- February 20, 2023
What Will HR Look Like in 2030?
By Tamara Lytle – December 2022
The coronavirus pandemic was an ugly reminder of just how hard it is to predict and prepare for the future. Yet that doesn’t mean HR leaders shouldn’t think ahead, especially when there are some absolutes. Older workers are retiring, and the digital revolution continues. It’s not too soon to start thinking ahead to the next decade. Here are six predictions for 2030 and how to prepare for them.
1. New Generations Will Take Over
By 2030, every Baby Boomer will be 65 or older. As most of them leave the workforce, they’ll be replaced by the smaller Generation Z (those born in 1997 or later).
Boomers entered the workforce at a time of hierarchical cultures, when a job was simply about the work. Members of Generation Z, on the other hand, are crying out for their companies to match their values and speak out on issues such as the environment and diversity, equity and inclusion. That has sparked companies to take on activist roles, though this can be tricky, especially with polarizing topics.
“You won’t make everyone happy,” says Art Mazor, global human capital practice leader for Deloitte in Atlanta. But HR can help companies weigh the risks of speaking out on hot-button issues and can explain those decisions to employees.
Millennials and members of Generation Z want “to be authentically recognized at work,” Mazor says. They also want their jobs to provide a sense of purpose and belonging, flexibility, and continuous career development. They’ll change jobs if they don’t feel they’re learning enough or finding a sense of purpose at the company, he says.
But Peter Cappelli thinks companies are unlikely to prioritize employee career growth. The George W. Taylor Professor of Management and director of the Wharton Center for Human Resources at the University of Pennsylvania notes that the percentage of jobs filled from within has dropped from 90 percent in the 1980s to about 30 percent now. In addition, average tenures have declined and time spent on training workers has fallen to about half a day per year.
“I don’t see where [companies] are willing to spend the money to change that,” Cappelli says. “They’re missing an opportunity. When they end up hiring from the outside, they end up paying more in salary and performance is worse.”
The younger generations place a high priority on work/life balance, too, Mazor says. (Also, work/work balance: 43 percent of Generation Z workers and 33 percent of Millennials have side hustles or two full-time jobs, according to Deloitte.)
Amy Zimmerman, chief people officer at Relay Payments Inc. in Atlanta, sees a disconnect between Boomers who are comfortable working 10- to 12-hour days and younger workers who prefer to work fewer hours. Managers need to focus more on results with those younger workers, she says. Gone are the days of command-and-control, fear-based management.
“[Younger workers] work differently,” says Zimmerman, whose company is a payment platform for the trucking and logistics industries.
Amid the current talent shortage, Zimmerman tells recruiters to make sure their outreach efforts leave candidates wanting to work at the organization. That means, for example, pitching them on why their work at the company would matter. This approach should continue after they’re hired, with managers striving to motivate them by making the company’s mission clear.
“You’ve got to convince people why they need to do the work, and it’s not just ‘because you’re paying me to do it,’ ” Zimmerman says.
2. Digital Training Will Become a Necessity
More than half of HR professionals (53 percent) report noticing at least one basic skill or knowledge gap among applicants in the past 12 months, according to the 2022 Talent Trends Report from the SHRM Research Institute. The gap cited most frequently was basic computer skills (35 percent).
Korn Ferry predicts that by 2030, 85 million jobs around the world will go unfilled because there aren’t enough skilled workers. Growing those skills from within amounts to self-preservation for companies.
HR needs to change its recruiting and hiring practices and build digital skills among current employees, says Suneet Dua, products and technology chief revenue and growth officer at PwC.
Every department, not just IT, will need workers who are familiar with artificial intelligence, “big data” and quantum information (an intersection between computer science and the quantum mechanics of the physics world).
“HR leaders are stuck in yesterday’s world,” Dua says. Generation Z workers already are interested in lifelong learning, he adds, but all ages need to embrace it.
PwC followed its own advice five years ago in looking at the digital literacy and skills of all 55,000 of its U.S. workers. A “gamified” app asked workers whether they knew about and used alternate reality, virtual reality, big data and more, with prizes awarded for high scores. Workers then took a course to learn more and could post a badge on LinkedIn when they passed. The goal was to get everyone to score at least 250 out of 600. (The average before the training course was around 150 to 175, Dua says.) The company offered a week off for everyone in early July if the goal was met. It was. Screen Shot 2022-12-02 at 113302 AM.png
Dua says the operation helped PwC identify the most technically savvy employees. Those workers, dubbed “digital accelerators,” were asked to train others and given financial rewards for doing so.
PwC also started offering apps companywide that were developed by employees who found efficient solutions to common challenges, including tracking their hours by the state they were working in and the client they were serving, as well as how to organize dinner orders for teams working late.
“These are the things we did to get the big tanker of PwC moving into the digital world,” Dua says.
HR leaders need to know that starting small on moving employees toward digital skills is better than doing nothing.
“Some CEOs and HR leaders think they have to eat the elephant in one bite,” Dua says.
3. People Experience Departments Will Emerge
No, that’s not the HR department. It’s a new team that focuses on employees’ lived experience and their development, says Keahn Gary, a senior manager and innovation and disruption strategist at Cognizant, a global IT services and consulting firm in Los Angeles.
So why isn’t that a job for HR?
“HR, in its current state, is there to protect the company,” Gary says. “Their purview is more along the lines of ‘How do we get employment to happen?’ rather than ‘How do we get work to happen?’ ”
The current talent shortage has prompted business leaders to look more closely at employee experience, a topic that Gary feels has been shortchanged. “We’re way too focused on shareholder return,” she says. “We have to stop looking at employees as cost centers and look at them as an investment.”
HR departments, she says, have had 100 years to work on employee experience and development but have shown little inclination to focus there. And middle managers have too much on their plates to handle employee development.
A people experience department would have the staff to focus on the lived experience of workers and to make sure companies keep working on improvements for employees, says Gary, whose company has 330,000 workers globally. She compares the relationship between HR and this new department to the similar but different roles of accounting and finance within the corporate structure.
4. Teamwork Will Become the New Game Plan
Scrums, sprints and squads will be widespread as employers draw workers from all over the company and even from outside the organization to work on projects. “We’re breaking away from hierarchical ways of working and putting people into these newer constructs,” Mazor says.
The new structure means HR will need to reimagine incentive programs and performance reviews because employees may not be working for their usual supervisors. For example, Zimmerman says she moved away from annual performance reviews and now focuses on continuous feedback from whomever is supervising the employee, an approach that works better in a project-based environment.
Putting together effective project teams will be a key for company success, says Jeanne Meister, executive vice president of Executive Networks, a San Francisco-based membership organization for senior HR leaders. She expects more companies to create internal talent marketplaces to facilitate that goal.
Mazor adds that just as applicant tracking systems can help find people with the right skills for hiring, talent marketplaces can be used to find short-term help from outside and inside the organization. A manager needing a data scientist for a project, for instance, might be able to find a consultant (or an employee from a different department who has extra time) instead of hiring a full-time employee.
Such a talent marketplace offers two benefits, Meister says: Workers will be able to see what projects are coming up that might help their career growth, and companies will save money and avoid headaches by improving retention. “Career development is going to be a requirement to get and keep workers, especially Generation Z,” she notes.
Not everyone is a fan of the project team concept, however. Cappelli says it can be unpopular because it undercuts the centralized power of management. Finance departments, for instance, hate teams that are empowered to spend what they need to get the job done, he says.
5. Robots will Take on More Work, But Humans Won’t Be Left Behind
Forty-two percent of HR professionals say their organization plans to continue using, expand upon or develop workplace automation over the next five years, according to the SHRM Research Institute’s 2021 Workplace Automation Survey.
Automation and artificial intelligence will continue to evolve to take on repetitive tasks both companywide and specifically within the HR department. Machines can sort through heaps of resumes, handle payroll and more. That frees up HR professionals to work on more-engaging projects, such as strategic planning.
The trick is to use automation to take over drudgery, not to eliminate positions. “Start fundamentally rethinking how your HR department is set up,” says Florian Pollner, a partner with McKinsey & Co. who is based in Zurich. “Automate to the max so you can focus on the human.
“HR needs to make a mindset shift from ‘data and automation are evil,’ ” Pollner adds. “If you don’t see data as our best friend … you’re not doing your job.”
Data science can make predictions of how similar a potential job candidate is to the type of people already in the company who are successful, Cappelli says, so those algorithms will be increasingly useful.
Automation is also being used to monitor employees, and that could become more popular as people work remotely. “Tattleware,” Cappelli points out, can monitor how often a person’s mouse is moved, what’s on their screen and what’s written in e-mails.
Mazor says these monitoring tools can benefit the company if they help measure productivity, but HR also needs to ensure they aren’t overly intrusive.
“More than 1 out of 4 companies purchased new technology during the pandemic to passively track and monitor their workers,” he says, and 95 percent of IT leaders have monitored employees more often since the public health crisis began.
While some workers are concerned that their jobs will be replaced due to automation, many appear to be positive about the prospects: More than half of U.S. workers (58 percent) say they feel confident their organization can train them properly so they can use workplace automation effectively at their job, according to the SHRM Research Institute survey.
HR leaders can help their companies keep up with needed training and evolving technology. “The ways of working change much faster [than they used to],” Pollner says.
6. Phygital Will Be the New Normal
During the pandemic, companies discovered that many employees, especially knowledge workers, could be productive while working from home. Employees also liked this arrangement, and close to half of all U.S. workers (48 percent) are definitely looking to work remotely for their next job, according to an April SHRM survey.
“Hybrid work is here to stay,” Meister says. “It’s a perk. People have lived with it for two and a half years. Try taking a perk away.”
HR’s job is to figure out how to design that perk in a deliberate way. “You have to ask yourself, ‘When does proximity matter, and what is the role and purpose of the office?’ ” Meister says.
HR will need to set up rules, such as establishing that workers must live within commuting distance of the corporate office and must go in at certain times.
A stunning 58 percent of U.S. job holders can work remotely some or all of the time, according to McKinsey & Co. And 87 percent of those with a choice opt for remote work. Based on various studies, McKinsey estimates that the number of remote workers has increased by at least one-third and possibly as much as tenfold since 2019.
Kastle, which tracks the number of workers using its digital keys to swipe into office buildings, says office occupancy was at 43.4 percent just after Labor Day.
Being in the office can be beneficial for deep thinking and creative tasks, such as new-product design, culture-building events like celebrating milestones, and other strategic collaborations.
Zimmerman says the competitive world of sales provides an example of how working in close proximity can be energizing.
“There is no replacement for hearing someone on the phone grinding away, making the pitch. You can’t get that at home,” she notes.
Companies that want workers to show up need to set clear expectations, such as by having team leaders decide on specific collaboration hours and days that everyone is in the office or available. That way, Meister says, workers won’t show up in the office and find a ghost town that makes the commute seem pointless.
HR can be a trusted resource for both management and workers and can zero in on hybrid goals without emotion.
Pollner expects employees will end up working in corporate offices two or three days a week because companies have learned that schedule helps maintain corporate culture. But the combination of physical and digital (phygital) work routines creates a need for upgraded tech tools. Companies need to think about how to mimic some of the upsides of in-person connections by using virtual communication, such as Slack or chat features that allow colleagues to throw around ideas and have side conversations.
But even top-notch digital tools don’t replace the social bonding that comes from in-person work or the creative ideas that can be sparked when you run into a co-worker in the hallway, Mazor says.
Another potential concern of hybrid work is equity. Leaders need to ensure that remote workers don’t feel excluded when many of their colleagues are onsite, Pollner advises, and HR must ensure that workers whose jobs can’t be done remotely don’t feel they’re being treated unfairly, compared to those who can work offsite.
One of Mazor’s consumer products clients looked beyond office workers when designing for remote work. It surveyed factory workers and found that some, such as quality monitors, could work remotely and appreciated the flexibility.
Differences in geography, race, gender, personality (such as introversion) and work styles all need to be considered for hybrid setups to be effective.
“There is an opportunity to think more broadly about inclusivity, and HR has the opportunity to lead and drive awareness,” Mazor says. “HR leaders can help business leaders shape dynamic approaches.”
The rise of hybrid work will likely lead to smaller headquarters, especially as real estate leases expire, giving companies the ability to move. Meister expects companies to opt for more satellite offices that are spread out geographically so employees have somewhere to go when they have a task to accomplish in person, such as onboarding, team brainstorming, training or digging into more-focused work.
“We’re starting to see many of our clients shift to space for people to collaborate that may not require all people coming to the same space in the city,” Mazor says. It may not be as easy as jumping out of bed and rolling into a Zoom meeting, he notes, but regional offices can remove some of the friction of longer commutes.
As companies move into a permanently hybrid future, HR will have a role in helping workers see the benefits of coming to the office.
HR can help companies sort out their real estate requirements, Gary says, by working with team leaders to find out what features to incorporate into future offices to best serve day-to-day needs. That sort of strategic planning can help companies design offices that are optimized for the type of work that will be done there.
Tamara Lytle is a Washington, D.C.-based freelance writer who covers business, government, politics and other issues.
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