In the past year, HR departments were nearly twice as likely to grow rather than shrink, according to a survey of HR professionals in several countries.
There are a variety of possible reasons for the growth, such as a stronger economy, changing technologies or the new world of work. It could also be because recruitment and learning and development (L&D) are keeping HR busy as top priorities, according to the HR Talent Management and Benchmarking Report 2019 from HR.com.
Most respondents (66 per cent) said their HR department’s size remained about the same, while 22 per cent said their departments grew. Just 12 per cent said theirs shrank.
In the coming year, HR departments are three times more likely to grow than to shrink, found the survey of 629 HR professionals.
With the stronger economy, companies can afford to maintain their staff fairly well as there’s a lot of growth within organizations, said Mark Vickers, research co-ordinator and data wrangler at HR.com in St. Petersburg, Fla.
“It’s also due to the growing number of roles HR people are expected to fill these days... more is expected from HR,” he said. “(HR) used to be more administrative, and now it’s more strategic in many ways.”
“A lot of resources are being put into recruitment of people because companies are finding it really hard. It takes longer to recruit people than it used to... So companies are throwing more resources at that in order to get better people, considering how tight the labour market is right now.”
And although there has been considerable advances, HR is not nearly as automated as people may think, said Vickers.
Organizations have really started to transform in anticipation of the new world of work. And there’s going to be a predominant focus on scalability, said Lisa Sterling, chief people and culture officer at Ceridian in Minneapolis, Minn., which sponsored the survey.
“The team is going to evolve in terms of what types of skill sets and behaviours are going to be necessary to be highly successful and to be able to be much more impactful in organizations,” she said.
“I don’t think there’s going to be significant growth in terms of size; I think where you’re going to see significant growth is in terms of upskilling and kind of evolving what the persona looks like of successful HR leaders, as well as those people who are filling in under them.”
There’s a drive to look at the mix of what is in the human resources department, instead of just the traditional roles of recruitment and selection, L&D and compensation, according to Rodney Miller, president and CEO of CPHR Alberta in Calgary.
“Even if HR departments tend to stay the same size, the ranks of who is in those departments is going to differ, and we’re going to see more opportunity for HR analysts (and) data scientists that are going to be able to tap into information that this department has... and use that data in terms of how they’re going to meet challenges in the future.”
Talent analytics challenges
HR has yet to master talent analytics, according to the report.
Just 25 per cent of respondents regularly use data to describe and assess basic HR performance, and only 16 per cent use data to predict talent outcomes.
Part of the issue is the skill sets aren’t very strong in this area, said Vickers.
“People often get into HR because they’re people-focused rather than number-focused. And so sometimes it’s a matter of internal skill sets and internal comfort with analytics. Sometimes, the tools are hard to use, like most of the information systems — you can get some analytics out of it, but they’re not always incredibly user-friendly.”
Having said that, it’s an area that a lot of people are struggling with, he said.
“If you really want to do sophisticated predictive analytics, you need to get into machine learning and some of those things. And this tends to be over the head of a lot of people — not just HR.”
However, HR should be doing much better than it is at the basics, such as time-to-hire or completion of training, according to Vickers.
“They know they’re not good at it, and they want to be better at it. It’s a fairly high priority, but most companies just haven’t completely nailed this yet.”
Many human resources departments lack the sophistication to understand what the data is telling them, and they need a robust human capital management (HCM) solution to present the numbers, said Sterling.
Others may have the data but aren’t sure what to do with it, she said.
“The data is not prescriptive in nature. And so we spin our wheels looking at this and saying, ‘OK, what’s this telling us?’ The next question always is ‘OK, so what do we do with this?’ We’ve got to get better at our sophistication (with) our technology and the ability to become more predictive and prescriptive… You’ve got to bring people into the organization who have a strong analytical background who can take data and make sense of it but, most importantly, translate that into people and business outcomes that are actionable,” said Sterling.
Ceridian, for example, looks at regrettable versus non-regrettable turnover, she said.
“We’ve now started to have indicators that we’ve focused on, that allow us to see in advance when there might be attrition issues. So, as we know, as engagement goes down and billable hours go up, we start to have some issues that we need to look at. By bringing all of that data together, we now are able to be more proactive in the types of decisions that we’re making.”
The benefits of data analytics within the HR space are not yet known, nor is the framework in terms of dealing with what’s necessary to measure the HR space, said Miller.
“That’s an opportunity for continued growth and study,” he said.
“Ideally, if you can get to the point where you can look at HR behaviour and be able to use predictive analytics, or you look at business models and show change, and how those are incorporated within an organization to predict the kind of skill sets you’re going to need, that gives HR and the organization an extraordinary amount of information to build a plan for (the) future.”
For the second straight year, human resources practitioners identified L&D and talent recruitment as their top areas of focus. They were tied for first place at 38 per cent each, found the survey.
With the rapid pace of movement in organizations and skill sets quickly becoming outdated due to technology’s advancement, it’s a necessity for employers to provide opportunities for individuals to receive educational elements, said Sterling.
“It’s becoming kind of a non-starter in some organizations. Like, if there’s not a good strong growth and learning and development experience in organizations, employees are making their decisions with their feet, so to speak.”
There’s also a heightened awareness around talent acquisition, she said.
“We’ve looked at augmenting our overall recruiting process and taking out some of the — what I would consider — high-touch elements upfront. For instance, using things like chatbots to do some of the upfront screening to move a person through the cycle faster.”
That approach has been very successful, said Sterling.
“We’ve actually shortened our time to fill pretty significantly and our overall… candidates’ NPS or net promoter score has continued to rise because of those types of things. We’re looking at augmenting the experiences because we know we’re competing against the Amazons, Facebooks, the Googles for the same talent. We’ve got to get those people in and through the process effectively — yet much more efficiently than ever before.”
It’s more difficult to recruit people than it used to be — and it’s also expensive, said Vickers.
“It’s difficult because people are already employed, so you have to go out there, and you have to find the passive jobseekers rather than the active jobseekers, especially if you want highly skilled people because most of them are already employed.”
Because of that, employers are spending more dollars and time on L&D, including the various systems available, he said.
“You need people that understand these systems and you also need people to manage those systems and to figure out which ones are right for the company. You have to build a whole learning architecture rather than just putting together an LMS (learning management system) and hoping people will learn via the e-learning or whatever.”
There’s a lot going on around reskilling, said Miller.
“Rather than going out to the market and finding hires, it all ties back into succession planning and development of leadership,” he said. “If you can reskill people to take on those new opportunities, there’s a huge amount of evidence that suggests it improves engagement, which obviously improves productivity, which will also improve the succession planning.”
And when a company hires people internally, it’s got that automatic organizational knowledge, said Miller.
“There’s also a productivity argument there as well — if you can find people internally and ensure that they’re skilled to take on the role, they can be more productive and more effective for the organization.”
However, most respondents continue to fill vacancies from outside their organization as two-thirds find external candidates to replace up to 80 per cent of their open positions.
Just 10 per cent fill most openings using workers already on the corporate payroll.
As a result, HR is in a tough spot, said Vickers.
“It’s hard to take somebody out of a position that’s doing well,” he said. “Managers don’t want HR to come in and poach their better people and stick them somewhere else.”
But there’s some evidence to indicate companies are trying to get better at figuring out where their internal skill sets are, said Vickers.
“But, of course, you end up in the same conundrum, right?”
“Because if you move somebody out of a current position to fill another internal position, somebody’s got to fill that other position. It ends up being a cascade effect,” he said.
However, 35 per cent of respondents said lack of advancement was the primary reason for employee departures, compared to 30 per cent who cited inadequate compensation.
It’s a hard nut to crack, especially with companies fairly flat these days, operating without huge hierarchies, said Vickers.
“There aren’t as many levels within an organization; sometimes it’s hard to give people promotions, even when they deserve it.”
The other factor is that companies are not very good at career advancement programs, he said.
“They’re not very systematic at this; they tend to be a little more ad hoc at this than they should be.”
Employers have to get out of the mindset that career advancement means going up the ladder or lattice, said Sterling.
“I look at career growth — it’s all about the ability to expand my contributions, to expand my span of control, to expand my visibility in the organization. And that doesn’t mean through a bigger title or through more significant leadership opportunities,” she said.
“The sooner that organizations can grab onto that philosophy and build a career framework infrastructure that supports that, the greater that they’re going to have retention… not just with the millennial generation, but other generations as well because people do want to move more quickly and more frequently into other roles, and so we’ve got to look outside of the traditional career frameworks and paths.”
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