Around the HR world, we are observing a mid-year “umbrella” theme of a heavier focus on ROI linked with a desire for greater speed and efficiency. There is also pressure coming from within and outside of HR to bring AI into the function. Beneath this broad theme, we have identified three global emerging trends as we look towards the second half of 2024.
1. HR As a Thought Partner Which Can Efficiently “Get Things Done”
CHROs are under pressure to balance their budget and spend through the lens of quantifying and improving ROI. They are facing the problem of how to adhere to a tighter focus on cost and return, while inspiring and engaging employees.
Post-COVID, the “hearts and minds” approach seems to have come unstuck for many organizations. HR is returning to a more conservative, back-to-basics role as the employer and taking a more frugal approach to areas such as well-being, DE&I, and other elements of employee benefits that were growing in popularity two years ago.
In tandem, we are seeing more business-critical transformations, a heightened focus on skills, and growing activity in mergers and acquisitions, all of which is resulting in an imperative to bring in (or grow) impactful HR leaders who can co-create strategies and roadmaps, placing the organization’s needs at the forefront. Leading multinationals are seeking out a more creatively focused partnership with HR to help re-imagine and re-think what is possible, and to design for the future. Additionally, there is an emphasis on strong execution and delivery capabilities, ensuring the efficient implementation of new strategic plans.
2. A Shifting Global Landscape
We are seeing organizations undergoing transformations in both the business and HR operating models. Many of those with a traditionally federated model are now looking to create more global alignment and synergies so they can respond to challenging markets in a more holistic way. This has resulted in the increasing demand for mobile HR talent with international exposure and a global mindset.
On the process side, there is no better example than the trend of nearshoring HR shared service centers (and business services generally). This is proving to be a boon for Mexico, Central America, and Eastern Europe in particular. Closer geographic proximity provides companies with reduced costs, better cultural alignment, and simplified, real-time collaboration. There is little doubt that we will continue to see more multinationals opting to take advantage of the nearshoring opportunity in these and other key geographies over time.
3. Drive for Agile, Sustainable People Practices via HR CoEs
Beyond human resources, we are noticing companies—particularly the digital savvy organizations—shedding headcount in favor of investing more and faster in products, infrastructure, and technology. Within human resources, we are seeing the beginning of a resulting profound impact on HR CoEs.
HR CoEs are becoming leaner, less centralized, and more focused on ensuring regional or specific businesses get what they need. We are noting a move away from old-school hierarchy and theory and towards more of an agile partnership orientation.
AI, a heightened sustainability focus, and new energy solutions are creating significant transformation requirements. We are seeing this show up in the market with the world’s largest businesses looking to secure deep subject matter experts predominantly in HR operations, reward, mobility, learning, talent, and employee relations to drive and deliver this new reality. These leaders must also be inspiring, innovative, and creative.
Within the talent function specifically, in today’s world where ‘skills’ are increasingly taking center stage, the traditional silos that have long existed between talent acquisition, talent management, and learning and development have blurred significantly, necessitating a more fluid approach and distinct profile of the talent partner. The convergence of these areas demands professionals who possess a deep understanding of talent matters and who can provide comprehensive guidance to the business. We are seeing this similarly in other CoEs, notably Total Rewards.
Many businesses are looking to enhance the employee experience through (for example) personalized communication, better benefits navigation support, improved financial and health literacy, and a better understanding of rewards offered. There are rapid improvements taking place in using employee listening strategies and leveraging AI and data analytics to understand employee behaviors, needs, and preferences. This trend bodes well for subject matter experts across these emerging specialist areas.
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