Most HR organisations remain behind the curve in addressing an “array of areas” that are critical to helping the enterprise achieve its goals, a new study warns.
These areas include developing executives who can lead in volatile environments and supporting enterprise digital transformation.
The 2019 “key issues” research from strategic consultancy and digital transformation firm, the Hackett Group, found that while some progress on improving key capabilities have been made these have largely been slow to come by and gaps remain.
While some key development areas are targeted for improvement in 2019, others, like finding solutions to skills shortages, retaining key staff, and strategy execution, are not likely to receive the attention they need.
Despite rising stakeholder expectations, progress may be hampered by the expectations of flat HR budgets and headcounts.
To help resolve these shortfalls and achieve next-generation HR capability, many organisations are engaging in digital transformation, embracing the adoption of emerging technology.
Yet only a third of HR organisations report that digital transformation has had a high impact on helping them attain enterprise objectives or significantly improved their service delivery models and performance, the research found.
When it comes to digital transformation, HR must understand it is about people and talent as much, if not more so, than technology and ensure they take a far more central role in such programmes
But this is expected to improve dramatically over the next two to three years, as the pace of digital technology adoption increases. HR is expecting to see the most substantial gains in areas that include modernising core ERP platforms (42 per cent adoption growth), robotic process automation (2.5x growth), data visualisation tools (59 per cent growth), and virtual digital assistants/chatbots (2.4x growth).
In terms of its ability to support the enterprise, the research found that HR organisations say they have “low ability” to address issues in five critical areas. Three of these enterprise priorities have remained consistent: developing executives who can lead in volatile environments; enabling successful business strategy execution; and enabling digital transformation. Two are new to the top five list this year – support for enterprise customer-centricity and the ability to address talent and skills shortages.
HR’s planned improvement initiatives for 2019 also reveal significant cause for concern, the research found, as it does not appear to be mobilising against many of the highest cited priorities.
Only some of the improvement priorities and development areas that have been identified are among the top initiatives that are either planned or underway.
Supporting enterprise digital transformation and leveraging technology to improve HR efficiency and effectiveness, for example, are the first and third most common HR improvement initiatives planned for 2019 with none being tackled by a majority of study participants.
“In order to close the capability gaps we’ve seen, and to truly step up the pace of digital transformation, HR organisations require a long-term plan of action that prioritises closing critical gaps while leveraging technology to its fullest,” said Harry Osle, global HR practice leader and principal in charge of the HR advisory practice, the Hackett Group.
“It must be a multi-pronged effort that incorporates technology implementation, data standards, process redesign, organisational restructuring, and more.”
Commenting on the research, Rialto Consultancy director Richard Chiumento pointed out that given we have lived in volatile and unpredictable business environments for at least a decade, there is no excuse for HR not cultivating a generation of executives who can lead in these difficult times.
“This must become a priority because organisations need leaders who are resilient, agile and can react to changing market and business demands,” he said.
“And when it comes to digital transformation, HR must understand it is about people and talent as much, if not more so, than technology and ensure they take a far more central role in such programmes.”