According to the findings of the survey “Trends and challenges in HR 2020” conducted by Valoria in partnership with BusinessMark and Undelucram.ro, 64% of companies say that the most important strategic challenge in HR this year has been to maintain a high level of employee engagement, considering that remote work has become the “new normal” in many industries.
The year 2020 has put HR teams to the test through the strong pressure it has created in administrative terms, in communication with the team, in the implementation of health safety measures, etc. The main HR areas that respondents consider to be the most affected by the impact of the changes brought by the pandemic in 2020 are the following: Recruitment (32%), Employee Engagement (28%), and the Compensation & Benefits area (27%), on a par with Digitization (27%) which has accelerated.
The survey findings show that the percentage of companies that have the HR function strategically oriented on growing the employer brand, on employee experience, on succession plans for the top management and is strongly connected to the priorities in the business environment, has increased from 13% in 2018 to 17% in 2020.
Moreover, the percentage of companies in which the HR function uses technology to collect and analyze all the information that would allow it to predict the best positioning of the company in terms of HR for the next 2-3 years has increased from 5% in 2018 to 11% in 2020.
Another good news is the increase in the percentage of companies in which the HR function is focused on meeting the legislative requirements related to the company’s staff but also on attracting, retaining, training, and motivating employees, from 19% in 2018 to 28% in 2020. At the same time, the percentage of companies that have the HR function focused only on meeting the legislative requirements related to the company’s staff (employment, payroll, labor protection, etc.) decreases from 63% in 2018 to 44% in 2020.
“This survey measures the strategic challenges for the HR function and how well are those responsible prepared to face them. It also gauges the efficiency of practices in attracting, retaining, and rewarding employees, the level of process automation and measuring the performance of the HR function, as well as the relevant skills for an HR professional. This survey asks powerful questions regarding the evolution of the HR function and offers answers to HR professionals about who they are, what they do, and how they cooperate with the top management of the company”, says Elena Badea, Managing Director of the consulting company Valoria.
Strategic challenges of the HR function
In 2020, the three main strategic challenges faced by Romanian companies in terms of HR function are the following: maintaining a high level of employee engagement (importance score: 8.91 out of 10), retention of employees with high potential and of those with outstanding performance (8.77), and the management of organizational re-design processes for a better adaptation to market changes (7.58).
A remarkable aspect is that the first three places in the top of importance are the same as those in the top of the readiness level, even if their order is slightly different, specifically: the management of organizational re-design processes for better adaptation to market changes (8.42), maintaining a high level of employee involvement (8.18), retention of employees with high potential and those with outstanding performance (7.84). This is an element that shows a good alignment between strategy and tactics.
“In 2020, employees have needed more than ever an environment of genuine communication and cooperation for them to perform and the company to be profitable. The conditions in which they carry out their activity, the company values and culture, and the technology influence the degree of employee involvement as well as the HR activity. In Romania, the digitization of the HR function has shifted towards process automation, and now the HR specialists can focus on taking care of the people”, says Costin Tudor CEO and founder of the Undelucram.ro platform, the largest online community dedicated to employees in Romania.
Challenges in HR practices
At the level of HR practices, in the first place in 2020, for 65% of companies, is finding employees with specialized skills, followed in second place by the development of the next generation of leaders (52%) and, in the third place, employee retention (44%).
The most important key actions that could be implemented to provide a more strategic dimension to the HR function in the next 3 years are the following: updating HR strategies to ensure alignment with continuously evolving business objectives (mentioned by 64% of respondents), investing in the development of HR employees (mentioned by only 38%) and measuring the specific effects of HR programs (mentioned by 33%).
In 2020, skills considered to be the most important for an HR professional (from expert-level upwards) are the following: ethical behavior (score: 9.52 out of 10), social intelligence (score: 9.42), and communication assertive (score: 9.28). It should be noted that all scores are in the third quartile of the data series, which once again indicates their high importance.
Automation of the HR function
In recent years, the HR function has begun to make the transition from a transactional, established role to a transformational one, with a truly strategic contribution for the company. An important contribution in this evolution has the technology, which takes over the burden of routine processes on the shoulders of the HR team; in 2020, 43% of the responding companies say that they have a solution to automate HR processes. Moreover, of the respondent companies, 51% believe that the use of technology in HR is of increasing importance for the performance measurement (ROI) of the department, 12% believe that it is only somewhat important, while 26% consider it to be a key element of critical importance.
If 79% of the responding companies say they use software programs for payroll, only 29% have software programs for learning process management and employee training. The results of the survey show that only 14% use software to manage compensation and benefits programs, but 40% say they have software for recruitment, and 48% say they have software for managing employee performance.
“The 2020 edition of this survey shows that organizations are concerned with digitalization, developing the leadership skills of the managers in the context of the remote work, ensuring a great employee experience and high employee engagement, a strong organizational culture, good retention, but also access to talent. The findings of the current edition pf the survey show that top managements support for HR is very important for it to cope with the strategic challenges of the organization”, says Daniel Drăgan, Managing Partner, BusinessMark.
About the survey
The survey gauges the perceptions of CEOs of top companies and HR managers regarding the strategic challenges facing the HR function in 2020. The questionnaire, to which 247 responses were received, was applied between 6 October and 13 November 2020. The report presents the cumulative analysis of the 2020 edition results, but also the comparative data of the answers of the general managers and those of HR managers.
21% of respondents come from companies with a turnover of more than EUR 100 million, 15% from companies with a turnover between EUR 50-100 million, 12% from companies with a turnover between EUR 10-50 million, 22 % with turnover between EUR 1-10 million and 30% below EUR 1 million in turnover. 56% of the respondents have the position of HR Director/HR Manager/HR Business Partner, 17% are from top management, and 27% have other positions. The survey has been conducted by Valoria in collaboration with BusinessMark and Undelucram.ro.