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:
Flow
HR Pathfinders enable the strategic value they generate to flow throughout the organization, by integrating closely with the wider business and the C-suite.
Digital
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.
Analytics
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.
Talent
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.
Purpose
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.
Wellbeing
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.
The future of HR: From flux to flow
How Pathfinders are grappling with the current challenges faced by the function and are moving towards 2025 with purpose
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What is a HR pathfinder?
Pathfinders were first identified in our 2020 research, in which we found around 10 percent of organizations leading their peers on adding strategic value; and integrating the HR function into the wider business. In this year’s research, we have identified a number of HR functions that are preparing for the future by taking strategy to the next level; integrating digital technology and relational analytics; building talent marketplaces; and putting purpose and wellbeing first. We know these are the topics on the minds of HR leaders across the globe; but only a few HR functions — Pathfinders — are truly setting the example and navigating the course.
HR in flow:
Pathfinder HR functions find their own north star – their own flow. They have not necessarily cracked all the challenges – but they have confidence and momentum, even in the face of uncertainty.
Careers in flow:
Pathfinders prioritize the total workforce agenda — focusing on all types of workers. They look to ensure that as many people as possible can find a career flow, even amid the fragmentation of work into skills and tasks. This demands a more person-centered approach to how skills and capabilities are matched to the tasks that need doing.
People in flow:
The ‘flow state’ is what happens to employees when their capabilities are well matched to the tasks they are being asked to do. They have the time to give those tasks their full attention, without distractions and free from friction due to poor processes and technology. This places a premium on providing ‘learning in the flow of work.
