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By: Ber Leary on December 8th, 2020

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What Will HR Look Like in 2021?

Business Management & Strategy | COVID-19

This year, we all learned a lot about ourselves. Employers got to see people at their best, showing astonishing reserves of courage, commitment, and resilience. People got to see how quickly their employers could innovate and respond to an unprecedented crisis.  

It was also a year in which HR really shined. During the first wave of Covid-19, HR moved mountains to help ensure a successful transition to remote working. When the Black Lives Matter movement forced a long-overdue conversation about belonging and inclusion, HR helped facilitate that conversation within the professional sphere. And during the most unpredictable of years, HR professionals stayed focused on their duties of hiring, training and creating an outstanding employee experience.  

Hopefully, 2021 will be less turbulent than its predecessor. That said, some intriguing developments will define your approach to human capital strategy in the coming year.

Here are the top HR trends to keep an eye on. 

1) Adjusting to flexible hybrid teams 

Even when the coronavirus recedes, we’re unlikely to return to the traditional office any time soon. Before the pandemic, around 5% of workers performed their duties primarily from home. After Covid-19, it is estimated around 20% to 30% of professionals will keep working remotely.  

This change has a huge practical effect on the composition of the workforce. Many teams will be hybrids of on-site workers, telecommuters, and people who split their week between the two. As remote workers become the norm, companies will cast their recruitment net wider and start acquiring talent from all over the world.  

For HR, this will mean conducting core processes like interviews and appraisals over Skype and Zoom. It also means rethinking the employee experience for people who aren’t in the office. Managers will need to reconsider communication and team-building to ensure no one is left out.  

2) Diversity and inclusion become non-negotiable 

Over the past decade, society has been through some difficult and transformational conversations about race, gender, discrimination, and social exclusion. Most companies have reviewed their HR processes in order to foster diversity and remove hiring bias.  

In 2021, everyone will need to go a step further. For the first time, the Fortune 500 list will include diversity and inclusion rankings for each company. These self-reported stats will allow customers and investors (D&I) to make decisions based on the company’s commitment to social justice.  

This will put pressure on all employers to be more transparent about their approach to D&I. From  HR’s perspective, this means tackling bias, creating better retention programs, and improving complaint handling processes. Most importantly, organizations will need to look at their approach to leadership development. Diversity programs often fizzle out before they reach the C-Suite. In 2021, that has to change.  

3) Generational changes picking up pace 

In 2020, more Boomers retired from the workforce than any previous year. 40% of this generation has now retired, with the others expected to depart the workforce before 2030 

The Boomer migration is one of the great demographic shifts in US labor history. Boomers still occupy a substantial proportion of leadership roles, and there are fears that the smaller Gen X demographic may not be able to replace them all. For companies who don’t have adequate succession planning, this is a worrying trend.  

HR will also have to continue to find new ways to attract and engage members of other generations, especially Gen Z. These younger workers have very different ideas about technology, hierarchy, and the work-life balance. Building a suitable culture is a challenge – especially if that culture must also accommodate Gen X and Boomers.  

4) Digital transformation makes for semi-automatic hiring 

Companies like Amazon have introduced a no-contact hiring system for warehouse roles, allowing candidates to go from application to onboarding without any human interaction. While this approach may likely not suit most employers, it does show how much technology has changed the hiring process.  

Applicant tracking systems are increasingly capable of handling much of the mundane work of hiring – screening resumes, matching talent profiles, vetting questionnaires. These systems also offer a rich source of data that can provide you with a deep insight into your hiring process when processed with data analytics techniques.  

Such systems are not without their drawbacks. AI-powered hiring can, in some circumstances, miss out on great candidates and even exacerbate diversity issues. The human touch is still absolutely required. But great HR experts armed with great tools will scoop up all the best candidates in 2021.  

5) Business resilience will dominate 2021 planning 

It’s still impossible to predict the long-term effects of Covid-19. On the one hand, the economic fundamentals seem healthy and there’s a reasonable hope of a recovery in 2021. On the other hand, entire industries have collapsed, while unemployment has soared. Uncertainty is the only certainty right now, which is why there’s a growing focus on business resilience.  

Resilience is a balancing act. Companies may need to reduce labor costs if there are lean times ahead, but companies also need a supply of smart, innovative people who can help them grow their way back to prosperityHR plays a vital role here, as they can identify necessary staffing changes while delivering professional development to help the team level up.  

A recent Deloitte study outlines a five-step plan for building a resilient workforce  

  1. ReflectLook back on the successes and learning opportunities of the pandemic response. 
  2. RecommitCommit to a focus on the well-being and purpose of everyone on the team. 
  3. Re-engageProvide people with the skills and resources they require while helping them to understand their role in the larger strategy. 
  4. RethinkConsider your new business resilience commitments and ask how HR can help to implement strategy. 
  5. RebootStart a new human capital strategy that supports plans for long-term growth.  

Even if 2021 is rough, it’s likely that things will pick up as the decade progresses. That’s why companies need to think about resilience now. The right HR strategies got companies through the pandemic. A good strategy will help us get through whatever the next year has in store as well.