Over the last two decades or so, HR as a function has been changing due to the rapid transformations in the business environment and technology. Many organizations have lagged behind in adopting modern HR practices and technologies. The Covid-19 pandemic and its aftermath hit them hard, forcing drastic changes overnight in the way they operate; the changes that they had been postponing for years! We believe that the impact of these changes in 2020 will accelerate the transformation of HR in 2021. Let’s take a look at the key trends in HR for 2021 and beyond:
We believe that two key factors will drive the changes in HR in 2021:
1. Post-pandemic Economic Recovery and Business growth
With the easing of social distancing norms and other restrictions, the possible rollout of Covid-19 vaccines and economic stimulus packages by governments across the world, we might see a sharp economic recovery in 2021. This might be helped along by the pent-up consumer demand from 2020.
Organizations will be firing on all cylinders to seize this opportunity to grow their businesses and recoup some of the losses from 2020. This will result in increased HR activities on many fronts – hiring, performance management, employee engagement, learning and development, etc.
Read Long-term Impact of Corona Virus Pandemic on the Workplace
2. Rise and Growth of the Digital Workplace
What was once forced upon organizations as a result of the pandemic-driven lockdown and social distancing norms, might actually become the new normal for many organizations; as they realize the many benefits of having a majority of their employees working remotely on a regular basis.
Having tested waters with the work-from-home model, many organizations are likely to tweak their operating models in 2021 to have only a minimal number of employees actually working from physical office locations. This will help them to drive down their operating costs significantly and make good some of the losses from 2020.
Read Post-COVID: ‘Digital Workplace’ is a must for all organizations
What are the key trends in HR expected in 2021?
Let’s take a look at the key trends in HR for 2021 and beyond:
1. Large-scale Use of Technology
What started in a big way in 2020 will get even bigger in 2021. Organizations are likely to go full steam on the complete digitization of HR processes right from hiring and onboarding, to talent management, learning and development, performance management and even employee exit.
Armed with fresh budgets in 2021 and the prospect of higher business growth, organizations are likely to invest more in digital platforms for collaboration and communication, employee self-service, employee recognition and learning management, just to name a few. ‘Go digital’ will be the new mantra for HR!
Read about 7 Ways HR Software can support your Remote Workers
2. Flexible Working Model
For those organizations, which have never tried out the work-from-home or the remote working models, 2020 was the year of reckoning. There were many lessons to be learnt from the rude shock of the lockdown. Remote working or work from home will be the new workforce management strategy.
Before 2020, organizations which had experimented with a small segment of their workforce working remotely will now look at moving a much larger segment of their workforce to permanent work-from-home status. Other organizations might also look at a significant number of their employees working from home regularly and stepping into an office only on a ‘need-basis’.
In 2021, the working model is likely to become more flexible than ever before – work is likely to get increasingly defined by goals and tasks, rather than by time and location. This should also give a big boost to the ‘gig economy’ with greater numbers of part-timers, freelancers, and temporary project resources working for organizations.
3. Increase in Diversity
As a corollary to the flexible working models, organizations are likely to hire more diverse talent in their workforce in 2021 – with the flexibility of time and location of work, we are likely to see students, new and returning mothers, differently-abled, etc. joining the workforce in larger numbers.
We are also going to see more talent getting hired from smaller places, who will work remotely. The ‘gig model’ will also open the doors for many who are seeking only part-time or remote employment due to personal reasons.
Read the Guide for ensuring Diversity and Inclusiveness at Workplace
4. Re-skilling and Internal Mobility
In 2021, the high level of competition in the talent market will make it difficult for organizations to find candidates with the desired skills quickly. In such a situation, efforts to re-skill existing members of the workforce can prove to be a cost-effective way to address the talent shortage.
Re-skilling will not only give organizations the advantage of utilizing and retaining existing talent but address the new skill requirements due to changing business needs. Re-skilling, in tandem with internal movements, will help organizations to bridge the skill gap while leveraging the existing knowledge and skills internally. Hence, re-skilling will be high on the agenda of the learning and development leaders.
5. New Breed of Leaders
The leaders who have thrived in 2020 are those who have managed to grapple with unfamiliar and crisis situations, coordinated with their remote teams effectively, kept their team members motivated and productive, and effectively utilized a variety of digital tools and platforms to ensure customer expectations are met despite multiple challenges. 2021 is likely to see the rise and growth of this new breed of leaders to even higher levels.
Leadership development will see an increased focus on developing the digital skills required for leading virtual teams in an increasingly digital workplace.
Read about 5 Effective Tips for Remote Management of Teams
6. Continuous Performance Management
The flux in the business environment and dynamic goals will push organizations towards shorter performance assessment cycles and even continuous performance management. The widespread use of digital work tools in an integrated fashion will enable employee performance to be measured and assessed easily without too much manual effort.
‘Intelligent’ performance management systems will be able to provide first-level feedback to employees and highlight skill gaps and training needs. Supervisors can step in to provide a deeper level of feedback, mentoring and coaching.
Read about Automated Performance Assessment – Rise of the Machines
7. Focus on Employee Engagement
A remote workforce needs to be constantly engaged to prevent their gradual isolation from the organization. Hence, in 2021 there will be a renewed focus on employee engagement, albeit through digital means. Remote workers will need regular validation and appreciation from their supervisors and peers.
2021 is going to see increasing use of digital employee rewards and recognition platforms to motivate the remote workforce, promote teamwork, build organization culture, and drive commitment and loyalty towards the organization.
Read about 5 Tips to Engage the Work from Home Employees
8. Changes in Employee Benefits
The employee benefits model will get redefined in 2021 with the focus shifting away from ‘on-site benefits’ like a cafeteria, transportation, welfare activities, etc. to ‘at-home benefits’ such as backup power, high-speed internet and ergonomic furniture. Wellness related benefits such as health insurance, health check-ups, online fitness activities, counselling, online consultation, etc. will acquire greater importance in 2021.
Read about Employee Wellness Ideas for Work from Home
9. Increasing Use of Data, Analytics and AI
The widespread use of digital tools and platforms across different HR processes will generate massive volumes of data that can be leveraged to provide actionable insights, make smarter predictions and drive ‘intelligent’ decision-making.
From the smarter assessment of candidate-fitment for hiring to continuous assessment of employee performance and training needs, and even prediction of retention risk of individual employees; analytics and artificial intelligence will play a much bigger role in 2021 and beyond. HR systems will be expected to provide real-time insights and decision-making capabilities.
The key trends in HR in 2021 will be driven largely by the happenings in 2020 that have accelerated the long-term changes in HR that were already underway for the last several years.
Organizations that are able to understand and leverage these changes quickly can gain a significant competitive advantage over their industry peers and demonstrate higher business growth.
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