Modern trends in HR

T. Vijayabaskar

Management Department Eastern University, Sri Lanka

HR Management is a quickly evolving business function with many modern trends.

HR trends are usually focused on improving the overall business performance and to keep the best talents in the organization.

The HR trends are driven by technology improvement, new trends in outsourcing and by the war for the talents.

The organization innovates their HR processes and sometimes a new HR Best Practice is born and it spreads quickly among the competing organizations.

The modern HR trends can improve the daily practice of HR professionals and they can increase the performance of the HR Team and the whole organization.

The HR trends have to be carefully watched as the HR team can improve its services provided to the internal customers and the organization can become more competitive on the market.

Sri Lankan organizations are also witnessing a change in systems, management cultures and philosophy due to the global alignment of Sri Lankan organizations.

There is a need for multi skill development. Role of HRM is becoming all the more important. Some of the recent trends that are being observed are:

n The recent quality management standards ISO 9001 and ISO 9004 of 2000 focus more on people centric organizations. Organizations now need to prepare themselves in order to address people-centred issues with commitment from the top management, with renewed thrust on HR issues, more particularly on training.

n Charles Handy also advocated future organizational models like Shamrock, Federal and Triple I. Such organizational models also re-focus on people-centric issues and call for redefining the future role of HR professionals.

n To leapfrog ahead of competition in this world of uncertainty, organizations have introduced six- sigma practices. Six- sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. These practices improve organizational values and helps in creating defect free product or services at minimum cost.

n Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization. Exult, the international pioneer in HR BPO already roped in Bank of America, international players BP Amoco and over the years plan to spread their business to most of the Fortune 500 companies.

n With the increase of global job mobility, recruiting competent people is also increasingly becoming difficult, especially in India. Therefore by creating an enabling culture, organizations are also required to workout a retention strategy for the existing skilled manpower.

Compensation modern trends

The compensation and benefits area is not that trendy as the recruitment area. It is more about the overall stability of the processes and the trends are not that visible and quickly changing.

The internet brought new trends mainly to the area of benefits. The companies left the policy of making the strict offers to its employees and they started to offer flexible benefits organized in the Cafeteria System.

The Cafeteria Benefits Systems were extremely modern and all large organizations had to introduce them to stay competitive in the job market.

The people were talking about their flexible benefits and their budget they can spend. It was a killing moment. The budget made the benefit package comparable with the competitors. Later, the companies found out, the total flexibility is not the right solution.

The idea of a total freedom given to employees failed as they did not spend money as their own money, but as a nice extra gift.

The compensation modern trends are mainly about not compensating people and limiting the number of employees in the organization. The rules how to calculate the overall performance of the company as diving the net profit by the number of employees makes the organizations to play the nasty game with outsourcing of many activities.

The newest modern compensation trend will be about the return to the roots and making the compensation and benefits working for the whole organization and its shareholders.

The organization will focus on the overall performance again and the compensation and benefits will have to support the effort to achieve new performance target. It will be the trend.

HR front office future

The current HR Organization will have to be reviewed in the future. The HR Director is lost in the difficult relationships his/her subordinates build internally and externally and the chance to manage the relationships does not exist at all. The HR Front Office coordination is difficult.

The management of customer expectations is a mission impossible in some organizations. The HR Model of David Ulrich was built for the ideal world and cooperative organizations, not for the management fighting for its staff.

The HR Management will have to shape the role of the HR Front Office as it does not build a network of high expectations, which are not aligned with the overall HR Strategy.

The HR Front Office responsibility to make promises has to be limited and the responsibility to approve has to be taken out of the HR Front Office as the HR Director has the right to decide.

The role of the HR Front Office will be redefined and it will be the modern trend for the improvement of provided HR services.

The idea of the independent HR Front Office is excellent, but the HR Front Office has to live in the frame of Human Resources, not in the environment of their internal customer.

The customer can have a lot of wishes, the HR Front Office has to align the wishes with the reality and the HR Strategy. It will be the trend of the near future as the current HR Front Office model does not work in many organizations.

HR reporting trends

The HR Reporting or HR Controlling are extremely important for the future of human resources and the whole organization. They collect a lot of data and they produce the HR analysis with the value-added to the HR management and top management of the organization. Or, they should do so.

HR Reporting offers the evidence of efficient performance of the organization and reports the gaps to be filled.

Historically, the no-confidence existed between HR Reporting and Financial Analysis as the data from Human Resources were too soft for them.

The Finance Department did not trust the data as they changed too frequently and it was very hard to explain the trend.

Building the trust in the data from HR Reporting is a goal for Human Resources. The data without a trust does not exist and they are always discussed. The HR Reporting has to cooperate with the Finance Department as they can trust to the presented results.

When the HR Reporting has a trust of Finance, nobody from the top management will discuss the presented numbers and recommendations.

The HR Reporting has to shift from the reporting function to the function with sophisticated recommendations to the top management.

The recommendations from HR Reporting can hugely influence the future of the organization and the managers will start to ask for the opinion of Human Resources and its perspective.

The HR Reporting will be the heart of the HR Team and the HR Front Office will start to ask for the results of its analyses as they can make a good recommendation to the internal clients.

HR trends and HR Best Practice

The modern HR Trends are not the same as the HR Best Practice. The HR Trends are about the future of the HR business, the HR Best Practice is about the HR approaches, which work.

The modern HR trends are driven by the progressive organizations, mainly from the modern industries, where the organizations have huge margins and they are forced to compete for the best talents on the job market.

As they have to design and develop excellent programs for their employees and managers to keep a high level of the overall employee satisfaction, they always find new HR Trends.

The HR Best Practice is used for several or many years and it sets the best practice to be followed as the results are recorded and the managers and employees value such a practice from human resources.

Recruitment HR trends

The recruitment is one of the most innovative HR processes. The Internet changed the whole recruitment industry from one day to another as the people discovered the speed and simplicity of the Internet job portals (E.g. www.topjobs.com) and they started to apply for not just one single job, but they applied for many jobs at once.

The recruitment process had to be adjusted as the HR stayed trendy.

Today, some forms of the traditional recruitment approaches are almost dead. Who reads newspapers and looks for the job by the mail? When did you send your last letter (handwritten)? Do you fax today?

The trend in the recruitment industry was about the speed and simplicity of the recruitment process for customers.

The job applicants were ruling the playground and the companies were lost in thousands of useless job resumes.

The HR Trend changed as the organization wanted to use internet recruitment with the value added and several solutions evolved. But they are not that successful as they wanted to be.

The winners of the war are the social networking sites. The social networking site offered recruitment as a value addition and it was not one of the initial goals for most of them.

It is a trendy danger to them as the best job candidates can start to disappear. They are attacked by many job offers when they just want to meet their old school friends.

The next trend in the recruitment and staffing will be about a higher granularity of the job websites. The specialized websites will definitely discover their potential to recommend the best people to the organization.

The people will be specifically targeted by the specialized headhunters, who will have the benefit of knowing them all personally and the recommendation of the headhunter will be taken as the main recommendation.

The organizations have to monitor the modern HR trends in the recruitment area. They should adopt their processes to build from the modern trends the additional recruitment sources. The modern recruitment sources should not become just recruitment sources for the organization.

Newspaper advertising still works best.