Top 10 Workplace Trends Impacting HR in 2015

Skilled talent shortages will impact business results; organisations may be dealing with up to five generations in the workforce.

It’s not uncommon to see many articles predicting the top business trends published at the beginning of every New Year. I always read these with interest to help my clients and colleagues stay ahead of the game and think strategically about the New Year. Most of these articles are based on surveys or on analysts’ extrapolations from patterns observed over the past few years.

While it’s hard to know which will be most impactful to your specific industry, geography or organisation, they are a fun read and a helpful way to take a step back and think strategically about the year to come. This year, I’m transitioning from playing the role of passive reader to active prognosticator.

Everything in HR touches everything else. You’ll find that these top 10 trends are highly inter-related and impact one another. HR professionals must think strategically across all these areas as they plan how to best enable business performance in 2015 and beyond. Please feel free to share your comments and we’ll see how close we get come 2016!

Global Skills Gaps Continue to Widen

For the past several years, surveys, in all regions of the world and across industries, point to an impending skills shortage. The vast majority of employers in Malaysia and Singapore report concerns that skilled talent shortages will impact business results. Likewise, half of US employers with job openings in 2014 cannot find qualified applicants.

Managing younger generations will continue to present challenges to organisations with traditional HR policies which were written years ago and are now enforced by employees belonging to an older generation.

More must be done to improve raising the level of tertiary education, improving the quality of and access to training in key skills, and facilitating talent mobility in Malaysia. Companies themselves must address the problems of culling through the ocean of available training to find the few high quality offerings and work with providers to make them relevant to the current context.

New ways of learning through collaboration, special projects, and on the job experiences will become more popular as Malaysian HR professionals learn how to “structure” these unstructured opportunities for skills acquisition.

Increased Importance of Succession Planning

While the idea of succession planning has been around for years, the vast majority of organisations still have weak or non-existent programmes. 85 percent of business and HR leaders in a recent Deloitte survey noted that leadership succession is an urgent or very important issue.

Likewise, less than 15 percent of respondents to a global Right Management / Manpower survey believe their leadership talent are actually ready to lead. Despite all the talk and activity around talent management and leadership development, there has been little progress.

Initiatives are fragmented, misaligned and confused. These problems are due to HR’s chasing the newest trend and overreliance on external vendors with different models and agendas. While these issues won’t be solved overnight, we expect HR leaders to take a greater role in orchestrating succession planning efforts across various initiatives.

Increased Importance of Honesty in Leadership

Starbuck’s CEO Howard Schultz famously stated: “the currency of leadership is transparency.” This feeling is especially true of Gen Y and Gen Z workers – with a majority saying that honesty is the most important trait of a good leader.

Employees of all generations desire to work for honest leaders and transparent companies. With the advent of social media and sophisticated NGOs (e.g., Transparency International), organisations must become more honest or face reprisals in the media if found out.

Continued Decline of “Traditional” Career Paths

The number of freelance workers and part-time professional workers will continue to explode in 2015. As employees become disenfranchised with corporate bureaucracy, demanding work hours and limited rewards, they will increasingly turn to freelance work.

Even more experienced workers in senior leadership roles are seeing “greener pastures” outside of large organisations as consultants, coaches, or trainers. Companies looking to reduce full-time headcount and staff costs are also turning to freelancers for short term access to needed skills. Technology is making freelance work easier. Strong networks among freelancers allow them to quickly come together to collaborate on large projects while also handling smaller project independently.

Another Generation Joins the Workforce

While many companies are still struggling to understand and keep Gen Y employees engaged, members of Gen Z are now starting to work. Gen Z’s are defined as those born between 1994 and 2010. The oldest Gen Z’s are completing their education and beginning their careers.

As Gen Z is entering the workforce, more and more Gen Y’s are taking on management and leadership roles. Organisations may be dealing with up to five generations in the workforce with differing perspectives, assumptions and skills.

Managing younger generations will continue to present challenges to organisations with traditional HR policies which were written years ago and are now enforced by employees belonging to an older generation. As generational shifts continue, expect Malaysian business to adopt more flexible HR policies, especially around attendance and remote work, to address employees’ growing concerns around work-life balance.

Starting to Address Work-Life Balance

Companies have been challenging employees to do more with less for the past several years as the global economy has struggled. Reduced boundaries between work and non-work life as a result of new technologies (e.g., wearables, social media, smarter phones) have made things even more difficult.

One Deloitte study found that over two-thirds of companies believe employees are “overwhelmed” with too many emails, communications, meetings and conference calls that are typical in our global 24-7 “always on” workplace. Contrast those demands with employees’ desires to regain work-life balance – especially among Gen Y and Gen Z.

Workers must continuously learn and adapt to new technologies – in the context of their current jobs rather than in the classroom.

Flexible work hours and remote work policies will become more commonplace – even in Malaysia – as a way to attract and retain key talent. While we hear a lot about free food, concierge services, and other perks among Silicon Valley companies, they usually aren’t a good fit for most companies. The more important and complex challenge will be for HR and business leaders to simplify the workplace by keeping teams small, communication concise, and processes efficient.

Corporate Social Responsibility Comes of Age

Today, companies are increasingly being judged by media, government regulators, and employees by what they give back to their local and global communities. More and more, CSR is becoming a business requirement for organisations who want to be seen as responsible citizens by their clients, employees, and other stakeholders.

Genuine, impactful CSR is one of the most important ways for organisations to attract and retain Gen Y and Gen Z workers. Furthermore, they will require that CSR move beyond the annual “service day and team building event” to become an important part of the corporate mission, vision and values. CSR must become a noble purpose to which employees can identify and aspire to.

Beginning to Use Big Data and HR Analytics

Big Data has been one of the most overused corporate buzzwords of 2014 and it’s certainly here to stay. Business leaders rightly expect HR analytics-based insights to match the sophistication of those in marketing, finance or operations. The advent of new tools for data collection, storage, and analysis will help HR professionals catch up to other business areas.

However, HR will be challenged to upskill on critical thinking, problem solving and analysis. The ROI of insights from other business units and case studies from companies on the cutting edge of HR analytics will bring further pressure on HR to deliver in the area of Big Data. It takes specialised software and expertise to build capability in this area. However, companies who invest now to grow their analytics will be developing a competitive advantage.

Increasing Implications of Technology on How Work is Performed

While some analysts are predicting that robots and computers will replace workers, empirical evidence tells us that isn’t the case. The impact will be drastic changes in how work is performed and the skills required for those jobs. Today’s workforce is increasingly dependent on technology (how productive are you when your computer is down?).

Likely, jobs today are much more complex because the most simplistic activities have been taken over by machines. New advances in artificial intelligence are continuing to press the boundaries of what computers can do. Now computers can drives cars, understand speech and translate languages. Workers must continuously learn and adapt to new technologies – in the context of their current jobs rather than in the classroom. New entrants into the workforce must bring a strong foundation of computer skills to be competitive.

Retention Challenges Continue

Employees today are undergoing a continuous job search – this trend is even more acute in South East Asia. Workers with less than three months tenure are already looking for the next role and companies are willing to hire candidates with a history of “job hopping.”

Technology is making it easier for recruiters to identify and poach talent. Furthermore, frequent job transitions have become more commonplace as nearly one-third of employers expect workers to job hop. While many companies have surrendered and resigned themselves to high turnover, they sacrifice performance as well. Research and practice shows over and over that companies that cannot retain staff have lower customer service, are less innovative, produce less and are, ultimately, less profitable.

Measuring and addressing employee engagement will become more important as companies address retention. Those who already measure engagement will get more serious about coordinating their HR and business practices to improve engagement and drive measureable results. Companies who have not started to track at engagement will begin to survey employees and take steps towards addressing concerns.

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