What HR leaders must focus on in 2021

COVID-19 has thrown traditional ways of working out of the window, bringing a ‘new normal’ into our lives. HR leaders are now looking ahead to see how the world of work will be in 2021 and beyond, and what should be the important areas to focus on for the growth of the business and the workforce.

What are the main focus areas for businesses in 2021?

According to HR professionals, growth will continue to be the main focus area in 2021. Cost optimization, however, has moved up in importance, featuring more prominently than in previous years. Here are the main priority areas for business in 2021:

Improved operational excellence: 65 percent

Business growth: 64 percent (7 percent less than in 2020)

Business transformation: 54 percent (7 percent less than in 2020)

Cost optimization: 50 percent (13 percent higher than in 2020)

Success through innovation: 47 percent

Regulatory and risk compliance: 15 percent

What does HR need to look at?

The pandemic is unlikely to abate anytime soon. HR leaders are working on what they need to do to facilitate business growth and workforce development in 2021 and beyond. Ensuring that employees have the skills required to be successful professionals in the new world of work is the topmost concern, but there are other factors to consider as well.

Which are the top trends and priorities for HR?

In the course of their work, HR professionals must consider a variety of factors as per their importance for the workforce in this new world of work. Here are the most important trends and priorities:

Building critical skills and competencies that the organization requires

The top priority for 68 percent of HR leaders, this ties in very closely to the priority areas for the business. There are, however, several challenges in achieving this objective. These include the following:

Lack of awareness about the skill gaps of current employees: 36 percent

Poor integration of learning into workflows of employees: 33 percent

Inability to create and deploy solutions to develop skills at the same pace as how skill needs are evolving: 31 percent

The pandemic has made the challenge even tougher, with traditional methods used by HR professionals unable to predict skill requirements adequately. The inability to pick up the requisite skills is to the detriment of the employees as well as the larger organization.

Every year, the total skills one job needs are going up by as much as 10 percent

Of the skills that job postings asked for in 2017, 33 percent will not be required in 2021

71 percent of learning and development (L&D) professionals feel no more than 40 percent of the workforce will need new skills after the pandemic, as against 29 percent who feel more than 40 percent will need this

What is required is a dynamic approach. Every stakeholder across the organization must work together to understand how skill requirements are changing and how these can be met. The methods include skill-sensing networks for shared ownership across the organization, targeted skill accelerators that adapt available resources and learning delivery options for the highest impact, and two-way skill transparency allowing employees and organizations to exchange information.

Organizational change management and design

This is the top priority for 46 percent of HR leaders. In this context, the challenges are the following:

Managers are not capable of leading change: 37 percent

Employees tired by all the change: 36 percent

Leaders ill-equipped to lead change: 28 percent

Organizations are unable to respond at the pace required by the conditions. They are hampered by inflexible roles, networks, structures, and workflows, which further lead to work friction for employees. Less than 20 percent of HR leaders believe workforces can effectively change direction, with their responsiveness hampered by misaligned work, locked resources, fixed processes, and overloaded teams.

HR professionals must facilitate higher employee responsiveness through redesigned work strategies, approaching work in a future-forward manner. Of these leaders, 86 percent expect a significant-to-moderate impact from designing for flexibility.

Bench strength

For 44 percent of HR leaders, this is the most important priority. Their challenges include:

Low diversity in the leadership bench: 49 percent

Poor succession management: 35 percent

Poor development of mid-level leaders: 27 percent

Just 44 percent of employees have faith in the crisis navigation abilities of leadership. Unclear career paths, low exposure to senior leaders, and low mentorship and career support drag down underrepresented talent. Diversity networking becomes important – in experience, role, and skill. It boosts talent mobility opportunities by as much as 3.4x.

Future of work

This sits on top of the pile for 32 percent of HR leaders. They are challenged by:

Absence of clear strategies for the future of work: 62 percent

Struggle to adapt talent processes to market changes: 37 percent

Unpreparedness for worker displacement by AI and automation: 26 percent

When it comes to knowing how the pandemic will affect HR and work in the long term, the issue is where to start. It is important to identify trends relevant to the business, evaluating them on relevance, impact, and opportunity.

Employee experience

The most important priority for 28 percent of HR leaders, the challenges here include:

Employee engagement and experience strategies: 29 percent

Poor impact assessment of employee experience investments: 28 percent

Employee experience promise not communicated by employee value proposition: 25 percent

The hybrid workforce of today gets different values from different locations. HR professionals must ensure company culture and employee experience keep up with expectations and requirements. It is critical to see how remote work is impacting the employee experience, right from recruitment to talent development and everything in between.

What are the important lessons for the future?

HR professionals must develop and evolve critical roles and responsibilities at the leadership and managerial levels. Organizations must become resilient while maintaining efficiency, helmed by a diverse leadership bench. Most importantly, the employee value proposition must champion mental health, social responsibility, and purpose.