The future of HR: From flux to flow

HR is in a state of flux. Global volatility and uncertainty has driven a focus on how to steer through the next few years but increase the business value from HR. It is a journey from flux to flow.

The labor market is experiencing acute shortages of key skills, as employees go through the ‘Great Reconsideration’.

Meanwhile, boards want more from HR. They’re demanding a connected, digitally enabled and analytics-led function that can support the business’s wider aims.

Our latest research found Pathfinders – those HR functions forging a path through this changing landscape – are less concerned with what others do and say about people management.

Instead, they’re building the capabilities needed for their marketplace, and to deliver their firm’s strategy. They’re providing people insights to enable decision-making. And they’re embedding themselves into other business functions and the C-Suite, to allow the value of HR to benefit the whole company. 

As they do so, the HR Pathfinders have identified, and are focusing on, six critical priorities for the next three years:

HR Pathfinders enable the strategic value they generate to flow throughout the organization, by integrating closely with the wider business and the C-suite.

Legacy solutions and processes won’t cut it in a competitive labor market. That’s why Pathfinders have moved beyond technology implementation. They’re integrating digital to make work flow effectively and offer a seamless employee experience.

Leading HR organizations aren’t content tracking KPIs on dashboards. They answer the questions the business is asking, using data from outside the function and relational analytics techniques. As a result, they produce insights that benefit strategy, engagement, retention, and development. 

The use of Talent marketplaces to match skills to tasks is at an early stage, even in the most innovative HR functions. But the foundational importance of managing and developing skills in the enterprise is critical for the Pathfinders and will bring competitive advantage for them. 

HR Pathfinders are taking the lead on organizational purpose – by defining it, and making it real for their people. They’re embracing ESG, and ensuring that net zero flows through every part of the organization.

Leading HR functions put employee wellbeing centre-stage. They view it holistically, and bring innovative approaches to help people perform at their best.

Taking inspiration from our Pathfinders, HR leaders should consider how the approaches highlighted in our report can be adapted to their unique circumstances.