A little under a year ago we launched the Digital HR Leaders podcast, in which David Green speaks to a wide range of senior HR leaders who are all breaking boundaries and really pushing a data-driven and digital HR agenda. For those of you who are avid listeners you’ll be familiar with one of the key questions we pose at the end of each episode – What will be the role of the HR function in 2025?

As we near the launch of our seventh series we decided to take a step back and have a look at how these pioneers see the HR function evolving and what HR needs to do to prepare for the future to ensure we’re delivering on our digital agenda.

So, what should HR be focusing on to ensure it is preparing for the future? Throughout this blog we will examine five recurring themes that surfaced throughout these conversations. These themes spotlight where HR should be focusing in order to drive real business value in the future.

1.     HR must solidify and further its analytics capability

Over the last year we’ve really seen an exponential growth in the importance of people analytics across the HR function, as David Green describes it “2019 was the year that People Analytics arrived, and 2020 could be the year that it goes into overdrive”. Thus 2025 should be the year that people analytics becomes an established core practice for HR. Uri Ort, the co-founder of Deeper Signals explains that HR has a huge opportunity to take the enormous amount of data available at its fingertips and turn this data into insights to make smarter workforce and people decisions.

In our discussion with Yvette Cameron, founder of NextGen Insights, she highlights the importance of HR really being able to build its analytics muscle in order to not only be able to derive insights but also assume a role in helping interpret and bring these insights back to the business, to help managers and individuals make more informed decisions. While there is still a way to go before people analytics becomes an established core practice, now is the time to really invest in building the data literacy of our HR teams, to be able to do just that.

2.     A continued focus on Employee Experience

The second area of focus for the HR function for 2025 and beyond is a continued emphasis on employee experience and building the right organisational culture for success. Whilst employee experience is definitely a huge focus for most HR functions currently and is set to continue being a focus area way into the future, we must ensure we’re building an employee-centric work environment. Volker Jacobs, CEO of TI-People explains:

“That means a people-centric environment, driven by having people engaged and providing them with what they need to work productively in this organisation.”

While the focus on EX may have initially been driven by increased employee expectations, there is mounting evidence that companies with strong EX outperform the market.

Yvette describes the need for HR to “develop an innovation centre. It should be design thinking led, which focuses on innovating not just HR processes, but the way people work, the way we team, the way we partner, the way we work even with colleagues outside of our enterprise to bring new ideas and insights in.”

Ensuring we’re prioritising employee experience not only promises to drive better employee engagement and productivity but promises to help your organisation win in the marketplace.

3.     Invest in the right skills

There is an increasing need for HR professionals to become digitally and numerically literate and to acquire the skills necessary to process, produce and leverage digital information to create business value. Research conducted by Insight222 on the HR skills of the future reveals that there are six core skills HR professionals deemed as imperative capabilities to develop in order to prepare for the future of work.  

Alongside the above-mentioned skills, Sharon Doherty, the Chief People Officer at Finastra explains that as a function, HR must focus its efforts over the coming years on building a workforce that has the ability to work in an agile way, a data mindset and an understanding of user experience and design thinking.

“We've got to learn some new skills - People Analytics, Design Thinking, UX, Agile. We've got to really understand how agile org effectiveness works. We've got to get massively upskilled on team effectiveness, coaching. And so there's all of this science, some of it's been around for a while, some of this is pretty new, that HR functions really need to build a muscle in and at the same time figure out the purpose of organisations and we keep a really people-centred approach to leadership”

But it doesn’t just stop there, HR must also ensure it remains focused on identifying its purpose to ensure value is being delivered to the organisation. Sarah Johnson, VP at Perceptyx emphasises the importance of HR professionals harnessing their ability to deliver value to the business by ensuring that they’re solving real life business problems using hard facts and data.

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“HR functions of the future need to really emphasise the importance of analytics and it doesn't have to be calculus and heavy statistics, but numbers-based decision making. How do you interpret numbers? How do you feel comfortable with numbers? How do you figure out how do I solve this particular problem or how do I get answers about this?”

HR functions that don’t invest the time in building the necessary skills for the future run the risk of becoming a purely administrative function, while the strategic contribution that they could potentially add will diminish and other functions could end up replacing them.

4.     Help companies win in the marketplace

Leena Nair, CHRO of Unilever, describes HR as the function that “lays the road for the business and that sees the future and connects it to what's happening internally better than any other function”. Ultimately HR’s purpose is to help the organisation win in the marketplace. However, in order to really deliver on the digital agenda of the future, HR must evolve to create that environment that allows the business to win in the marketplace. As Dave Ulrich co-founder and principal at the RBL Group, explains creating a winning environment is more than just building a sense of belonging, meaning and purpose, it’s about embedding a set of principles that truly nurture a winning environment, and that begins with putting the customer of HR first.

HR is evolving, and we're continuing to evolve and the most important thing HR can give an employee, is a company that wins in the marketplace. And so when you say, where is HR headed, I think one of the evolutions is from inside the firm with our customer being our employee and the stakeholders inside to outside the firm. That what we do in HR is not because of... It's not what goes on inside, it's how we add value to customers, to investors, to communities. My sense is, business leaders are beginning to sense that, that this is not HR yesterday, this is HR today that creates real value for the business,

As the value of data continues to increase, the opportunity for HR to leverage its people data - the new business currency, to secure its role as a strategic advisor to the business rises. However, in order to solidify that role we must ensure that everything we do as a function is grounded in facts and figures. Sarah Johnson explains

“Leadership live in the world of numbers and data and analysis, and if we want to play in that strategic advisor space, we have to do the same and that's what really gives power to the work that human resources do.”

If we want to build the credibility of the HR function similarly to that of our counterpart functions such as finance, R&D and marketing, then we must ground ourselves in the data, in the same way that they do, allowing it to guide the decisions we make.

Stella Lupushor, Chief Reframer at Reframe.Work highlights that there is an opportunity facing HR to embrace the role of ‘business development leader’ as we continue to rethink ways of identifying and sourcing the right types of talent to bring to the organisation. She explains:

“HR can also be an uber marketing arm because it's about finding and marketing your brand, the employment brand, to this wider talent pool. Talent is becoming more and more empowered and they make very different choices about the brand they want to come and bring their talent too. So, creating the compelling story and experience for that talent to bring their best is really where the superpower of HR will be in the long term, as well as the strategic thinking and business focus that brings in value.”

In order to prepare for the future we must ensure we’re building our strategic credibility by harnessing the power of our people data now and allowing these insights gained to inform the decision making process, moving away from gut feeling to solid decision making.

5.     Become the custodian of work not the workforce

Historically HR has been considered the custodian of the workforce managing its employees, creating the right tools and policies to drive productivity that help organisations win in the marketplace. However, in the future HR has the opportunity to become the custodian of work, explains RJ Milnor, VP of Talent Management at Uber.

“What I mean by that is looking at the body of work that's happening across the enterprise and understanding how to allocate that work to the appropriate channel. So, it becomes slightly less employee focused and much more work focused. Let me give you a few examples. Right now, I think most of us should have a good sense of what our employee base looks like. Maybe our contractors as well. We may have a good sense of the projects that are happening across the enterprise. I think it's a lot more difficult for many of us, but we've got very little insight into the corpus of work that's actually happening across the enterprise.”

Volker Jacobs, CEO of TI-People goes on to explain that such an operating model requires a vast amount of agility, a skill we must nurture within HR:

“When I say HR will become more agile, what I mean is I believe that the future HR function will have 50% of its capacity pooled, and then centres of excellence and other specialist units will draw from that pool by project or business, HR will draw from that pool by project.”

Taking such an approach provides HR with a much clearer understanding of the full body of work across the organisation, allowing them to not only plan for that work, ensure the necessary resources exist and ultimately be the arbiter of that, helping get the work to the right place so that it can be done more efficiently.

In order to ensure we’re preparing for the future, HR must support a data-driven, digital and experience-centric culture. It must continue to invest in the right skills that will enable HR to support companies to win in the marketplace. As HR leaders and professionals, we must take responsibility in positioning the HR function for continued success, but with that comes a steep learning curve, so HR professionals need to adopt a growth mindset, be comfortable with the need for continuous learning, and learn to flourish in a constant state of change. This is how HR can prepare for the future, and ensure that the organisations and people it supports will also be ready for whatever the future holds.

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ABOUT THE AUTHOR

Manpreet Randhawa is the Head of Digital Content for myHRfuture.com. In her previous role as the Change Management Lead for People Planning, Design & Analytics at Cisco Systems, she was responsible for defining and executing on the change management strategy to successfully implement and sustain the digital and cultural transformation across the enterprise. Manpreet is very passionate about change management and technology and how to use both to transform the employee experience and prepare companies for the Future of Work.