The dynamics of the business environment, education, and demographic changes bring to light the pressing problem of the labor force. If companies allowed themselves to select candidates a few years ago, they are now struggling to find them. Strenuous recruitment processes have been significantly simplified to facilitate recruitment. Companies have implemented development programs, flexible work schedules, compensation, and benefits schemes to retain talent. The role of executive research companies is even more necessary and the employer brand increasingly important.
On this challenging background for the Romanian companies, Valoria has launched a new research on the most important Trends and Challenges in HR for 2018. The report presents the comparative data of the results of the research conducted in the years 2017 and 2018. For the purpose of this article, we selected the opinions expressed by the directors general on the challenges faced by HR practices, employee retention developments, automation of HR processes and digitization of HR.
The CEOs want engaged employees
For CEOs, the three most important strategic challenges in the HR area are the following:
- Maintaining a high level of employee engagement (83%)
- Ensuring the leadership skills which will help the organization respond to new business requirements and the rapid pace of change (67%)
- Talent retention and the creation of an organizational culture (values, beliefs, behaviors) that gives a competitive advantage to the company (67%)
The other HR strategic challenges identified by the CEOs of the respondent companies are: using digital technologies to streamline HR services, motivating employees in production, lacking qualified staff on the labor market, and continuing wage pressure.
To respond successfully to these challenges, 87% of CEOs say the solution is to invest efficiently in developing employee skills and abilities through education and training, while 80% of HR managers rely on transparent collaboration between HR and top management for alignment at the strategy level.
The CEOs want a transformed HR function
For 79% of the CEOs, demonstrating the organization’s commitment to social responsibility and sustainability are among the most effective practices in attracting, retaining and rewarding the best employees. For 67% of the HR managers, providing a sense of job security and creating career opportunities for employees seem to be the most effective practices in attracting, and retaining talents in the organization.
In order to give a more strategic dimension to the HR function, CEOs say that the most important action to be implemented in the organization over the next 3 years is the more intense involvement of the company’s executive management in the implementation of HR strategies.
On the other hand, for HR managers, the key-actions are the following: investing in developing the focus of HR employees on specific issues such as new critical business skills, changing the assessment method of the HR business partners (e.g. by the quality of the recruitment process, company retention rate, etc) and more intense involvement of the company’s executive management in the implementation of HR strategies.
The CEOs want to support the digitization of HR processes
The most used software in the HR department is the payroll software (80% of the companies), the human resource management software (70%), the employee performance management software (65%). For 75% of CEOs, the current recruitment management systems or processes have a positive impact on the company’s ability to deliver an efficient HR, while for 70% of them, the importance of using the technology for measuring HR’s function performance has increased.
For 55% of general executives who responded to Valoria’s research, technologies such as artificial intelligence and process automation will be sufficiently advanced over the next 2-5 years to influence the HR function in their company. Moreover, CEOs consider that the major trends which can significantly change the HR function in the future are: digitization of the company’s processes (75%), artificial intelligence (70%), mobile and social media applications (65%) and outsourcing (60%). Unfortunately, most respondents say the budget allocated for digitization of the HR function was lower in 2018 than in the previous year.