The transformation of talent management through analytics will be one of the most important trends for HR leaders in 2016, according to a new research report.

It analysed a number of trends that are impacting HR and suggested that HR take a step back and focus on where it can have the most business impact.

“2016 is shaping up to be one of the most disruptive years on record,” said Aaron McEwan, senior director and advisory leader of the HR practice for CEB, which released the report.

“Whether it’s the imminent death of performance reviews, the latest fad in work-life balance policies, the rise of predictive analytics or the changing role of the CHRO, there’s no shortage of predictions about the kinds of challenges HR will face and strategies HR should consider for 2016.”

The report, What’s Next for HR in 2016? 11 Trends from HR Leaders, took in 350 heads of HR from organisations globally to assess their priorities and expected challenges in 2016, and said there were four notable trends of important for HR leaders.

1. Analytic transformation of talent
Despite the enormous promise of increased data availability, the report said increased analytics availability doesn’t necessarily equate to effective analytics use.

Only 5 per cent of organisations said they are effective at tracking and using talent analytics, according to the report, which found that 12 per cent of organisations have used predictive analytics for talent decision making while 49 per cent plan to do so in the near future.

A further two-thirds of organisations have (or are considering) establishing an analytics centre of excellence, while 89 per cent have or are considering increasing the ability of HR business partners (HRBPs) to self-serve HR metrics and information.

“HIPO program managers need to understand how their HIPOs compare to their competitors’ rather than relying on internal evaluations alone”

However, less than one-half of line leaders believe that their HRBPs are effective at applying talent and business data to support decision making, and instead of relying on a few individuals for analytics expertise, the best organisations develop analytics skills and accountability across all HR staff.

A further 58 per cent of HR leaders said high-potential and future leader identification needed the most improvement when it came to HR analytics.

“The global marketplace is more competitive than ever. Today’s HIPO program managers need to understand how their HIPOs compare to their competitors’ rather than relying on internal evaluations alone,” the report said.

“Without understanding how your talent compares to best-in-class peers’, you risk developing your talent ineffectively, focusing on the wrong skills for the market challenges you face.”

2. The collaborative enterprise
Work has become increasingly horizontal, yet HR technology, capabilities, and workflows are still designed to support vertical organisations, and the report said there are three important elements HR should potentially consider in this trend.

The first is performance management systems, as only 4 per cent of HR leaders feel they are effective at accurately assessing employee performance.

However, the report advised that simplification shouldn’t be the end goal of performance management redesign, and HR should ask questions about how to revamp the review process to actually drive performance, and not just to record past performance.

“The benefit doesn’t come from adding more formal talent interventions to the business’s agenda”

Similarly, many organisations are thinking about planning more talent conversations to keep up with change.

“More frequent conversations about talent can help HR and the organisation more proactively address talent challenges and adapt to changing business and employee needs,” the report said.

“However, the benefit doesn’t come from adding more formal talent interventions to the business’s agenda (eg, more performance reviews), but instead from finding ways to introduce briefer, informal discussions about talent in business processes and daily interactions.”

3. Workforce of the future
A third notable trend for HR leaders is developing the workforce of the future, with more diversity, different career paths and other employment offerings that appeal to the needs of top talent.

The report found that more than 60 per cent of HIPOs are dissatisfied with their development experiences, and two-thirds of organisations will face an internal skill shortage in the next three to five years.

In response, 76 per cent looking to internal rotations (eg, to another business unit, function or role) in 2016, along with mentoring (76 per cent) and executive leadership/coaching (72 per cent) to help develop HIPO talent.

“The best organisations assemble diverse change teams as needed and adjust their composition over time to ensure that the right skills are deployed to each change initiative”

Another factor in the future of the workforce is an organisation’s ability to adapt, and the report found that only 21 per cent of organisation are able to initiate change as soon as they need arises, and 62 per cent of organisations have or are considering establishing a change management centre of expertise.

However, CEB observed that establishing a dedicated change team does not significantly affect the probability of change success due to expense, narrow specialisation, and fixed capacity.

“Instead, the best organisations assemble diverse change teams as needed and adjust their composition over time to ensure that the right skills are deployed to each change initiative, and that HR has the capacity to lead multiple, overlapping change projects,” the report said.

4. Next generation functional effectiveness
Traditional HR models are struggling with change, and the report suggested that business acumen is the number one skill that heads of HR need to develop in 2016 in order to succeed.

“A CHRO’s effectiveness as a strategic partner is compromised when his or her strategic planning process does not identify, explore, and translate business strategy into HR strategy,” the report said.

“To create effective and lasting HR strategic plans, CHROs must understand business needs by interacting more with other leaders and developing strong professional relationships, and demonstrate how HR can be a strategic partner by translating the business’s needs into HR solutions.”

“CHROs have a dual relationship with C-level executives”

The report also noted that CHROs aren’t just HR leaders anymore, and found that 71 per cent of HR leaders are spending more time on business issues not related to HR or talent, and a further 70 per cent are spending more time participating in business projects in a leadership capacity.

“CHROs have a dual relationship with C-level executives. First, they are peer business leaders, working side by side on strategic and board-level priorities,” the report said.

“Second, CHROs are peer coaches, guiding new-to-role corporate officers through difficult transitions and performance challenges.

“So CHROs must excel at enterprise leadership and continually share new ideas, tools, and processes to accelerate their peers’ performance.”

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