Within the last few years, the HR industry has seen an unprecedented amount of change: the increased push towards a more diverse workforce, the growth and adoption of artificial intelligence which has impacted how HR professionals get work done, and most recently, the ripple effects of a global pandemic.
It begs the question: What is the future of the HR industry? This blog will outline the HR trends that will continue to shape the industry.
Trends we will look at:
Technology adoption is one of the most important aspects HR leaders are pushing towards to improve talent acquisition, improve the employee experience, and help effectively scale operations
Leveraging AI-based HR processes across areas such as talent acquisition, workforce analytics, benefits, and employee support is growing in popularity
That said, many business have yet to adopt AI for HR with one study estimating that only 17% of businesses have done so, so far, but that is expected to grow to 30% by next year
Virtual work has been proven to have positive effects on employees. In a study by McKinsey, employees who work remotely see greater efficiency and are more positive about their work.
69% of HR leaders believe the pandemic will permanently change the nature of work, leading to a constantly evolving employee experience.
Top 4 Trends for 2022
1. AI is here to stay
Using artificial intelligence (AI) and robotic process automation (RPA) for HR functions has definitely increased. Given AI's ever growing capabilities, the need for businesses to digitally transform themselves, and the fact that the technology's benefits outweigh the financial costs with minimal monthly investment and relatively quick payback periods has made AI the next best step for your HR department (from days to a year, pending your company size).
HR leaders are leveraging AI to make drastic changes across their department, from areas like talent acquisition, onboarding, and workforce analytics to health benefits and employee support. One such AI tech vendor, Quick Scout, is leveraging pre-trained AI and automation to improve the employee experience, which has been a major focus highlighted by several thought leaders, such as Josh Bersin (see trend #3 below). Not only do they help fast growing companies and mature global companies scale support across HR, IT, and other support domains, but their pre-trained AI is helping them get started quicker, easier, and cheaper, all while providing valuable support analytics so HR leaders can quickly address support gaps.
A study from McKinsey validates how AI will drastically change business, no matter the industry: “AI could potentially deliver additional economic output of around $13 trillion by 2030, boosting global GDP by about 1.2 percent a year.''
That said, although AI for HR has gained traction, it has room to grow with only 17% of organizations leveraging AI-based processes in their HR practice today, which is expected to grow to 30% by next year, according to Gartner.
But given AI's maturing capabilities, expanded applications, clear business case, and continued adoption by companies of all sizes, AI is in fact here to stay.
2. Invetment in HR technology
According to a research summary by Zippia, the investment in HR technology is exploding. Here are some numbers: 60% of HR departments are expected to invest in predictive analysis, 53% in process automation, and 47% in artificial intelligence in 2021 and beyond.
The enormous demand by HR leaders is driving larger investment by venture capital firms trying to take advantage of this growth opportunity. A recent article by Crunchbase shows that VC funding has reached a 5-year high at $3.6B and 260 deals in 2021, so far, with several months left in the year:
“Hyper-automation provides tremendous opportunity to improve HR efficiency and reliability, particularly across transactions and workflows that are subject to errors, bottlenecks and delays.” - Gartner.
3. Employee experience (EX) as a major focus
Due to the pandemic, the employee experience has taken on new shape and meaning. The acknowledgement and prioritization of your employees' goals, mindset, and ambitions has to be at an all-time high to ensure employee satisfaction and efficiency.
A recent Gartner study showed that employee experience was a key initiative for HR leaders in 2019 - and it's clear this will continue to be important as we head into 2022. The trend is undeniable. Businesses have realized how beneficial happy workers can be when they commit themselves fully to achieving company goals.
According to Josh Bersin, a thought leader within the HR transformationspace, the employee experience will only become more critical to mainstream businesses and not just those top-performers:
"Every HR leader, vendor, and consultant is now focused on this [employee experience] and the topic is accelerating this year," - Josh Bersin, HR Predictions for 2022
A second study from PwC in 2020 confirms the importance of the employee experience driving HR investment decisions, being a top 3 area to improve with HR technology:
Further, according to a McKinsey report, employee engagement, well-being, and effectiveness are driven by a set of the following themes:
Stable work experience - Leads to an +53.3% increase in well-being.
Trusting relationships - Leads to an +47.6% increase in engagement.
Social cohesion and inclusion - Leads to an +22.3% increase in work effectiveness.
All that said, if you haven't done so already, considering how to define, measure, and improve your employees' experience could be an important business step to retention, satisfaction, and long-term business performance.
4. Virtual/hybrid work as the new normal
It's no surprise that Covid-19 has changed the way we work.
And the change may be permanent, since major companies like Facebook, Shopify, and Slack have fully embraced remote work. The potential permanence of this trend is further supported by a 2020 Salesforce study, which shows that 69% of study participants agreed that “the pandemic will permanently change the nature of work.”
Others have fully embraced this practice as well, but with a twist: Twitter and Microsoft announced that every employee who doesn't need to be in the office (such as to maintain servers) will be able to work from home.
Another survey in June found that working from home full time would be the most appealing option for 37% of respondents, with another 32% saying a split between home and the office would be their choice (aka, a hybrid approach).
Regardless of the survey, it's clear that some form of remote work - whether fully remote or partially remote - will not be going away any time soon, given company investments in supporting a remote workforce, employee desires, and the minimal impact on overall business performance.
So, if you're an employee and you haven't upgraded your home office already with a large monitor and lush green plants, now may be a good time. If you're an HR leader, it'll be a good practice to clarify which working options you'll provide and ensure each is properly supported.
The HR landscape is ever changing and new trends will continue to emerge. But, many core themes will remain: the importance of the employee experience, the further application of AI, more remote working employees, and continual innovation in HR tech, to name a few.
What are other key 2022 HR trends? Which trend do you think most managers need to get used to in the coming years? Engage with us in the comments!
And, of course, if you liked the content and want to stay updated on anything related to HR, support, AI, and automation, then subscribe to our newsletter!