HR Trends in 2021

HR has undergone a huge transformation in recent years. An industry once focused on administration and efficiency has now become strategic and data driven.

The successful human resources department of today leverages technology to provide solutions for companies and the future of work. This means HR trends are forever evolving to suit the changing needs of businesses.

2020 saw the biggest disruption to the world of work that we have faced in our lifetime. The Covid-19 pandemic has redefined where and how we work, normalising flexible working and accelerating our dependence on technology and automation.

The HR industry, like many others, has had to overcome critical challenges, adapting faster than ever before. But even as we move towards a post-pandemic world, it’s clear that many of these changes are here to stay. Today’s HR trends are driving transformation and impacting how we will work in the future.

Here are the HR trends that will shape the industry in 2021 and beyond.

1. Remote working and the rise of the ‘hybrid-office’

The transition to remote is perhaps the biggest effect of the pandemic on the world of work. Many companies have vowed to continue this trend into the future - big tech organisations such as Microsoft, Facebook and Slack have all embraced flexible working, announcing that they will continue allowing their employees to split their time between the office and home post-pandemic. Twitter has gone one step further, vowing to let staff work from home forever, if they desire.

One study suggests that 65 per cent of workers want to continue home working after covid. This is hardly surprising, as home working can have huge benefits for employees and provide a better work-life balance. Without a daily commute, employees can save money and dedicate more time to activities like exercising and cooking. However, this shift away from office-centric culture will not just have a profound effect on workers, but on commercial areas in towns and cities. Less office workers will mean less demand for restaurants, bars, shops and other services catering to commuters.

Research has shown that more than 20 per cent of the workforce in advanced economies could effectively work remotely three to five days a week.  However, it should be noted that more than half of the world’s workforce has little or no opportunity for home working. This means that an increase in remote work will risk accentuating social inequalities and disparities in well-being, particularly in future pandemics.

For those that have the luxury of working flexibly, the ‘hybrid-office’ will become a trend moving forward. This combines corporate headquarters with home and satellite offices, giving employees the freedom to choose where they work. Co-working spaces within organisations may also become popular – rather than being assigned desks, staff will book workspaces in advance when planning to come into the office.

2. ‘Digital-first’ work becomes the focus

The workplace is undergoing a technology revolution – thanks to remote working, tech is more critical to business success than ever before. This trend means that companies and managers are looking for solutions to make the remote workplace more productive, effective and connected. A ‘digital-first’ work approach means looking to digital solutions first for any opportunity or challenge and working through tech rather than being assisted by it. In 2020, a staggering 306 billion emails were sent every day, but businesses are still losing a month of productivity every year by not utilizing technology effectively.

A recent Deloitte report has highlighted the importance of work design in supporting remote work arrangements going forward. In their survey of executives, ‘introducing digital collaboration platforms’ was found to be the most important factor in creating a sustainable remote working environment. These platforms such as Notion, Slack and Google Docs allow HR departments and other professionals to collaborate with teams across different time zones, and are crucial for successful remote working.

Another trend will be the demand for tools that work across a variety of different platforms, analysing pieces of information, skills and expertise that are shared. For this, AI will be used to pull data insights from existing tech infrastructures. Companies should also look to invest in the digital upskilling of their workforce, with unlearning and relearning becoming the norm. Technology can then be adapted and applied to solve new issues and leveraged to maintain employee engagement.

3. Virtual teams are adapted and improved

How do you implement virtual training? How do you prepare a new employee to work with a team they’ve never met face-to-face? These are just some of the challenges facing HR professionals during remote working. The trend of virtual teams goes hand in hand with that of virtual work, and these teams must engage and motivate employees, encouraging communication and creativity.

Deloitte have predicted that ‘superteams’ will become the future of work, combining people and tech to produce quicker and better outcomes.  According to their report, the top factors contributing to a successful superteam include ‘a culture that celebrates growth adaptability and resilience’, ‘upskilling, reskilling and mobility’ and ‘implementing new technologies.’ HR managers will need to mitigate physical employee distance with harmonised work schedules and the use of interactive media for effective communication.

Team cohesion and trust can be further improved by investment in team building exercises and support for those who might be struggling with remote working. By clarifying roles and establishing team leaders, coordination and communication will further be enhanced.

4. HR design is shaped for the future

‘Organisational design and change management’ has been identified as the second most important priority for HR leaders in 2021. Managers and leaders feel they are not being equipped to lead change, while employees are fatigued from all the change they have had to overcome. Work design, traditionally focused on efficiency, has left many companies with inflexible workflows and structures. In many cases, these do not meet today’s needs and are not adaptable enough. This means that organisations cannot react quickly enough to changing conditions – leaving teams overwhelmed and suffering the effects of work friction.

Work design needs to be updated to ensure that employees can be more responsive, in sync with customers and can anticipate changes in their needs and adapt to them. It’s HR leaders that have the power to overhaul these workflows, aligning design with the way work happens, clarifying work boundaries, moving resource decisions closer to the end user and formalising flexible processes.

The trend for shaping organisations of the future will include designing the new and altered jobs demanded by automation, and identifying new capabilities and requirements from the world of work. For this, the HR toolkit needs to be revisited and HR professionals reskilled as necessary. Investment in collaboration tools, adapting expectations for schedules and meetings, leadership training and access to tech are all crucial for future work design.

5. The employee experience is evaluated and refined

It’s no secret that focusing on employee experience has huge benefits for staff and companies as a whole. If positive, it can improve productivity and satisfaction and lead to greater loyalty and investment in a company and its goals. However, due to remote working, the employee experience has been massively altered. This trend means that HR managers are facing more challenges than ever before to ensure that staff are fulfilled and achieving their potential.

For both new and existing workers, the employee experience has been reshaped and redefined. Formerly in person relationships now take place over video or email, leading to changes in relations and dynamics. For new hires who cannot meet colleagues in person, digital onboarding experiences and training sessions are crucial. HR managers need to ensure these programmes help new employees to build internal relationships and create meaningful connections with their teams.

Employees need to feel supported and listened to, especially when they are working remotely. However, challenges such as unclear role expectations and hybrid team working can cause issues. Rather than relaxing expectations and accountability, managers can empower employees to reset their goals and priorities. By implementing development plans and clarifying career paths, managers can also highlight opportunities for growth within an organisation.

6. Mental health is more important than ever

The pandemic has had a worrying effect on the mental health and well-being of workers around the world. In the first half of 2020, up to 35 per cent of employees reported experiencing depressive symptoms often, 41 per cent reported work burnout 45 per cent said they felt ‘emotionally drained from their work.’  In fact, one study has shown that the pandemic caused mental wellness among workers in the UK and US to fall by 27 per cent.

In line with this trend, companies need to commit to investing in mental health for the future well-being of their employees and deliver on this investment. They can do so by providing mental health resources, offering virtual support and waiving or reducing the cost of services. Managers can motivate their teams by recognising workers’ achievements and showing appreciation and acknowledgement for the work that they do. By revealing their own vulnerabilities, managers can show that they understand the stress and anxiety felt by their team.

Encouraging employees to get outside, partake in physical activity and connect to nature can also be hugely beneficial. When rules allow, meetings or team building exercises can be organised in parks to encourage employee engagement and socialising.

7. DEI (diversity, equality and inclusion) is championed

Inclusion and diversity issues are a huge part of the work undertaken by HR - whether they are addressing bias in the workplace, working to close the gender gap or investigating discrimination. The killing of George Floyd in July 2020 and the subsequent protests against police brutality lead to many companies pledging to tackle racism and promote equality. Last year, a survey of more than 1,000 CEOs indicated that 81 per cent of businesses had or will publicly announce new measures against anti-black racism within their firms. However, it’s clear that far more needs to be done to combat systemic racism in the workplace - recent reckonings at mega corporations such as Condé Nast are proof of this.

Steps also need to be taken to improve gender diversity within organisations, with the pandemic disproportionately affecting women workers around the world. Because of covid-19, women in the US are now more likely to leave their jobs than men. In the UK in November 2020, the unemployment rate for women was 17 per cent, compared to 13 per cent for men. Many women have lost confidence in their work - one UK study found that 67 per cent felt less confident in their ability to progress in their career than men, and 133 percent less confident in their ability to improve their financial situation in the next six months.

For black women, the situation is even more critical. Since the start of the pandemic, black women in the US are more likely than any other employees to think about leaving the workforce because of concerns over their health and safety. They are also twice as likely as women overall to say they can’t bring their whole selves to work, and more than 1.5 times as likely to say they don’t have strong allies in the workplace.

HR managers need to work to address these issues of inequality so that the future of the workplace can be safer, more supportive and provide equal opportunity to those who are discriminated against.

8. HR shifts to focus on an outside/in approach

Traditionally, HR has been viewed as a support function, working in the background to ensure an organisation is running smoothly. However, Dave Ulrich – known as the ‘father of modern HR’ – believes that human resources must instead adopt an outside-in approach to how it operates. This trend means that instead of focusing solely on employees, HR needs to deliver value to stakeholders outside of the company, such as customers, investors and communities.

HR has advanced in thinking as business priorities have developed. Traditionally, it focused on efficiency and the cost of hire per employee. The quality of HR practices like training and hiring then became key, until the priority shifted to strategic HR. Now, an outside-in approach is also necessary to respond to changing business conditions. According to Ulrich, ‘HR is not about being the employer of choice, but the employer of choice of employees customers would choose.’

Ulrich also champions the concept of HR guidance, delivered using an organisation guidance system (OGS). This identifies desired outcomes related to four critical business success spheres: talent, organisation, leadership and human resources. OGS can inform choices about how to best reach these outcomes. This shift from the descriptive to the prescriptive starts with desired outcomes from key stakeholders inside and outside of the company.

9. Internal talent mobility and upskilling is encouraged

Instead of looking to attract outside talent to fill vacancies, companies should reflect inwards on existing employees. Emphasis on internal talent development and mobility has the potential to solve one of the most critical challenges facing companies. In fact, in 2020, a report found that CEOs view the talent risk as the top threat to growth within their organisations. The trend for reinventing job roles and redeploying existing workers means that the search for talent becomes far more efficient.

In half of the companies surveyed by Deloitte, anywhere from 50 per cent to 100 per cent of employees will need to change their skills over the coming three years.  Equipping workers with the right tools and skills they need to progress can help to retain employees, boost morale and cut costs on recruiting and onboarding. Support should be given to assist workers and organisations to adapt to uncertainty and developing technology, such as in areas of AI and robotics.

AI is also being used within companies to find new employees and to engage and retain existing staff. Career development platforms allow workers to build profiles, see the range of jobs suitable for them, explore career paths and connect with mentors. These platforms are able to recognise low demand areas of the business, redeploying employees from there to areas of high demand.

10. HR is driven by data and people analytics

Almost three quarters of UK based CEOs believe that HR analytics are key to enabling strategic decision making. Harnessing the power of people analytics enables HR professionals to stay competitive, assess current and future workforce demands, recognise skill gaps, ensure diversity in the workplace and more. An HRIS can provide easy access and analysis of data, meaning HR can make informed decisions and implement successful strategies.

The trend for utilitising people data provides HR solutions not just for today, but for the future of a company. Organisations can use the information to build long-term planning strategies for their workforce, predict demand for expertise and save costs on learning and development. Humaans’ insight feature, for example, provides a comprehensive overview of company trends, enabling HR professionals to monitor and analyse key data with ease.

Many of the HR trends of 2021 have been shaped by Covid-19 and its effect on the world of work. Adapting to the challenges of remote working has made digital solutions integral to the successful operation of teams and businesses. The pandemic has also emphasised the importance of positive employee experience and well-being, and has further highlighted inequalities and discriminations in the workplace. HR design is being shaped for the future, where companies will look inwards for talent acquisition and HR will look outwards to deliver value to stakeholders. Finally, HR will continue to be led by data and analytics, encouraging strategic decision making.

By understanding and implementing these trends in the workplace, HR professionals can ensure they are providing the best solutions and support for the companies and employees of today and onwards.

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