The future of HR is here: how can businesses adapt?

Here, Donal Laverty and Jonathan Richards explore what the future of HR looks like and provide tips on how businesses can get on the front foot.

Change is happening all around us. There’s no escaping it. In fact, research reckons that changes in the global economy are happening ten times faster and at 300 times the scale, or roughly 3,000 times the impact than during the heady days of the industrial revolution. And with businesses racing for change, wanting to be the next big disruptor, it’s hard to keep up.

From a people perspective, we’re seeing a new rhythm to organisational life emerging. Businesses are more people-centric than they ever have been. The wellbeing of employees is fast becoming a differentiator as well as a recruitment and retention tool to lure talent in and keep it.

Suppliers are latching onto this trend. Just look at the 30 per cent growth Vitality, a health insurance provider, enjoyed last year. Their app offers employees rewards in return for completing physical exercise and becoming healthier. It’s being embraced by employees who also get subsidised gym membership. And of course, business owners benefit from a healthier workforce who take fewer sick days and have a higher level of productivity.

However, with research suggesting that finding the right talent and keeping it is going to be one of the big business challenges in 2017, even more attention needs to be given to the heart of the company – its people – it is the most vital organ in the body after all.

Companies are changing and HR needs to adapt

While the change can be exhilarating, it can also create turbulence. Unique business models that shake up the market, such as the gig economy, are prime examples of change creating waves. Take Uber, at first celebrated for offering flexible working but soon derided for exploitation and very little workplace protection. It’s a classic case of businesses embracing change but thinking about its people too late, and the all-too-common belief that HR isn’t a necessity until it causes a problem.

Related: Outsourcing your business HR: when to do it, the benefits and the pitfalls

Interestingly, most of us use the term HR without actually thinking about what it means, and when asked to explain, may not have much to say. That’s why HR is being replaced with something more digestible – employee experience. A strategic function with the primary purpose of unleashing human potential.

But is people management being left behind?

As Uber demonstrates, new business models may be emerging but if the way in which organisations manage their people doesn’t keep up with these changes, it can cause problems. The organisational structures of the past, built on a hierarchy that started at the middle and sprawled outwards, like you would imagine a tree in winter, aren’t suitable for the companies of the future.

As organisations develop from an authoritative management style to a more participative model, people management should understand and reflect the aspirations of employees. An employee-centric approach that promotes agility, resilience and sustained high performance will be vital to organisational success. Businesses of all shapes and sizes need to catch up with this change.

Indeed, a significant factor in four in ten small businesses not making it past five years is poor people management. An overwhelming amount of small businesses do not grasp its importance; many assume being a small business they don’t need it. In reality, whether you’ve got two employees or 20, you’re doing people management. You’ve got talent to look after and people are complex beings, so there’s a lot of work involved.

Staff are now the key priority for all businesses, a new way of managing and developing talent has emerged. So how can small businesses adapt to this change? Below are some tips to ensure your businesses don’t fall by the wayside.

Tip 1: Encourage a collaborative workforce

Every business begins as a start-up, however, only a handful make it further. Small businesses that create connected and collaborative workforces, rather than teams working separately, will ultimately produce the best outcome. Picture a cobweb rather than the tree in winter. A connected workforce encourages employees to work as a team on projects, allowing them to bounce ideas off one another and improve co-worker relationships. Humans are social beings and businesses should capitalise on that.

Tip 2: Shift towards accountability and outcome-focused

Additionally, we’re seeing an increased focus on outcome and accountability for individuals in the workplace. Promoting accountability not only allows employees to feel they have a say, giving them more responsibility, but it is incredibly empowering and motivating, resulting in getting the best out of your people.

Tip 3: Look after your people and stop worrying about admin

Focus on your people – rather than paper – by using technology. Now more than ever, line managers and HR specialists should embrace the array of technology tools on the market. These tools take care of the mundane administrative tasks – such as absence forms and expenses – and automate the process. This saves employers, who manage people, time, allowing them to focus on a more strategic role in ensuring employees are developing and growing to their full potential. This also takes out the element of human error, and frees up employees time, allowing them to focus on more rewarding tasks such as business development.

Tip 4: Data-driven decision making

Additionally, businesses should use data to drive better decision making. Instead of making decisions based on hunches, businesses can make more definitive choices and back these up with data. For instance, looking through your sick leave data, is there a correlation between more sick days and employees not taking their full holiday? Data can spot trends that business owners might not have thought of. It may even encourage longer holidays to reduce the number of sick days taken and increase that productivity.

So regardless of whether or not you’re in the gig, access or as yet unnamed economy, you can’t overlook people. Every employer has the responsibility to look after its employees. And the more fulfilled your workforce is, the better results they give, the longer you will hold on to them and the easier it will be to recruit.

With the ever changing business landscape, companies that can free themselves from administration, focus on employee experience and give themselves the time to have high-quality conversations with their people will make it past those first five years.

Jonathan Richards is CEO at breatheHR, and Donal Laverty is partner at Baker Tilly Mooney Moore.

Further reading on HR for businesses

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

Related Topics

Small Business HR

Leave a comment