2016 will bring dramatic changes in the world of Human Resources, Learning, Talent Management, and HR technology. Our latest report, Bersin by Deloitte Predictions for 2016, discusses ten predictions for the year ahead.
As a backdrop, let me note the headlines released at the World Economic Forum in Davos. The theme this year is the “Fourth Industrial Revolution,” focusing on the way digital technologies have radically impacted our lives, our societies, and our experiences at work. These changes, which impact organizations in every country, are coupled with a workforce which is increasingly diverse (in gender, age, culture, and nationality), demanding, and mobile. The result: the way we manage, lead, collaborate, and organize ourselves is undergoing radical change.
Adding to these changes are a tremendous number of innovative new technologies, tools, and systems for HR. The HR technology industry received more than $2 billion in investment capital in 2015 (CB Insights research), fueling a dizzying number of new tools for recruitment, performance management, learning, wellness, analytics, feedback, and employee engagement. All this technology will revitalize and change HR in many ways, forcing us to be vigilant and aware of new ways to get things done.
I encourage you to read the report in detail, but meanwhile here is an overview:
1. Digital HR arrives, patterned after the digital world.
The first topic to discuss is the brave new world we now call Digital HR. Unlike ever before in my career (I have been working since before the days of the PC), technology change is everywhere, driven by mobile devices, sensors, location awareness, and soon wearables. We spend hours a day interacting with digital apps, we are monitored closely by digital devices, and we are influenced by suggestions, nudges, and recommendations driven by analytics and behavioral economics.
This new digital life (and our digital workplace) demands a refresh in our thinking about HR: the way we design programs, the tools we use, and how we roll out and communicate solutions.
I had one of the leading providers of digital employee communication solutions in my office this week and the company told me that their one-minute, fast, animated videos have become the most popular and viral way companies communicate new benefits programs, wellness programs, and other employee benefits.
A major retailer told me their new curated video learning system, which lets employees recommend content to others, has generated 7 times as much activity as their traditional LMS in the first six months. These are only two examples of brand new, totally different, digital HR experiences which have enormous impact on the workforce.
We will be writing much more on this topic in the year ahead, but let me simply say that Digital HR requires fluency with mobile apps, design thinking, video, behavioral economics, and the use of embedded analytics. We have to think about HR applications as "platforms" and not "systems or programs" – and we have to measure success by the rate of adoption, not through massive change management programs. If your new program is hard to use or doesn't become popular quickly, you better go back to the drawing board.
2. Replacement of dated HR technology will accelerate.
The tremendous shift away from traditional licensed HR software toward modern, cloud-based systems will accelerate. Today there are over 150 million employees using cloud-based HR systems around the world (just by adding up the users of the top HR and talent management software providers) and this number will rapidly grow in the year ahead. As HR apps move to mobile devices, I expect the shift to move to mobile platforms next.
Thanks to the investment capital entering the space, you can buy easy to use, cloud-based systems for payroll and core HRMS, performance and talent management, online learning, employee engagement, wellness, and employee communications. External recruitment and job posting providers like LinkedIn, Indeed, Glassdoor, Careerbuilder, and others can spread and expand your recruitment like never before. These cloud-based systems, which have now been on the market for 5-7 years, are now mature, trusted, and enterprise class.
But more importantly, they are bringing some amazing new technology and functionality to market.
3. Talent management (and the platforms we use to deliver it) will reinvent itself.
While the concepts of talent management are now about ten years old (we published our first talent management framework in 2006), companies are now completely rethinking the way we manage people. Careers are more dynamic, young people are asking to be promoted into leadership much faster, and the worlds of recruitment, performance management, and training are now driven by the employee. Just as the talent management software market exploded in the early 2000s (then to be largely consolidated by ERP companies), new innovative vendors are now disrupting the market once again.
I wont list the vendors here (many are included in the report), but they fall into many categories:
- Next generation performance management and feedback tools
- New employee recognition and sharing tools
- New tools for employee feedback, pulse surveys, and real time anonymous feedback
- Tools to help manage wellness, mindfulness, physical activity
- Tools for goal management and goal transparency
- Tools for integrated team management, goals, document, and communications sharing
- Tools for onboarding, knowledge sharing, video learning, content curation
- New video learning platforms filled with expert content and tools for video creation and sharing
- Analytics tools to understand candidate quality, retention models, and other employee trends
- Mobile apps for time and attendance management, video recruiting, employee check-in and location management.
When you look at these tools and vendors, you see one common thread: they are focused on helping companies improve the "employee experience" in today's digital work environment. They aren't necessarily trying to further automate traditional practices – that work is done. They are all designed to facilitate the new way companies work – connected, moving fast, collaborating, and sharing feedback and information.
These new vendors are building the new world of talent management (which I call "people management"), and some of these companies are likely to disrupt the big players.
4. Performance management reinvention will further catch fire around the world.
Everywhere I go, from India to China to London, New York and Silicon Valley, I hear people tell me they are totally reinventing the process of performance management. As I describe in the report, the big change here is not doing away with ratings or changing the way we assess people, but rather a completely new way to think about management itself, and the role managers play. This is a profound change in thinking, forcing us to rethink our culture, rewards, the role of managers, and how we direct and align people in the organization. Companies today are turning into “networks of teams” so many of the traditional management practices we developed over the last 20 years are open to debate. Read more in the report, I promise you this topic will get hotter all year.
We recently had the opportunity to host GE as they described their new approach to performance management. GE, which is rebranding itself as the "leading digital industrial enterprise," has decided that simplicity, focus, and development is core to their new performance management process. The company has radically simplified its process, is experimenting with mobile apps, and is rewriting the book on how to drive a high-performance meritocracy.
5. Engagement, culture, and feedback will become CEO-level topics.
What started as a small idea (the concept of the “always on engagement survey”) has now become mainstream, as companies in all industries realize that they must compete and operate based on culture. If you don’t know what your culture is and you’re not watching it on a daily basis, you can’t possibly curate and improve it. So the world of pulse surveys, always-on feedback tools, anonymous suggestion systems, and corporate “Like Buttons” is upon us. One of our clients now has a red/yellow/green button people press at the end of their shift, telling management how well their day went every day. We in HR have to take this one on and build systems and frameworks to harness all this feedback so executives can make informed decisions on a regular basis.
6. Global leadership development will change.
We are doing a lot of research on this topic right now, and my conclusion is that the current models we use are broken. Books like Leadership BS and The End of Leadership tell a story: we simply are not building leadership fast enough, early enough, or with enough of an open mind. As I describe in the report, it’s time to accelerate people into leadership earlier in their careers, put a greater focus on mentoring (leveraging the boomers who aren’t retiring yet), and create new models and reward systems for talent mobility. If you haven't taken a fresh look at your company’s leadership development strategy (and programs), this is the year to do it. It’s still a top business issue and many new ideas and approaches are now entering the market.
7. Corporate learning will go through a revolution.
I haven't seen this much disruption in corporate learning since I started as an analyst back in the early 2000s. Employees are now in charge, video learning is everywhere, and hundreds of new learning tools and platforms are entering the market. The L&D profession and function has fallen behind, and after three years of double-digit growth, it’s time for L&D to focus on digital transformation, learning experience design, and open peer to peer learning like never before. The report gives more detail, but let me simply say that in today’s economy, where income inequality remains a top political issue, “The Learning curve is the Earning Curve” – so your employees and job candidates expect you to turn corporate learning into a magnificent part of your overall employee experience. Lots to do here.
8. Diversity, inclusion, and gender inequality have reached board level priority.
The topics of inclusion and diversity have been HR topics for decades, but in 2016 they will become primary in everything you do. Our new High Impact Talent Management Research shows that “building an inclusive culture” is now the #1 predictive strategy for global financial performance, bringing this topic into the focus on CEOs and senior execs. Part of the reinvention of talent management is to embed inclusion and diversity into every people practice in the company (from sourcing to recruiting to assessment to promotion) – and the political landscape has made this visible in every industry. Where I live (Silicon Valley) companies are now bending over backwards to promote programs focused on women, race, and cultural diversity – this will impact your design and thinking throughout HR so watch it grow in importance throughout the year.
9. Analytics and data-driven decision making will go mainstream.
We’ve written about analytics for almost a decade now and it has been a backwater but interesting part of HR for years. This year I see it going mainstream, with analytics teams now appearing throughout HR, analytics experts coming from other domains into HR, and innovative vendors and tools now flooding the market. I believe the “Internet of things” and the “quantified self” will converge, and we will see huge opportunities to leverage the data we have about people to understand how to improve the work environment, curate and better our culture, drive higher levels of performance, and reduce risk fraud and compliance violations. If you don’t have an analytics team in your HR organization today, you should build one – your ability to harness and understand the data about your people is becoming core to HR’s mission in 2016.
10. A reinvention of HR will take place, as a new breed of HR professional enters the stage.
Finally, in 2016, I believe we will start to see the impact of Millenial thinking on the HR profession in a bigger and bigger way. Young, innovative, creative professionals are entering senior roles in HR, and they are bringing new ideas about how to leverage digital technologies, how to use behavioral economics, how to experiment with new programs, and how to create a more flexible and humane work environment than ever before.
The new digital workplace we live in is both exciting and somewhat “hard” – it creates stress, overwhelming streams of information, and a feeling like we are never able to keep up. Today we feel like we operate in an “all you can eat information buffet” – we see lots of food, we try to eat it all, and we feel bad afterwards. I think this year is the time for more design thinking, a focus on simplicity, and a lot of effort to reorganize to help make work easier.
Finally, I am personally getting tired of reading articles that bash HR, talk about splitting up HR, and talk about why we should give HR to non-HR professionals. Those days are behind us (in most companies) and I think 2016 is a time for exciting change, innovation, and creative growth in all areas of talent.
Please read the report and send me your comments, I greatly look forward to hearing from you.