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The Future of HR and Talent Management – the next 5 years

January 12, 2014

Pushing HR

 The HR function is at an inflection point and I believe that in the next 5 years we will see significant transformation of the function. There are some key trends that will influence this transformation.

For the first time in history, talent scarcity is a global phenomenon. Across the developed and emerging markets there will be a shortage of skilled and appropriate talent. The VUCA world makes for a demanding environment for leadership and decision-making. Organizational survival has never depended so much on dynamism and rapid reaction times, all demanding human intervention and decision-making. Social media and the talent scarcity is enabling global mobility of talent. At the same time, the reconceptualization of HR function has created a need for new skills. Here are my thoughts.

Here’s how I believe HR will evolve to respond to these challenges:

1. Redefining talent: From the manager (or one level below) upwards, every employee becomes valuable. The percentage of employees an organization would need to ring-fence and ensure succession for, will increase. Even more important the value of the steady performer will increase manifold and will carry greater value than ever before. This will start with bell curves being redefined but, it will mark the beginning of the end of the bell curves. Aside from the bottom 10-15%, every employee will be considered vital for retention. This will create a GlobalTalentstrain on understaffed HR functions and old-world processes. By necessity, demanding a new way of managing employee development.

2. Diversity: The Talent gap is going to accelerate the movement for greater focus on diversity. The importance of women as 50% of the population and thereby, the workforce will be amplified. The focus on employing the differently abled, will gather momentum.  HR and leadership will have to get comfortable with this, as well as empower this movement. We will see organizations taking decisions on talent that delay the gratification of an immediate or accurate fit, in favour of “doing the right thing” but also ensuring sustainability. Diveristy will cease to be a flavour and will become a competitive differentiator.

3. Training gets redefined to capability development: The measure will move (and has already begun) from training days to acquisition of capability. The function will be held accountable for ensuring development of capability, which will necessitate a shift in deployment. The 70:20:10 principle will start being implemented in spirit. I believe that something I have long awaited i.e backward integration in the services industry will begin to become a reality with organizations beginning to play an active role in owning development of entry-level talent by taking ownership of the education space. I am hoping to see IT companies buying or setting up engineering colleges, defining curriculum and turning out employment ready graduates. Just the way steel and power companies are buying into coal-mines.
4. Talent acquisition becomes global: The scarcity will mean, organizations will have to cast a wider net for talent and take the search to the source. As a result, there will be a greater need to ensure consistency and standardization in hiring processes and criteria; especially to establish role & culture fit. This will drive process change. Reliance on global 3rd party assessment firms will increase. The value they bring will be: global benchmarks across roles, standardized assessment and selection methods, a consistent lens to assess diverse individuals. Assessment at hiring and promotion will become the norm.

The HR function will need to bolster their budgets to support this. The long-term savings in terms of lower attrition, greater efficiencies and more engaged employees will offset these costs. However this will not be evident in a majority of the organizations due to lack of adequate HR effectiveness measurement systems.

5. Global Talent Management: Organizations will move away from federal/regional/local talent management structures. Talent will become a global priority and will be managed centrally. Organizations will want to and NEED to have a collective view of the talent that is available to them globally and develop processes that will support and facilitate movement of talent across businesses, locations and regions. This will further increase the global mobility of talent. The world will be truly flat…and equal!

The new challenge will be to work with regulators and government to co-create employment laws and visa regulations that enable this. In the recent past we have seen more and more nations closing doors and making talent mobility more difficult.
6. Performance management: There is enough research that now proves the inefficacy of a pay for performance process beyond a certain threshold – here’s Daniel Pink’s MUST WATCH insightful take on the subject. Gen Y, with their different value systems and a more enlightened employees base will drive a change in performance Talent Manegementmanagement. The carrot and stick, the “If you make me rich, I’ll make you rich” paradigm will die a death across most contexts. Financial reward mechanisms will be questioned and modified. Organizations will develop processes that help elicit and integrate personal aspirations to organizational objectives. While performance conversations will continue to be relevant for coaching and development, purpose and meaning conversations will become increasingly important for employee engagement, retention and leveraging entrepreneurial spirit internally. The employment contract will shift from quid-pro-quo to mutuality and partnership. 
7. Talent Acquisition becomes Talent Resourcing: The fact that talent is spread globally or across locations. The fact that acquiring talent will become more difficult. The fact that cultural fit will become a greater challenge (read about Gen Y). Will mean that organizations will need to get better at identifying talent within. The outward looking Talent Acquisition function will metamorphose into a Talent Resourcing function. Look within before you search outside, will be the new mantra.
8. Analytics and accountability: HR is the last frontier. Every other function in an organization has evolved to a level where their contribution and RoI is directly measurable. HR is now, the last remaining function that is not measured with the same rigour. With the advances in big data and analytics, we will see this change. For the better. This will help organizations realize the value that HR adds. It will enable HR to get what they always clamour for “the seat at the table”. At the same time, it will expose the gaps in the function and will demand greater accountability for impact. This will demand HR leadership of a new order, which leads on to my last point.
9. HR Skills: The last decade has seen the rapid adoption of HR outsourcing and HR shared services. As a result a large proportion of the transactional and operational content of the function has been externalised. the HR business partner role has come into being. And with policies, operations and process being largely outsourced, HR professionals are being called upon to be consultative and business focused more than ever before. What can be standardized is outsourced. What is left behind is bespoke and specialized. This is rendering a lot of the earlier operational and policy oriented HR professionals irrelevant. The HR function will need to reorient around a new set of skills if they are to be relevant and effective in the new world.
10. The HR Head:One Ring to rule them all, One Ring to find them, One Ring to bring them all and One Ring to bind themGiven all of the above, what is demanded of the HR head is a tectonic shift. The HR head One ringneeds to move from being a service provider to change driver. The skills and competencies that are required of an HR head will change, as a result. The largest challenge organizations will face, will be to find and appoint HR heads who have the ability to be supportive yet confrontational. This will require an ecosystem change in that B-schools will need to reset curriculum and pedagogy. Organizations will need to pay special attention to hiring and developing HR professionals. And this change will be driven by the triumvirate of CEOs+HR heads+B-schools. But more than anyone else, it is the visionary HR head of today, who needs to ensure the development and appointment of the HR Head of tomorrow. The King is dead, long live the King.
I’d love to hear what you think. I believe the future is unpredictable enough that it needs collective wisdom. Please leave your thoughts and insights as comments. I promise to respond. Future
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12 Comments leave one →
  1. Nur Habib permalink
    January 22, 2014 6:58 am

    Wonderful idea of HR

  2. January 14, 2014 5:30 am

    Joy – great post…enjoyed reading it. Most of the points resonated with me, especially around global talent management, performance management, analytics and the changing role of the HR head. On the very first point on redefining talent, I wonder how this fits in with the pressure executives face in terms of cost management. The increased focus on stead performers will have an impact on costs. No? Or you are saying that the benefits will outweigh the costs, thereby supporting the business case?

    • gurprrietsiingh permalink*
      January 14, 2014 5:31 pm

      Across our clients, we’re seeing a reduction or eradication of carpet-bombing spends on ensuring 5 mandays of training. This will free up resources. I believe a relook at the manner in which budgets are structured as well as leveraging the 70:20:10 principle will enable development without much impact on resources. 70 20 10 is the key!

  3. January 14, 2014 3:59 am

    Anybody else struck by the clueless irony that they used a metaphor from Tolkien for the corruption of power here?

    • gurprrietsiingh permalink*
      January 14, 2014 5:27 pm

      You’re right Boyce, I didn’t notice that I ended up using a metaphor for the misuse of power and coercion. Thanks for pointing it out! Now that so many have visited and read the blog, I wonder if I should change it.

  4. Mohammad Taufiq permalink
    January 13, 2014 11:43 pm

    Brilliantly articulated. Entire piece gives a great view into the future of HR in a very concise and sharp manner.
    As also pointed out in the article, in order for HR to truly become a business partner it is important to move to a ‘ Effectiveness Model’ away from the present ‘Efficiency Model’. Instead of reporting how efficient HR is, we need to look at how HR is contributing to business.For instance, instead of just reporting the number of training man-hours, what would be important is to assess how effective the training was in bringing about change in productivity. HR would also need to move away from reactive reporting to a more predictive model making use of analytics in an effective manner. Predicting attrition, for example, would be more important than simply reporting attrition percentage.

    • gurprrietsiingh permalink*
      January 14, 2014 5:33 pm

      Thanks for the additional anecdotes Mohammad, they add greater clarity to the points listed above. I believe predictive analytics are going to be an interesting new development across the function. I think a lot of predictive analytics engines developed for customer retention will be tweaked for application across employees.

  5. January 13, 2014 4:28 pm

    Reblogged this on The Happiness Manager and commented:
    A brilliant prediction: HR tomorrow.

    • gurprrietsiingh permalink*
      January 13, 2014 6:14 pm

      Thanks a ton!

  6. January 13, 2014 3:55 pm

    Excellent article. Another thing I believe that will happen is that the expectation from HR to actually get in the “field” and “show” that they can do it too will increase. I wonder if I put it correctly. Essentially, the line managers will expect HR to also participate as much as they can in client meetings, sales/service calls and prove their mettle. As we progress the more successful HR leaders might just be people who have had enough operational experience as well. Just my 2 bit.

    • gurprrietsiingh permalink*
      January 13, 2014 6:15 pm

      Absolutely. Some of the best HR folks I know came from the business. However, it is going to be critical for HR professionals of the future to have a greater understanding of business.


  1. The future of HR and Talent Management – the next 5 years… | Aspel Executive Learning

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