennials and embrace the new work concept as the Generation Z that will follow the millennials will find it easier to adapt with the work culture of modern organizations.
4. Employee Experience
The journey that employee takes which is all observations and perceptions while working for an organization can be summed up as employee experience. The HRs role requires them to create successful interventions across all these stages of an employee lifecycle which includes, recruitment, hiring, onboarding, employee engagement, steering them towards better performance and then offboarding. By understanding and building on this lifecycle, employers can reap huge benefits for the business and even the employee feels satisfied. In organizations where the HR focuses on employee engagement, issues of leaves, absenteeism, retention etc. reduce significantly. As a result, in 2020, this is likely to be another major goal for the HR to achieve in an organization.
To summarize these trends, the need of the HR in 2020 would be to use all the available data and rely on tools that can deliver insights related to the organization health and overall employee experience. However, its easier said than done. More often than not, despite having access to the tools and resources, it becomes challenging for the HR to execute the new age techniques. To find out what these challenges are, read our blog on Challenges facing Global Human Capital Management Industry in 2020. Let us know if you enjoyed reading it on firstname.lastname@example.org.