At the beginning there were company rules. And the rules needed to be enforced. And Human Resources (HR) was born to do the dirty job of administrating those rules. HR was synonym of rules. And not too many people liked it. That’s how it was.
But HR evolved. It actually has always been in constant evolution, sometimes slower, sometimes faster. From its inception as a simple manager and administrator of the rules, to performing transactional low-level activities, to then assuming a more strategic role, HR has changed over the past 100 years. And HR will continue to change, especially in the hypercompetitive and revolutionary times we are living in. But that change will actually happen faster than it ever did. Too many things going on: technology, several generations working side by side, skilled workforce shortages, redesign of compensation and benefits. All of that creates a lot of pressure, which also makes the work more interesting. In short, the future of HR is simply fantastic. And there’s a lot to be done.
The Future of Human Resources
What’s coming in the future of HR it’s by far more interesting than all the transformations that happened over the past 100 years.
Today, HR is a synonym of a strategic partner, talent management and people’s operations. But in the future HR will be more than just “strategic” for any business. It will be a pioneer in breaking the rules that it was once responsible for guarding. You read that right. HR won’t be a rule enforcer any longer, simply because the rules that make sense today will be obsolete tomorrow. So, HR will assume a groundbreaking role in any company. It will be cornerstone in creating the organizations of the future. To do that, HR will help redefine and redesign entire organizations to become more flexible and agile. In the past, HR needed to maintain the status quo. In the future, HR will have to ensure that organizations not only adapt to change, but that they create change.
Successful disruptors are not followers, but leaders. This is true for companies and people. And the HR of the future will be essential in polishing the disruptive competitive edge. Ultimately, HR will be one of the fundamental protagonists in creating the workplace of the future. Am I too naïve about the role of HR in the future? I don’t think so. This is why.
Why HR is so important?
Human Resources has a unique possibility that only a few other lucky functions or people have within a company: it sees the entire business and corporate operation from above. Not as an omnipresent God, but because its intrinsic current function is precisely to know what’s going on. Therefore, not only can HR understand how the business operates. More importantly, it has the exceptional view of the human dynamics in the workplace.
The sort of information that HR can mine from watching human interactions and operations is a Holy Grail. It allows thrusting productivity and performance (when the information is used appropriately). Such information provides the most valuable inputs for any organization to make the best possible decisions. Decisions that are critical to stay relevant, sustainable and profitable. The future of HR is in mining data, analyzing it, driving decisions. At the same time, HR will be using more technology to increase productivity and performance, and customer satisfaction.
The challenges to get there
But, concretely, how exactly is HR going to look in the future? What’s going to be its role? How will it leverage that overlook capability over the business operations? These questions are fundamental in understanding the opportunities and the challenges ahead for all HR professionals. Let’s begin by defining some of the most important challenges for HR today (and in the near future):
– Finding, recruiting and retaining the best talent in the job market: take into account that in the next few years the skilled workforce shortage will increase. In consequence, this particular challenge will become more severe than it is today.
– Creating the workplace culture (of the future): which means taking into account all the factors that are important across generations to stay engaged and motivated in the workplace. Keep in mind that disengagement in the workplace today is a whopping 70%. Unless there are major changes in corporate culture, this number could continue to increase. Disengaged employees have an impact in productivity. It costs around $450-$550 billion just in the US.
– Promoting more diversity, inclusion and a global integrated workforce.
– Demographic changes and redesigning benefit programs: in the next 5-10 years, about five generations (Boomers I and II, generation X, Millennials, Generation Y and Z) will be working side by side. For some, a sounds retirement plan is important. For others, it is the opportunity to do something cool, in a friendly, flexible and nonpoliticized environment. HR will deal with great pressures (again, my idea of HR breaking rules instead of writing them in stone will be critical here).
– Integrating technology in the HR business: many HR professionals are either scared of technology or simply don’t understand it. Well, if HR doesn’t leverage technology to do its work, it’s simply doomed to become irrelevant. HR needs to break the barriers that separate it from technology and its applications. In particular, how to use technologies for to increase productivity, performance and engagement, to build the workforce of the future, to maximize ROI on training programs and recruitment, etc.
– Integrating social physics.
In the survey “Global HR Challenges: Yesterday, Today and Tomorrow” by PricewaterhouseCoopers on behalf of the World Federation of Personnel Management Associations (WFPMA), the top 6 challenges for HR are: Change Management, Leadership Development, HR effectiveness and measurement, organizational effectiveness, compensation, staffing.
There are many challenges ahead. I said the future of HR was going to be fantastic and interesting, not easy.
Transformations for the future
How fantastic the future of HR is that a number of those challenges will be resolved by using more data, technology and innovation. It’s certainly impossible to predict the future with accuracy. But imagine what’s going to happen in the next 10 years and how HR will have this incredible role to step in and tackle most of the challenges that I described above. Let me give you two examples on how that’s going to happen:
1.Customer service will be more important than price (86% of buyers pay more for better customer experience): this will create enormous pressures on employees to become more effective and productive to deliver the highest levels of quality and value. They will have to collaborate more, learn faster, take more risks and be more proactive. In addition, there’s much more competition today (which is a good thing). HR will leverage decisions by understanding the role of human interactions in driving higher quality and performance. And it will be critical to keep any business profitable and relevant. This makes the HR work way more interesting!
2.Integration of technology: as I mentioned before, the impact of technology in Human Resources operations will be extremely powerful. In the future, people will be working alongside intelligent machines. HR will play a critical role in ensure effective relationships between robots and people. But there’s much more in technology than just machines. For example, using virtual reality for recruitment, holograms for interviews and many other.
Unfortunately, I believe that the assumptions of many HR professionals about the HR business are limiting them from opening up their minds to what’s coming. That’s precisely what’s going to make the road ahead more difficult.
The first step in solving such a problem is this: accepting that the way HR operates today is already obsolete. Only when HR professionals understand and embrace that basic premise will it be possible to begin the change and the construction of the future role of HR. The challenges and opportunities ahead are fantastic. I’m excited about the future of HR. But I’m also concerned about the pace of change. The wheels of any businesses are moving too fast to catch up and be part of the technological revolution. HR has to change and evolve even faster, or it will become a dead weight preventing the organization from realizing its full potential and remaining relevant.
A hundred years ago Human Resources was about compliance, rules, policies, unions and pension. In 3-10 years from now HR will be about generational integration, collaborative global workforce, integration of artificial intelligence and using technology to maximize productivity and performance. The future of HR is bright and fantastic. Are you excited about the future of HR? In what other areas do you think HR will pioneer? How do you think that’s going to happen? What’s preventing HR from doing it today?
Enrique Rubio is passionate about Human Resources, entrepreneurship, technology and innovation. He’s interested in the question “how to remain relevant in the time of intelligent machines”. His background in electronic engineering and HR helps him work in the fascinating intersection of technology and people.
Now Enrique is an HR Specialist at Inter-American Development Bank.