The notion that HR needs to grow capabilities has been kicking around the C-suite and the back office for quite some time. HR as we know it has been challenged in keeping up with business disruptions, especially those associated with technology, and the growth patterns of its organizational counterparts. This does not mean that HR has been lazy; in reality, practitioners and leaders are so busy looking after the workforce that they can lose sight of their own development. Deloitte’s Global Human Capital Trends reports for the past few years validate the not-so-shocking truth that HR team capabilities are “just ok.” At the same time, our High-Impact HR and High-Impact Talent Acquisition research has identified that robust, explicit HR capability development plans are a leading practice of high-performing organizations. These studies also identified which capabilities lead to better business- and workforce-related outcomes and the gap in capabilities between high- and low-performing HR organizations (see figure below). From managing collaboration to influencing others, the message is clear: today’s HR team has to develop new capabilities and ways of working that enable it to deliver the types of outcomes and innovation needed to be competitive in the future of work.
Source: Bersin, Deloitte Consulting LLP, 2018.
Action is long overdue
Today’s workforce has high expectations of HR and little patience for procrastination. With that in mind, HR teams should stop thinking and planning—and start doing. HR must take action to recognize and remedy the operational deficiencies stemming from out-of-date capabilities—and the mindsets behind them—that have hindered its growth, affected perceptions, and prevented it from making a greater impact.
Improve current capabilities
According to our High-Impact HR research, even the highest-performing HR teams agree there is room to improve core capabilities such as managing change, organizational design, leveraging the right technology, and people analytics. This need spans across the HR suite. For example, many talent acquisition (TA) functions are slow to adopt—or even experiment with—advanced TA technologies such as cognitive tools and artificial intelligence (AI) to meet organizational needs. And yet experimentation with HR technologies and offerings is another differentiator of High-Impact HR organizations (see Figure 2). In addition, according to our recently published High-Impact Talent Acquisition research, those organizations willing to try new tools have measurable improvements in terms of larger candidate pools and a reduction in time to fill a position. With these types of gains within reach, we wonder why more companies have not yet prioritized capability development across their HR team (see figure below).
Source: Bersin, Deloitte Consulting LLP, 2017.
If these results are not influencing change, what next?
Don’t just automate—innovate!
New technologies can bring new and upgraded capabilities to HR. The key to harnessing the power of new HR technologies is in using them to redefine how HR work is done and to integrate these new ways of working into the daily activities of the workforce. This means going beyond automating current capabilities with HR technology or even expanding these capabilities. It also means developing new capabilities and the mindsets behind them. In other words, HR should use its technology to experiment and innovate to find new ways of delivering its services in the organization.
What about all that data?
One benefit to new HR technology, including platforms and applications, is the generation of workforce-related data from sources and in volumes previously out of reach. Data is only one part of the equation, however. HR needs to do something with the data in order to have an impact. Many of us know horror stories about extensive and expensive employee engagement surveys that yield valuable data, only to have that data languish in endless cycles of discussions and planning. The worst thing is to collect data and do nothing with the insights it can reveal. HR needs to be agile with its capabilities and use data to measure outcomes, not just activities.
The time is now . . .
Human resources is at an inflection point. The pace of change and the future of work are converging with the need to reimagine HR as a whole. HR teams will become uncomfortable as they try on new skills, make a few mistakes, and discover the true meaning of agility. With pressure coming from competitors, customers, and, importantly, talent, organizations need to take charge today and start building an HR team that can grow and scale and help drive measurable impact for the future.
 (1) 2017 Deloitte Global Human Capital Trends: Rewriting the rules for the digital age, Deloitte Consulting LLP and Deloitte University Press, 2017, https://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html; (2) Global Human Capital Trends 2016: The new organization—Different by design, Deloitte Consulting LLP and Deloitte University Press, 2016, http://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/gx-dup-global-human-capital-trends-2016.pdf; and (3) Global Human Capital Trends 2015: Leading in the new world of work, Deloitte Consulting LLP and Deloitte University Press, 2015, https://www2.deloitte.com/au/en/pages/human-capital/articles/global-human-capital-trends-2015-leading-new-world-work.html.
 2017 Deloitte Global Human Capital Trends: Rewriting the rules for the digital age, Deloitte Consulting LLP and Deloitte University Press, 2017, https://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html.
 High-Impact Talent Acquisition, Bersin, Deloitte Consulting LLP / Robin Erickson, PhD, and Denise Moulton, 2018.
 Predictions for 2017: Everything Is Becoming Digital, Bersin, Deloitte Consulting LLP / Josh Bersin, 2016.
 Becoming Digital: Ecosystems, Platforms, and HR, Bersin, Deloitte Consulting LLP / Jeff Mike and Madhura Chakrabarti, PhD, 2017.
 High-Impact Learning Organization: Maturity Model and Top Findings, Bersin, Deloitte Consulting LLP / Dani Johnson, 2017.