For a long time, organizations kept HR management strapped to the fringe of strategy. Workforce planning was divorced from business planning.
Gradually, organizations began tiding over economic downturns by keeping people practices at the center of strategy.
Then, the covid-19 pandemic struck. Businesses scrambled to stay afloat. The way people work- the way work is defined - changed. Many lost jobs.
And lately, artificial intelligence has gripped our imagination, even fueling paranoia around replacing human workers.
To embrace this new reality and turn uncertain times into avenues for growth, traditional modes of managing people are not enough.
HR, the catalyst, is the need of the hour. Not just as a change manager, but as a change agent.
Signaling the next stage in the evolution of the HR function, the HR catalyst can prove decisive for organizations battling uncertainties. They are proactive activists, empowering companies to adapt, evolve and thrive during challenging times.
Keka presents the ‘HRs as Change Agents, 2023’, which captures this evolving landscape for HRs to be catalysts. It covers the current state and the emerging trends in the spheres of technology, strategic HR and workplace.
The report draws on the survey responses of 1,969 business professionals, including 80% HR practioners. Among these 30% are HR managers, while 20% are HR heads.
Half the respondents belong to small and medium companies having an employee count of 5-200. Whereas 32% of the participants have a strength of 201-1,000 employees at their organizations.
Download HRs as Change Agents, 2023, report for free here.
- HRs find the task of convincing CEOs and investors for people analytics challenging today. Almost 32% respondents believe it’s HRs lack of understanding of people analytics that undermines their pitch in their first place. Today, most organizations use people analytics for recruitment (25%), employee engagement (20%) and performance management (20%).
- The most significant challenges in implementing people analytics today are data insufficiency or quality issues (23%) and limited analytical skills among HRs (20%).
- As many as 90% of the professionals are concerned about the ethical implications of AI in HR.
- Priority areas for the future use of AI in HR management include automating administrative tasks (27%), improving candidate sourcing and screening (20%) and virtual assistant and helpdesk (18%).
- Every two of three professionals believe both AI and the HR professional will coexist. Infact, AI may empower the HR function.
AI in HR Maturity Model
The Keka editorial team proposes the AI in HR maturity model that organizations could use to scale AI implementation in human resources management.
Stage 1: Reactive
Organizations use AI to respond to immediate HR needs and automate tasks. This represents an exploratory approach. It may include AI use in chatbots, applicant tracking systems and basic data analytics to report on HR metrics. The benefits include reduced costs and increased efficiency.
Stage 2: Operational
The thrust is on improving efficiency in HR processes. It may include automated resume screenings, sentiment analysis and AI-led performance management. Organizations may benefit from improved decision-making and productivity.
Stage 3: Integrated
Organizations embed AI in HR management to power the broader organizational strategy and improve the employee journey. AI deployment is to improve employee engagement and workforce planning. Predictive analysis may be used to cut attrition. This stage can strengthen the alignment of HR processes with business goals and boost organizational agility.
Stage 4: Transformational
AI use in HR is geared towards organizational transformation through proactive strategy and intelligence. Here, the focus on innovative HR practices help organizations overcome uncertainties and evolve with emergent trends.
Most organizations lie in the ‘reactive’ stage, while some are in the ‘operational’ stage. The transformational stage, the highest, represents a proactive system that aids change management. It is a blend of operational excellence with strategic oversight.
- Employee retention remains the biggest people challenge for organizations at 33%. Even before employee engagement, which is a hurdle for 29% of them.
- Major challenges in retaining employees today are competitive compensation and benefits (31%), growth opportunities (25%) and a positive work culture (18%).
- Close to 75% HR professionals find it difficult to cultivate business acumen.
- Most HR professionals hone business acumen by seeking mentorship and guidance from business leaders (33%) and engaging in cross-functional projects (25%).
- Strategies that could most effective in averting layoffs are reducing non-essential expenses (40%), implementing flexible schedules (26%) and implementing salary reductions or freezes (13%).
HR Acumen Fabrics for Business Impact
The Keka editorial team believes cultivating business acumen among HRs is a combination of elements that forms the ‘HR acumen fabrics’.
By focusing on the elements, in no defined order, HRs may prepare the fabric of business sense for themselves and their teams. This may secure HRs the strategic insight critical to resolving organizational challenges.
Practitioners may don the ‘HR acumen fabrics’ and operationalize it by integrating or weaving business sense into various steps of implementing initiatives. Workforce management could thus be aligned with organizational priorities. And HRs may make a larger ‘imprint on the business’.
Elements of ‘HR acumen fabrics’ are:
F – Financial literacy and data skills
A – Awareness of market and competitors
B – Business knowledge
R – Regulatory awareness
I – Insights into customers
C – Contextual foresight
S – Strategic thinking
HRs as Guardians to avert layoffs
HRs are the ‘guardians’ of both employee well-being and organizational health, especially during testing moments like layoffs. As proactive agents, they must first work towards ‘mindful hiring’, a conservative approach which links a business rationale to every recruitment decision. This can prove crucial during mass hiring decisions - often knee-jerk responses to economic trends - that may cause layoffs later.
Next, HRs must pull all stops at the business table to avert layoffs by pursuing alternative approaches. But when inevitable, they must manage layoffs with strategic prudence. Viewing ‘HRs as guardians’ can empower them to focus on employee well-being, sustaining a positive culture and preserving organizational reputation.
Each element of the ‘GUARDIAN’ view suggests specific strategies and actions for HRs so they could help steer organizations before and during layoff scenarios.
G – Guide leadership in managing crisis
U – Uphold employee welfare and well-being
A – Anticipate trends
R – Redefine roles for sustenance
I – Inspire confidence for action
A – Advocate for diversity
N – Navigate uncertainty with strategic insight
- Half the respondents believe all employees collectively are responsible for driving psychological safety.
- Major challenges in creating a psychologically safe workplace are lack of open and honest communication channels (35%), lack of awareness (29%) and fear of retaliation or negative consequences for speaking up (22%).
Just 32% of the organizations measure psychological safety.
- At least half the organizations use employee feedback to improve engagement.
- Around 90% professionals believe compensating HRs well can improve business outcomes.
- Most prominent factors contributing to work fulfilment and excitement are growth opportunities (31%), supportive and inclusive workplace culture (18%) and work-life balance initiatives (18%).
- Among the most significant causes of burnout among HR professionals are not being valued enough (39%), emotional exhaustion from dealing with employee issues (22%) and heavy workload (18%).
Reimaging psychological safety - Look at the bigger picture
Imagine employees as pieces of a jigsaw puzzle. Just as each piece has a unique shape, each employee carries distinct skills, experiences and behaviors. And only when organizations celebrate and reinforce the uniqueness each employee brings to the workplace can they excel.
This bigger picture is complete only when individual puzzle pieces come together, forming a cohesive whole. With even a single piece missing, the bigger picture is incomplete. So, valuing each employee for who they are - as indispensable carriers of talents and value - is essential to achieving the vision.
When employees feel valued and their voices are heard without the fear of retribution, they are likely to be more engaged, satisfied and productive. When leaders ‘look at the bigger picture’, they refrain from categorizing employee expression as a threat. Rather, they celebrate the expression of diversity, and picture an opportunity in it for organizational growth.
For the uniqueness employees exhibit, leaders must view them uniquely too. Puzzle enthusiasts examine pieces from all angles, focusing on how they fit the bigger picture and try to locate the right place for them. Similarly, managers must evaluate employee strengths, weaknesses and behaviors to find the right place for them in the organizational fabric.
Researchers at Keka have discovered that once leaders keep the bigger picture in mind, they start embracing openness, inclusivity and safety at the workplace. And this bears positively on business outcomes.
Glow to Grow
Locating employees at the center of engagement strategies can benefit organizations on multiple fronts. Engagement interventions may let employees ‘glow’, boosting their motivation, productivity and engagement levels. The glowing employee may then deliver their incandescence to different organizational locales, thus illuminating various growth factors’.
There are four ‘glow switches’, or critical engagement factors, surrounding employees that, when switched on simultaneously, make them ‘glow’ or become radiantly engaged’. These proposed switches are based on the survey results from the HR Katalyst summit, organized by Keka in June, 2023.
The four ‘glow switches’ are supportive leadership, positive organizational culture, meaningful work and growth opportunities. When these are ‘switched on’, that is operationalized through interventions, employees may experience a greater connection to their work.
But two of the ‘glow switches’ can be key differentiators for organizations in their desire to creating attractive workplaces. These are fostering a positive organizational culture and providing growth opportunities.
The radiantly engaged employee ‘illuminates’, or activates, various organizational ‘growth factors’. These factors, when combined, may help organizations ‘grow’ and acquire a sustainable competitive edge.
Switching on ‘glow switches’
1. Glow switch: Supportive leadership
- Growth factors
- Revenue boost
- Calculated risk-taking
- Exploration and proactive problem-solving
2. Glow switch: positive organizational culture
- Growth factors
- Synergy and collaboration with other functions with feedback mechanisms in place
- Better brand image
- Increased productivity
3. Glow switch: Meaningful work
- Growth factors
- Innovation and creativity
- Employee citizenship
- Customer satisfaction
- Ownership of tasks and accountability
4. Glow switch: Growth opportunities
- Growth factors
- Employee retention
- Ready leaders
- Organizational agility
Bottle Down to Destress
Imagine HR professionals as water bottles, with the amount of water inside representing stress levels. The more water in the bottle, the greater the stress level.
When HRs ‘bottle up’ stress, it can gradually raise the stress levels to cause burnout. Worse, the stress may spill over (full burnout) to impact others, damage work relationships and affect organizational health.
The ‘Bottle Down’ framework can help destress HRs and avert burnout. Stress can be managed by calibrating organizational destressors to let out stress depending on the intensity of stressors.
The top of the bottle represents the entry point for organizational ‘stressors’. These could be aggressive targets and unrealistic expectations, emotional labor and exhaustion, lack of recognition and change management.
At the bottom of the bottle, outlets serve as mechanisms for HR professionals to destress. There are a variety of destressors that may be deployed as outlets for specific individuals and teams.
The intensity of the destressors can be calibrated based on the flow of stressors. In other words, when stressors’ intensity is high, HRs may need more intensive or frequent access to destressors.
This is to maintain an optimal range of stress, necessary to function as an HR professional. This healthy range may fuel motivation and productivity. It may challenge HRs without overwhelming them. This is the ideal water level in the bottle. To maintain this, destressors must always be present and not be deployed reactively.
HRs and their leaders must regularly monitor stress levels through observable behaviors and performance metrics. The critical stressors have been derived from the surveys conducted during the HR Katalyst summit. These are accompanied by suggested destressors.
Download ‘HRs as Change Agents, 2023’, report for free here