2015 – why HR is leading the race for change

A look to the year ahead and what’s to come

Economic growth, changes in demographics, a growing skills shortage, and Millennials entering and managing the workforce – all of these factors have been creating big change for HR departments over the course of 2014, and guess what? The imperative to recognize these changes is going to become more urgent in 2015.

The major changes in the HR landscape have created demand for innovation HR technology, not to mention competition amongst vendors.

Last week’s article from Diginomica quotes John O’Brien, research director for business process services at analyst group, TechMarketView, saying: “It’s about HR becoming more important as a business enabler…replacing their old HR systems, their old systems of record and replacing them with systems of engagement.”

We agree with John in that it’s a good way of summarizing the fundamental change sweeping through traditional HR technology. At Sage People we think this will fuel several key HR themes throughout 2015:

1. HR system of use to HR system of engagement – This is going to be a key shift that we are going to see in this coming year – no more will HR systems be administrative systems of record, they will be central to the workplace, the workforce, workforce intelligence, the company brand, and company communications. HR is going to be at the heart of change and business growth, with HR professionals recognizing that technology can support talent acquisition and management and improve analytics to help them contribute to the business as never before. The changes in technology are going to have a far wider impact than just improving the processes of the team itself.

2. Analytics in talent management will be key for HR to make a real difference across the business and to impact business growth. Being able to predict sophisticated workforce and talent acquisition trends and statistics, and to perform valuable analysis across the business will mean HR takes on a strategic rather than a support function. On this topic, O’Brien says: “I think it’s early days. It’s very piecemeal and companies are using basic data inputs such as absenteeism numbers or which training module people have been on, but they are not able to join those together.” There is a lot of room for growth here and HR technology will need investment to do this. The best way to get boardroom recognition will be for the HR leaders to present the management data to support their requirements. This will inevitably require some change in thinking from what we have seen traditionally.

3. Emergence of the Modern Workforce – with 13% of the US workforce being managed by Millennials already (according to Payscale.com), HR teams will need to shift to support an entirely new type of employee. That number is expected to grow in 2015 as Millennials become the largest percentage of the workforce for the very first time. Forbes predicts that the problem with these new managers will be their lack of readiness for the positions. In addition, with an increasingly contingent workforce, companies will need to adapt their management processes, offering self-service technologies to reduce the mundane administration while increasing HR’s knowledge to manage these shifts in teams.

In addition, with an increasingly transient workforce, (86% of employees are already looking for work outside their current occupations and nearly one third of employers expert workers to be on the job hunt), HR will have to learn new skills to attract new employees and compete in the war on talent. With the workforce using new technologies such as social media to look outside of an organization, HR will have to compete using new technologies themselves. Keeping the employees updated via a HR system of engagement will be fundamental to this shift. As B2C summarizes: “Generational differences are no excuse. Build motivation by embracing technology.”

What is common to all of the predictions for 2015 is that HR needs investment – not the easiest commodity to come by in an economic climate that has yet to completely shake free of the recessionary doom and gloom. Nevertheless, O’Brien points out that chief executives are fully aware investing in people is the key to future success. We’re pleased to see that there’s definitely been a change in attitude.

We have an exciting year ahead. Things are really happening in the HR marketplace, and HR professionals are recognizing that a better understanding of their workforce and knowing how to exploit that knowledge via a system of engagement will really help them boost the bottom line.

So with new systems, new people, new analysis and new workforce engagement practices on the horizon, 2015 should be a fun year ahead for HR teams. From Sage People if we would offer one piece of advice, it would be to think of user engagement and ease of use to drive true system value. Going forward, you will see an entirely different reaction and engagement level with your workforce throughout the years to come.

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