Challenges facing the Global Human Capital Management Market in 2020
From human resources to human capital, theoretically the industry has come a long way. However, the reality may not be the same. Often looked at as the responsibility of the HR department, employee engagement and wellness are now becoming an integral part of the business. While there is a lot of data on the negative impact on business when unengaged employees drag down productivity leading the business to revenue losses. Data regarding the opposite is still not available or talked about much outside the HR circles. Why so? In times when technology renders speed and ease of data collection as well as analysis, why aren’t we seeing numbers that can back the above theory? This is the question being asked in Industry events where HRs are discussing their challenges for 2020. In this blog, we have looked at some of the top challenges HRs will face this coming year. Take a read.
1. Transparency and Compliance
Businesses are increasingly being questioned about pay gap and gender bias. This is a sensitive issue and HRs are finding it difficult to deal with the questions that often lead to employees being dissatisfied, disgruntled and sometimes even leave the job for another company. Dealing with such issues are complex as the decisions comes from the C-Suite which are often based on instinct and gut feel rather than on the reality. As employment boards and governments try to intervene by asking HRs to set fixed bands and disclose the pay and perks associated with bands across organization, most businesses are still not mature enough to do the same as they are not ready to be employee focused instead of profit focused. In times to come, this is going to be a huge challenge for the HR to deal with despite doing everything in their capacity to create a satisfactory employee experience.
2. Diversity to Inclusion
For over a decade, businesses talked about diversity hiring and it had its own benefits. However, the approach as always was top down and little thought was put into how the existing processes and work force would react to the diverse hiring policies. In 2020, HR is faced with the biggest challenge to create an inclusive environment at micro and macro levels in and around the business. Being open to new work styles and respecting cultural sensitivities will be top priority for many organizations be it small or big.
3. Change management
In a fast-paced business evolution journey, change management has critical benefits but is often ignored. It’s the responsibility of the HR to provide a platform for growth and training which employees can utilize to make themselves ready for the changes the industry is likely to undergo. This way they ensure employees do not leave an organization as it has often been seen that high performing employees feel too stuck in the same place and often change to learn newer things.
4. Leadership Management
Businesses stressing too much on revenue so that the internal teams regularly burn the midnight oil, but when it comes to rewarding employees and promoting them to leadership positions, they hire from outside. This will not go down very well come 2020 when the HR is faced with a huge challenge of retaining and upgrading the performers to take on leadership roles. Leadership management will be one of those critical strategic challenges that the HR along with the board will have to look at more keenly. Finding ways to upskill existing talent and retain them is key to a successful leadership management strategy.
5. Measuring HR Effectiveness
The focus on effectiveness and not just efficiency is not just an operations issue but also a critical HR issue. Without the right tools to measure HR effectiveness, all improvement plans fall flat in the face. Come 2020 and the focus will shift to measuring HRs output as a strategic partner and not merely and administrative function, and the irony of the situation is HR itself will have to arrive at the right tools and techniques to measure that output.
For a quick industry perspective, let us evaluate some key numbers and stats about human capital management applicable across globe. It’s important to know these as there are multiple factors that impact the human capital management industry.
1. According to Ceridian, more than a third of workers are actively searching for a new job.
2. 61% of full-time workers who changed jobs in the past two years said that a 9% pay boost could persuade them to quit their job, while 30% said being underpaid would probably cause them to look for another job – Ajilon.
3. 29% of full-time workers who changed jobs in the past two years said a bad boss could drive them out – Ajilon.
4. 89% of employers think employees leave because of money, when only 12% actually do - O.C. Tanner.
5. Top reasons workers left a job were not feeling valued, not being paid enough, and inadequate opportunities for advancement-Reflektive.
If you would like to understand how a business and HR can retain top talent and improve employee satisfaction, read our blog on the top 2020 Trends in The Global Human Capital Management Market. Hope you enjoyed reading this. Let us know on firstname.lastname@example.org.