More employers today see HR as a proactive, integrated approach to managing people with a longer-term strategic function, but it wasn’t always like this — we wind back the clock to a time when HR looked very different indeed.
The state of HR 20 years ago
It’s the year 1999. The first minimum wage is introduced in the UK, Ricky Martin is Livin’ La Vida Loca and every business is living in fear of the Millennium Bug.
Paper-based and mostly administrative
HR, or personnel, is an administrative department mostly dealing with contracts, pay and employment-related functions. It sits in a separate silo far away from, and beneath, finance. People from the payroll team rarely communicate with personnel. And personnel is not generally considered critical to the mission.
To carry out employment-related functions, staff have to fill in paper forms and walk them to the personnel department or use internal mail. (Or they use email, one of the only business uses for the internet.) Personnel staff are the only ones using personnel software through flat-panel LCD monitors. IT is mostly hardware and on-premise. ‘Cloud’ refers to a fluffy white thing in the sky.
Data was siloed and reporting was laborious
All staff data is captured and stored in siloed, static, offline systems. Most processes are handled in documents and spreadsheets. Data for reports is gathered from these different systems, in varying formats. It is then manually checked, manipulated and consolidated with inaccuracies (often created by human error) corrected. These reports take days/weeks to compile, and often the data becomes quickly out-of-date.
Productivity is not measurable. Many large organisations don’t even know how many staff they have, let alone what they’re doing or how they’re performing.
Staff benefits were not business-critical
Personnel teams don’t have access to budgets that will progress the workforce. HR directors are influencers but not decision-makers, and they don’t hold any purse strings. There’s no integrated people management strategy.
Personnel deals with ‘soft’ benefits only. In the money-focused late-nineties, it is not seen as delivering any real business-critical benefits. The only financials discussions involving HR are around replacing HR staff with HR software. And vendors have a hard time proving the return on investment (ROI) of this software to the wider business.
What has changed in HR since 1999?
Do you recognise this HR department? For some organisations, little may have changed in 20 years. But things have changed radically in the world, in business and in HR. Let’s fast-forward to today.
It’s 2019. The minimum wage has more than doubled (but so has the size of the UK’s gig economy in just three years); hardly anyone buys music in hard copy format anymore; digital technology is reshaping almost everything we do. Meanwhile, in HR....
Proactive app-based people management
Within forward-thinking businesses today, HR is a proactive and integrated approach to the management of people. It’s fast-becoming a department with a longer-term strategic function; and one which allows HR teams to focus on people, not admin.
Staff interact with HR via mobile self-serve apps and chatbots powered by conversational artificial intelligence and machine learning. Much of the work is done on connected mobile devices. Tasks are often completed away from the office and out of office hours, or whenever it’s most convenient. Email is used sparingly. The majority of businesses have migrated their software systems to the Cloud.
HR new uses real-time visibility and instant reporting
Almost all people-related data is stored in the Cloud and retrieved from a single source of truth across integrated systems with a common unified user interface. The data (always up-to-date) is accessed from visual, role-based, configurable dashboards with embedded analytics. Reports take minutes to create, and they give real-time insight and complete visibility over people data.
Most metrics are measurable and visualised in reports which can be created from a variety of perspectives. The majority of organisations, even global enterprises, know how many staff they have, how each employee is performing and what contribution they make to the wider business.
HR is fundamental to future workplace success
Forward-thinking organisations are emphasising the value of HR to the wider business and elevating its importance. As such, it is rapidly becoming the remit of the C-suite, with HR directors sitting at board level holding titles like Chief People Officer.
Within market-leading organisations, the role of HR goes far beyond the basic administration of employees. The profile of HR is rising steadily, and the benefits provided by HR teams (productivity, retention and engagement improvements, for example) are being recognised as business-critical. People management strategies are commonplace. The ROI of the right HR software is more widely understood; the question for businesses now is not whether to deploy cloud HR software, but which implementation partner to choose.
Staff/people are the most important business asset
In HR today, people talk about human impact, employers are concerned about employee wellbeing and workplace culture; they’re focused on improving the people experience and optimising employee engagement. Employers are keen to provide a healthy work-life balance, experimenting with flexible working and remote working initiatives. The best employers are trying to eradicate ‘busyness’ (where staff do not ‘switch off’ outside of working hours). Most are investing in far-reaching benefits packages, collaborative digital tools and workspace design.
People are finally becoming the most important asset in every business. And rightly so. A lot has changed in two decades, and more changes are on the horizon. For example:
- There’s a multigenerational workforce, with younger generations driving expectations around learning, training, technology use and flexible working.
- The skills shortage is affecting every type of business; recruiting, developing and retaining the best talent is a struggle.
- Productivity is suffering.
- Workforce legislation compliance — regulations around gender pay gap and pay ratio reporting; General Data Protection Regulation (GDPR) and, potentially, Brexit are more complex, and more regularly updated.
What is the future of HR?
Many things have changed since 1999. And no-one can predict the future. But one thing is certain, as the role of digital automation expands, we must remember technology is an enabler, we need to focus on talent, and we need to use technology, like Cloud HR software, to focus on people, not admin.