Usually we acknowledge the people who have given their time to help us produce content for our audience through a mention or at the bottom of an article, but these interviewees were so kind and gracious in dedicating their time and mental energy in helping us develop this piece that it really did warrant an up-front mention.
Thank you to Tim Low of Payscale, Raj Sheth of Recruiterbox, Peter Kazanjy of TalentBin, Jonathan Ferrar of IBM and their representatives for sharing their time and knowledge with us.
What is the Future of HR?
When I was a child I had a vivid imagination -in many ways I still do. I was always looking to the future with a bright eye and hoped that it will be cool and better than the present. I watched science fiction movies and read futuristic books quite a bit (and still do,) probably because I wanted to see what the world would be like then. Not much has changed, except that now my need to see the future is restricted to a few different topics, one of which is the future of the profession, discipline, social technology, and/or method that we today call Human Resource Management (HR).
Today, the HR function is much more developed than it used to be, but because of its short history compared to other professions (like food production, or the legal profession), it has still not reached full maturity, tells me Jonathan Ferrar, VP of Smarter Workforce for IBM, who bought Kenexa a few years ago.
It does make one wonder about quite a number of things when she hears this statement, because it brings into question the nature of the words “Human Resource Management” itself. Is HRM a profession, a method of looking at the organization, or perhaps a way of doing business? Even though the formal profession, or actually its predecessor, “Personnel”, was invented at the dawn of true manufacturing automation when Ford Motor Company needed a dedicated department to manage its ever-growing labor workforce earlier last century, the function of managing a workforce has existed for thousands of years. It would have had to. The Egyptians had to organize their labor force over their 7 thousand years of building history, the Babylonians had to hire skilled laborers for their Hanging Gardens, and even the mysterious British Stonehenge needed some level of organization to be built before the structure itself could be built.
Was that also HR? and if so is HR simply a collection of methods to reduce risk found in the nature of human behavior. Perhaps that is a philosophical topic requiring a much more in-depth analysis, but its important to consider and be aware of past history of HR before we can discuss its future.
Today, the HR *function* is experiencing what some are calling a quiet revolution. Tim Low, VP of B2B Marketing at Payscale, which has built one of the largest online salary databases, defines the changes as falling into 3 categories: ” 1– The democratization of data [in human-related decision making] 2– The changing nature of the employee-employer relationship and 3– The increased efficiency of labor markets resulting from the above two changes.”
Though all of those have powerful impact on the HR function, my research led me to believe that nothing will impact the function more than the influx of data into the HR decision-making process. There is simply nothing as powerful or as omnipresent as the hunger by the industry to integrate data into every aspect of business, and government. It’s true that the factors Low mentioned can have quite a number of ramifications going into the future, but almost none of them are quite as obvious as they seem and so I caution against making over-simplistic assumption about them.
“The story has become more complex and more simple [at the same time],” says Raj Sheth, CEO and co-founder of Recruiterbox, an ATS and resume management tool. Sheth agreed with Low on the powerful impact of the democratization of data, meaning that data has become the new tool in which so many important decisions are being made in the HR function. To support this one only has to look at the HR services industry and how it has experienced an explosive growth in recent years in this arena. Most of this growth has come from new technologies that are enabling organizations to collect, use, analyze, and disseminate their data hoping to make better business decisions.
Pete Kazanjy, co-founder of TalentBin by Monster tells me that this quiet revolution extends to more than just data collection, analysis, and use for decision making, or just the changing nature of the employment relationship, but that it extends all the way to “Automation” of all the above, and more. Pete imagines a world where the “influx of data”, and the “automation of decision making” has powerful impact on the hiring process itself. The impact ranges from “making resumes obsolete” by digitizing a worker’s implicit professional activities, to the creation of your own personalized “smart” job agent, a tool that could instantaneously let you know of a new opportunity as it becomes available, and would notify the employer of your availability and matching digital work as well – similar in concept to currently existing technologies, but combined with a powerful Intelligence, and “digital work” capabilities. Kazanjy calls this “Total Information Recruiting.”
The majority of industry experts we spoke to agreed that data will be the defining, driving factor in the upcoming changes we will see in Human Resources, whether it affects recruiting, performance management, collboration or innovation would depend on how each individual organization feels it should use its data. Low believes that the increased adoption of active, live salary data in compensating employees will allow businesses to be ever more competitve in acquiring talent, but because of fast-moving labor markets he cautions that the 3% traditional cost of living adjustment currently being used as a standard when allocating raises for employees is no longer enough to attract and keep top talent. “This approach is not appreciated. You may be overpaying some segments and underpaying other segments of your [labor workforce.]” He adds that the majority of companies “are not accustomed to this increase in pace when it comes to salary changes,” and that this will cause a shift in the way employers look at an important part of the HR process – compensation.
The internalization of data into decision-making can make quite a number of tasks easier and would make tools more powerful. Sheth looks at some of the new trends occurring in this area: “eHarmony is getting into hiring [and] Google has taken the the HR function to very analytical levels,” he says. What some of these organizations are beginning to realize is that using data to improve HR decision making in one part of the organization without aligning it to other parts leaves some gaping holes in their tactics and overall strategy.
This total integration of data would require some human changes as well. “HR will have to become much more analytically focused, much more business oriented, much more behaviorally focused on business results, and whatever skills are needed for each function,” says Ferrar.
Perhaps the improvement of the quality of HR professionals themselves will become a contributing factor to changes in the HR function in the future. Today, a large segment of HR professionals do not possess quantitative skills, and HR academic programs do not emphasize those skills. For many, the question is do they need specific quantitative skills, or will strong analytical skills suffice in order to be able to interpret the data and use it effectively. One issue facing the profession is that “the professional qualifications that HR professionals can get are not universally accepted [throughout] the world. You don’t need the qualifications to be successful. In other professions you must have the right qualification to be successful. [There are] clear and universal metrics that are understood worldwide for most professions. [For example,] in the legal profession there are clear definitions. The profession lacks structure, ” says Ferrar.
In addition to the likely change in HR professionals’ qualification, there will also have to be some behavioral changes from everyone even mildly involved in the human aspect of business and government if they want to be ready for upcoming changes. Before full adoption of advanced methods that bring greater value to the organization, HR professionals will have to re-invent ” how HR organizations interact with the external and internal world,” says Sheth. “We don’t talk about Google’s algorithm anymore,” because it has become part of daily life, and HR departments will have to become mentally comfortable with the changes such that they become “part of normal behavior in 15-20 years,” he adds. The basic shift in mindset must take advantage of a “continuum of analytical insight,” says Ferrar.
Ibm’s Ferrar has some detailed insights into what this shift will look like: Currently you can segment how data is used in the organization into several tiers of analytics, including “predictive modeling, reporting/dashboard, cognitive modeling, and social analytics.” These all exist and are being used by some companies today. He tells me that the future is marked with increased adoption by HR professionals of these methods and tools, and more importantly, thatall of them will start “coming together to focus on business outcomes.”
With all these changes currently happening and continuing to drive new methods and technologies in function of HR, and those who choose to practice it, one question does remain: Will we lose touch with the part which makes this profession about the people, their engagement, happiness, productivity or quality of life? Or will changes in the way we do our jobs only mean positive consequences? Is there a chance that we can digitize, datafy, and automate the workplace to a point of dire consequences, and of no return?
“A human connection will not go away. The personal touch will not go away, ” says Sheth. I hope you’re right!