HR Trends For 2022 | Future Of Human Resource Management

1. Setting the Hybrid Work Model for Collaboration

A flexible work model accommodates the workforce’s diverse needs. As a result, the shift to hybrid and remote work models continues to gain momentum in 2024.

For one, businesses save money with reduced office space requirements, utilities and overhead costs with hybrid and remote work models. More importantly, this gives employees more control over their work-life balance, reducing commuting time and increasing job satisfaction, which can help attract and retain employees.

Giants like Ford, Microsoft, and Amazon have joined the hybrid work bandwagon, reducing office space requirements and overhead costs.

According to an AT&T study, hybrid work is expected to surge to 81% by 2024. Currently, most businesses are actively implementing or considering adopting a permanent hybrid work model, securing its place in the future of human resources.

As experts Mark Mortensen suggest, creating a psychologically safe environment and understanding the workforce’s diverse needs are paramount for seamless collaboration. Here was their take on the podcast — from David Green’s podcast “How To Foster Collaboration Between Hybrid Working Teams”:

Get in there, have conversations, try and understand the experience of people and the needs of people and do that in an environment that is psychologically safe, where people feel like they can be honest and open because also, you won’t be successful if you only get the veneered version written on the surface.”

2. Generative AI To Enhance HR Processes

Key Question: Are you ready to make generative AI part of your strategic initiatives?

Generative AI is a transformative force in HR, streamlining talent acquisition, employee engagement, and workforce management. Its applications range from crafting personalized job descriptions to developing virtual assistants for routine HR inquiries.

It enables the creation of personalized job descriptions and virtual assistants to handle routine HR inquiries, enhancing efficiency and freeing HR professionals for strategic tasks.

HR vendors are actively developing and deploying generative AI to streamline and enhance different aspects of talent acquisition, employee engagement and workforce management.

For instance, generative AI algorithms can help create job descriptions and postings by analyzing vast datasets to determine the most effective wording to use.

According to a recent McKinsey report:

Right now, if you’re an organization with tens of thousands of applicants, you may or may not have super customized ways of reaching out to the people who have applied. With generative AI, you can include much more personalization about the candidate, the job, and what other jobs may be available if there’s a reason the applicant isn’t a fit. All those things are made immensely easier and faster through generative AI.”

Companies are also harnessing generative AI to develop interactive chatbots or virtual assistants to handle routine HR inquiries and provide prompt responses. This frees up HR professionals to focus on more strategic tasks.

With all the hype, it’s no surprise that the generative AI in the HR market will be worth around $1,669.3 million by 2032.

However, despite its roaring popularity, generative AI, just like any other technology, isn’t a silver bullet. Another McKinsey report provides some perspective:

Excitement over this technology is palpable, and early pilots are compelling. However, fully realizing the technology’s benefits takes time, and leaders in business and society still have considerable challenges to address. These include managing the risks inherent in generative AI, determining what new skills and capabilities the workforce will need, and rethinking core business processes such as retraining and developing new skills.”

One question that arises on the hot topic of AI in HR is how HR teams can ensure the ethical use of data and maintain privacy. Human resource specialist Sahana Rao expands on this concept when we asked her about the rise of AI and how HR professionals can ensure ethical use of data and privacy:

It is an ongoing process for an HR specialist that requires vigilance, adaptability and commitment to ethical principles. First of all, a clear and transparent communication to employees on how AI will be used in HR analytics while addressing the concerns about privacy will go a long way in building trust.

“Secondly, wherever possible implementing techniques of anonymization and pseudonymisation to protect individual identities in data sets will be meaningful. Thirdly, obtaining explicit consent from employees safeguards data processing interest and ensures adherence to GDPR (General Data Protection Regulation).

“Last but not least, ensuring robust data security measures, conducting regular audits, reviewing compliance and scrutinizing ethical algorithms of AI will uphold the use of data and maintain privacy.”

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3. Human Leadership

Key Question: Do you know the difference between managers and leaders and the impact of negative management experiences? Per a recent Forbes article by Steve Taplin about the distinction between managers and leaders, “Leaders consider people, and managers get motivation from team success.”

In the article, Taplin explains why better leadership is critical:

Many workers, in my experience, say they left a job because of their manager, revealing serious issues among office workers who want promotions and want to make a difference at the corporate level. Consequently, bad management is a huge problem from a talent perspective.”

While managers can be leaders, this is only sometimes the case. Modern leadership is evolving into a more human-centric approach. Businesses with corporate structures tend to blur the lines between management and leadership roles, leading to a mixed organizational culture.

Encouraging leaders to prioritize communication, teamwork, and employee recognition fosters a healthy organizational culture. Self-reflection is also vital for leaders to remove obstacles to effective leadership and navigate an increasingly complex world.

What does it entail? Reworked lists the following ways to encourage leaders toward human leadership:

• Improve company communications
• Prioritize teamwork and collaboration
• Invest in people
• Encourage feedback
• Give recognition, rewards and compliments

Besides company initiatives, leadership expert Kerry Azar emphasizes the need for self-reflection to become “radically human” and remove obstacles to effective leadership:

While our world is becoming increasingly complex and unpredictable, it’s also providing us with countless opportunities to reflect on what leadership means and to actively develop the mindset, skills and tools that support outstanding leadership.

“If leadership is about becoming ‘radically human,’ then there’s one thing we can do daily. Ask ourselves, ‘How am I getting in my own way?’ Answer truthfully and be prepared to act.”

4. Predictive Analytics for HR

Key Question: How are you utilizing data for effective decision-making? Predictive analytics and workforce analytics are game-changers in HR, empowering professionals to manage employees proactively. Harnessing the power of data empowers HR professionals to be proactive rather than reactive in managing employees.

According to Rao:

AI and predictive analytics together contribute to a more agile, responsive and forward-looking approach to managing the workforce in alignment with organizational goals. AI examines historical statistics, market trends, dynamic business conditions, demographic data, upcoming projects and other pertinent aspects, which enables firms to predict manpower demands, plan for growth and help make informed decisions about recruitment.”

The SHRM article Predictive Analytics Can Help Companies Manage Talent But Only if They Ask the Right Questions says:

Organizations of all sizes can benefit from studying their past and present data and using it to anticipate the future and how they should react. It’s important to note that predictive analytics doesn’t simply mean perpetuating past patterns into the future.“

From performance management to succession planning, data-driven strategies optimize processes for success.

It’s also important to note that as workforce analytics and predictive analytics continue to evolve, organizations must harness data ethically, prioritizing privacy standards to protect employees’ rights and well-being. Predictive analytics ensures organizations don’t merely perpetuate past patterns but anticipate and react to the future.

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5. Change Management

Key Question: Change is inevitable. Are you ready for the unexpected?

Recent years have emphasized the importance of change management in navigating workplace challenges. Change management is a systematic process aimed at helping individuals and organizations adapt to shifts in goals, processes or technologies. It aims to implement efficient strategies to execute changes, control them and help people adapt with minimal hindrances.

Here are some factors to consider while you’re strategizing for change management:

• Digital adoption platforms to implement change
• Managers and early adopters as change agents
• Change as a part of company culture
• Data-driven approach to change management
• Humanized change
• Key performance indicators (KPIs) measure the success of the changes
• Risk assessments to identify potential risks
• Comprehensive communication plan development

A Forbes advisor article discusses the following principles of change management by Harvard Business School professor John Kotter:

Get representatives from across your organization involved at every stage of a change process—from identifying challenges and planning improvements to implementation and reflection.

“When the people in your organization are involved in identifying challenges and recommending improvements, they’ll understand the reasoning behind changed processes and new initiatives. They’ll be invested in improvement.

“Putting hard data behind organizational decisions is smart, but implementing change requires more. It also requires employees to be inspired by what the change will mean for their day-to-day work and the organization’s ability to fulfill its mission.

“You need both the technical skills to manage projects, make a plan and oversee deliverables; and the emotional skills to communicate a vision, inspire action and empathize with concerns.”

6. People Analytics

Key Question: Do you recognize the key areas of people analytics and how they shape overall job performance?

According to a SHRM’s Research, 71% of HR executives using people analytics say it’s crucial in their organization’s HR strategy.

A Forbes article describes people analytics as:

A data collection concerning human capital and workers’ performance within an organization. But this practice also turns information into actionable and meaningful insights that HR and PA specialists use to enhance business performance and employee experience.”

A report titled Impacting Business Value: Leading Companies in People Analytics highlights the following key areas in which people analytics add value:

• Diversity and Inclusion: For actionable insights on employee sentiment and to test improvements in employee experience, psychological safety, belonging and fairness.
• Employee Experience: For data-driven employee experience/listening to get a better “feel” of the organization.
• Retention: For information about the labor market, key competitor trends, risk factors with predictive models and more.
• Workforce Planning: To predict and plan for skills and workforce costs while managing existing costs.
• Talent Acquisition: For evaluating fairness in assessment and selection and the right hiring pace for the market demands of the business.

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7. Focusing On Employee Well-Being

Key Question: Are your employees showing signs of satisfaction or burnout?

Employee well-being has taken center stage over the past couple of years, and for good reason.

A recent Forbes article found that 76% of employees experience workplace burnout at some point, and 40% of US workers express that their jobs negatively impact their mental well-being.

Burnout isn’t just a minor hassle. It can harm overall performance, elevating turnover rates, increasing absenteeism and costing businesses 15% to 20% of payroll, primarily due to voluntary turnover.

So, when burnout seems high, it’s the first signal the organization itself, rather than individual employees, needs to make systemic adjustments.

The concept of “The Healthy Organization” has emerged to address these issues. This holistic approach focuses on physical health, mental well-being, financial fitness, social health, safe workplaces and cultivating a healthy culture. The Healthy Organization framework includes the following elements:

• Physical Health
• Mental Well-Being
• Financial Fitness
• Social Health and Community Service
• Safe Workplace
• Healthy Culture

It’s safe to say that transitioning to a healthy organization promises improved productivity, employee satisfaction and higher retention rates. Combatting burnout requires systemic adjustments, and transitioning to a healthy organization promises improved productivity and higher retention rates.

8. Diversity, Equity and Inclusion (DEI) in the Spotlight

Key Question: Are you prioritizing diversity, equity, and inclusion?

Diversity, equity and inclusion are buzzwords in most organizations, and rightfully so. DEI initiatives have become paramount in addressing workplace biases, discrimination, harassment, and disparities.

The Centre for the New Economy and Society reported that multiple U.S. companies have committed to enhancing their DEI, with 2,200 CEOs and presidents pledging to foster more inclusive workplaces. The global DEI market was valued at $7.5 billion in 2020 and will reach $15.4 billion by 2026. The need for DEI has also increased with the evolving work models — from in-person to virtual and hybrid environments.

Companies are increasingly investing in DEI, with 79% planning to boost DEI budgets in 2022. However, a mere financial commitment isn’t enough; developing DEI leaders is crucial to drive positive cultural change.

The report also noted that only 13% of senior executives proactively support DEI initiatives. Going forward, this highlights the need to develop more DEI leaders to positively change workplace behavior and culture.

According to a recent Forbes article, companies can use the following metrics to improve DEI:

• Recruitment metrics
• Hiring metrics
• Onboarding metrics
• Day-to-day activity metrics
• Compensation, advancement and retention metrics

Employee Resource Groups (ERGs) provide essential support for various groups, fostering an inclusive workplace. According to one report, these networks “provide a place for women, veterans, LGBT employees, people of color, people with disabilities, working parents and others to connect and help ensure that the workplace welcomes and supports their productivity.”

In the modern workplace, part of ensuring diversity and inclusion is overseeing AI systems. What steps can you take as an HR professional to minimize biases and foster diversity? Sahana Rao summarizes:

Collaborate with data scientists, ethicists and diversity experts throughout the development process to help identify and address biases. Also, actively test and validate models for incorporating DEI features and strategies. Further, implement regular bias assessments and audits to identify and rectify AI algorithms, ensuring transparency in AI decision-making. Promote human-in-the-loop systems for human oversight and intervention. Ensure regular sensitivity training on bias, diversity, equity and inclusion for the development team.”

Tips to Prepare for Changes

In a dynamic work environment, companies can never be prepared enough. Professor Steven Cates suggested some tips to strategize better for shifts in HR administration:

• Learning and developing efficient ways to engage employees. The traditional model of contacting employees sporadically doesn’t work, leading to a lack of engagement and motivation for employees to feel isolated.
• Daily “virtual water cooler and coffee pot” conversations for remote employees allow them to check in and address their concerns. It gives them a “voice” and an opportunity to seek ideas and exchange suggestions.
• Training, development and career discussions make employees feel wanted and suggest they have a future career with the organization.
• Checking in on employee mental health allows leadership to head off any major issues an employee might be experiencing.

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Embrace the Future

As the HR landscape evolves, companies must remain agile and responsive. Strategies for the future include engaging employees efficiently, fostering daily virtual interactions for remote employees, providing training and career development opportunities and regularly checking employee mental health.

The future of HR holds exciting surprises as it seamlessly integrates AI into recruitment, talent management and predictive analytics. By embracing these trends and preparing for the future, companies can ensure their continued success in this rapidly changing HR landscape.

If these HR trends have revealed problems in your organization that require HR tools, or you’re just looking to improve your HR software, check out our free comparison report to help you choose from the many products and features available.

Which stood out to you as the key HR trends for 2023? Share your thoughts in the comments below!

Contributing Thought Leaders