Over the last two decades or so, HR as a function has been changing due to the rapid transformation in the business environment and technology. We believe that the COVID-19 pandemic will accelerate the transformation of HR. Let’s take a look at the key trends in HR for 2021 and beyond:
Many organizations have lagged 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 two key factors will drive the changes in HR in 2021:
Post-COVID-19, we might see a sharp economic recovery in 2021. The pent-up consumer demand from 2020 might also help.
Hence, organizations will be firing on all cylinders to seize this opportunity to grow their businesses and recoup some of the losses from 2020.
Hence, 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
What was once forced upon them due to the pandemic, might become the new normal for many organizations; as they realize the many benefits of having a majority of their employees working remotely regularly.
Hence, having tested the 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 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
Let’s take a look at the key trends in HR for 2021 and beyond:
1. Large-scale Use of Technology
2. Flexible Working Model
3. Increase in Diversity
4. Reskilling and Internal Mobility
5. New Breed of Leaders
6. Continuous Performance Management
7. Focus on Employee Engagement
8. Changes in Employee Benefits
9. Increasing Use of Data, Analytics and AI
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.
So, 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
Also, for those organizations, that have never tried the work-from-home or the remote working models, 2020 was the year of reckoning.
Organizations should have learned many lessons from the rude shock of the lockdown. Remote working or working from home will be the new workforce management strategy.
Organizations that had experimented with working remotely in a small way 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 more part-timers, freelancers, and temporary project resources.
Also, 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 those seeking only part-time or remote employment due to personal reasons.
Read the Guide for Ensuring Diversity and Inclusiveness at the Workplace
In 2021, high competition in the talent market will make it difficult to find candidates with the desired skills quickly.
In such a situation, reskilling existing members of the workforce can prove cost-effective to address the talent shortage.
Hence, reskilling will give organizations the advantage of utilizing and retaining existing talent.
Hence, re-skilling will be high on the agenda of the learning and development leaders.
The leaders who have thrived in 2020 are those who have managed to grapple with unfamiliar crises.
They coordinated with their remote teams effectively and kept their team members motivated and productive.
They also effectively utilized a variety of digital tools and platforms to ensure customer expectations were met despite multiple challenges.
2021 is likely to see the rise and growth of this new breed of digital-first leaders to even higher levels.
Therefore, 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
The flux in the business environment and dynamic goals will push organizations towards shorter performance assessment cycles and even continuous performance management.
Hence, 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.
Therefore, managers and supervisors should step in to provide a deeper level of feedback, mentoring, and coaching.
Read about Automated Performance Assessment – Rise of the Machines
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. So, remote workers will need regular validation and appreciation from their supervisors and peers.
Hence, 2021 is going to see increasing use of digital employee rewards and recognition platforms to motivate the remote workforce, promote teamwork, build organizational culture, and drive commitment and loyalty toward the organization.
Read about 5 Tips to Engage the Work from Home Employees
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.
Remote working will result in ‘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, counseling, online consultation, etc. will acquire greater importance in 2021.
Read about Employee Wellness Ideas for Work from Home
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.
Hence, 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 can understand and leverage these changes quickly can gain a significant competitive advantage over their industry peers and demonstrate higher business growth.
Read Key Employee Rewards and Recognition Trends in 2021 and Beyond
Sagar Chaudhuri is the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn
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