According to the survey “Trends and Challenges in HR 2018” conducted by Valoria in collaboration with BusinessMark, 79% of companies say that the most important strategic challenge in HR is to maintain a high level of employee engagement. On the second place is the retention of the high-potential and the highly-performing employees (61%), and on the third place is the creation of an organizational culture that gives a competitive advantage to the company (54%).
The strategic HR challenge that Romanian companies say are best prepared for is the management of organizational re-design processes for better adaptation to market changes (69%). The same percentage goes to accessing and a more extensive integration of the services offered by “contingent human resources” (free-lancers, part-timers, but also the use of technology and robots, etc.). Only a percentage point away is maintaining a high level of employee involvement (68%).
“The ability of companies to stay innovative and competitive is based on the availability of skills of skilled people, correlated with the rapid evolution of the market. For the third consecutive year, we have gathered data from the top management and HR specialists of Romanian companies just to capture the trends in the field of human resources. The third edition of the survey Trends and challenges in HR helps organizations understand where they are now and what are the new rules of the game for the near future in terms of strategic challenges, but also the use of new technologies in HR, process automation or job digitization of HR only from this reference study”, says Constantin Măgdălina, Expert Trends and Emerging Technologies, co-author of the research.
Challenges to HR practices
At the level of HR practices, the top five challenges of the year 2018 are the finding of employees with more and more specialized skills (68%), which was top ranking last year, on the par to the retention of the employees (68%). On the eighth place in 2017, and the third place in 2018, is aligning HR practices with organization management and business strategy (42%), and the next generation of leaders of the organization is ranked fourth (37%). Maintaining competitive compensation packages (37%) is down from the fifth to the fourth place.
Among the key resources available and that can be used by companies to respond successfully to the current HR challenges is the solid support from the top management for the HR function (65%). The strong HR skills of the staff in the HR department (47%) comes in the second place, whilst the transparent collaboration between HR and management for strategy alignment (41%) rises from the sixth place to the third one.
59% of Romanian companies consider creating an organizational culture based on trust, open communication and equity in decision-making as the most effective practice of attracting, retaining and rewarding the best employees. Creating career advancement opportunities for employees (58%) is in the second place, while job security for employees (53%) remains on the third one, just like last year.
“We believe it is timely to develop, together with our partners from Valoria, the study Trends and challenges in HR as it highlights the perceptions of human resources managers and top executives on the challenges of the HR function. In the current context, the human resource is essential for strategic business development. Companies are committed to creating a good organizational culture, having engaged employees, good retention, access to talent, and developing the leadership skills for managers. The support extended by top management to HR is critical to meet the organization’s strategic challenges”, says Daniel Drăgan, Managing Partner, BusinessMark.
Actions for a strategic HR function
Only 13% of the respondent companies access the potential of the strategic role of the HR function, even if the dynamics of the business environment and demographic challenges make this a necessity. But in companies where this approach is a reality, the HR director/manager is equally involved in achieving the company’s business goals, like all other executives in executive management.
The top key actions that could be implemented by companies in the next 3 years to give a more strategic orientation to the HR function has a different structure than in the previous edition. Updating HR strategies to ensure alignment with business continuously evolving business goals (56%) rises on the first place in 2018, from third place in 2017. On the second place is investing in HR development (50%), which was on the 8th place last year, and on the third place is measuring the specific effects of HR programs (44%), the response formerly on the second place.
In 2018, relationship management is the most important competency of HR professionals (4.38). Ethical behavior goes down to second place (4.35), followed by Human Resources expertise in third place (4.12). Social intelligence descends from the third place to the forth (4,06 in 2018), on the par with the ability to exercise leadership and influence.
“Business leaders want the HR department to move from a functional to a strategic role to contribute to the growth of the company in a business environment with great challenges in attracting, retaining and motivating the workforce. That’s why the results of this year’s edition bring to the forefront the training of HR staff, as well as the efficiency of HR practices in attracting, retention, and rewarding employees, in automating processes and measuring the performance of the HR function. At the third edition, the study Trends and challenges in HR shows the reality of the role the HR function has in the domestic companies”, says Elena Badea, Managing Partner Valoria, co-author of the study.
About the survey
This survey gauges the perceptions of executives from the top management of companies and those of HR directors on the strategic challenges facing the HR function. The questionnaire, which received 141 responses, was applied between 11 June and 12 September 2018. 17% of respondents come from companies with a turnover of more than EUR 100 million, 10% from companies with a turnover of EUR 50-100 million, 17% from companies with a turnover of EUR 10-50 million, 19% with turnover between EUR 1-10 million and 37% under EUR 1 million in turnover. 63% of respondents are CHROs / HR Directors / HR Managers, 3% are HR Business Partners, and 16% are CEOs / Presidents / General Managers / Members of the Board of Directors. This survey was conducted by Valoria in collaboration with BusinessMark.