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7 strategies to prepare for the future of human capital management
Future of work

7 strategies to prepare for the future of human capital management

February 22, 2024

HR managers used to be like high school assistant administrators, paper pushers who kept the school running and scolded those who broke the rules. These managers now place a greater emphasis on people than on numbers, and, like effective teachers, they assist both strugglers and superstars.

And what about the future of human capital management? HR (if it's still called that) will become more important than ever in business analytics, artificial intelligence, and strategy, guiding employees throughout their careers and becoming more important than ever in people analytics, artificial intelligence, and strategy.

The role of HR has evolved substantially in tandem with the workforce and economy, and it will continue to do so as computers and technology take over tasks previously performed by humans. However, this does not devalue the importance of people or the HR teams that support them.

HR executives of the future will need to think wider and more broadly, as well as be tech-savvy and nimble enough to deal with an increasingly agile and restless workforce.

HR is becoming more intriguing, demanding, and maybe competitive as technology allows them to focus on bigger-picture issues. To some extent, HR is still viewed as a strictly tactical responsibility in some organisations. HR, on the other hand, is viewed as a strategic partner by the good ones, the wise ones.‍

Future of HR: We've Come a Long Way

Since one of the first HR departments was established in 1901, HR has progressed significantly. The idea of a human resources department to oversee personnel was not widely accepted until after World War II.

A slew of work-related laws, including the Equal Pay Act, the Civil Rights Act, and the Family and Medical Leave Act, made the presence of HR specialists even more vital in the later part of the twentieth century.

The HR professional's stock is growing these days, with some practitioners being invited to join the C-suite rather than just visit it. Many companies are replacing the term "HR manager" with terms like "chief happiness officer," "director of talent acquisition strategy," and even "head of positive people."

The future of human capital management is anticipated to mirror the field's rising emphasis on technology and analytics.

Also read: What is Human Capital Management: The Ultimate Guide

In the future of HR, technology will aid HR in adapting to a shifting workforce that is accustomed to ordering anything from a date to groceries online. HR teams will need to make more information and services available to employees 24 hours a day, seven days a week, freeing up time to focus on business strategy and employee development paths.

​Even if your job title or your responsibilities have yet to change, it's imperative to start adapting to the new reality now. You can begin by enhancing your skills in seven critical areas that analysts say are key to future success in the profession and likely to be widely practiced by 2025. They include business strategy, analytics and, of course, people.‍

All about the future of human capital management

1. Embrace technology and analytics

HCM systems are already being used by savvy HR departments to forecast and assess everything from employee retention to recruitment efforts to wellness programme success. Chatbots, for example, allow candidates and workers to have individualised, automated dialogues with a computer. A HR chatbot may tell a worker how many sick or vacation days he has left, as well as which services the company's dental plan covers.

And, through a personalised assistant with a name, a face, and a nice manner, a job prospect can answer questions, complete employee evaluations, and check the status of his or her application. All of these traits are, of course, computer-generated.

Millennials, who now make up the majority of the workforce, are accustomed to receiving information quickly by computer or smartphone. To meet the digital customer experience that younger workers desire, a wide range of employee experiences should be provided online, from application to onboarding to checking benefits and paid time off, and HR should be in charge of this effort.

HR will have more time for strategic workforce planning now that they are freed from such routine responsibilities as processing payroll, answering benefits inquiries, and scheduling interviews. Human resources can go from stewarding employment to stewarding work.

2. Understand how the company succeeds

It's not enough to know how to communicate in HR jargon. Human resource professionals must understand and contribute to the company's vision, goal, and financial success; otherwise, the C-suite will not take them seriously. Experts warn they won't be able to implement efficient workforce planning or recruit, hire, and train the necessary individuals on a practical basis.

HR leaders must grasp the company's strategic direction as well as the economic and social environment in which it operates, in addition to knowing the stock price and how to read a profit and loss statement. Changes in work and the workforce must be anticipated and prepared for. Only then will HR leaders be able to properly take on the future of human resource management and align their organisation goals with HR initiatives.

HR professionals need to understand something about how business and companies work. What does the CEO worry about? What does the CFO worry about? As HR moves into the C-suite, it needs to start acting like part of the executive team.

Also read: Why CHROs make Great CEOs

3. Stay focused on people

Embracing technology does not imply that humans are no longer relevant. HR managers will have more time to focus on individuals in 2025, which will improve both recruiting and retention. Fran Katsoudas, executive vice president of Cisco, was renamed chief people officer from HR officer. She interprets this as an indication that her role is shifting from risk mitigation and compliance to the execution of business strategy.

Furthermore, HR might evolve into what Goldstein refers to as "talent brokers" and "coaches" who help everyone at the business navigate their unique careers.

With severe war for talent, successful HR managers must provide a compelling rationale for top employees to join their company. If you don't have a worldwide business strategy yet, you'll be competing with international companies for the top people. You must create an atmosphere in which people enjoy being there and cannot imagine being somewhere else.

4. Be ready for the new workforce

In the future of Human resource management, not just transient employees (60 percent of Millennials said they are open to new job options), but also gig workers who come and go on a daily basis will make up the workforce in 2025. Furthermore, HR will be required to assist in determining which functions within the firm can be automated, as well as reskilling people whose jobs are disrupted by automation.

More than half of companies said they will use "breakthrough techniques in HR's function" to deal with automation and digitalization, according to a new Willis Towers Watson survey. Meanwhile, as globalisation leads to a more diversified workforce, some of HR's distant workers will become even more remoteas in, seven or ten time zones away.‍

future of human capital management

5. Market a modern benefits package

Offering benefits package that appeals to the modern worker is critical to attracting and retaining talent. This includes not only parental leave and flextime, but also caregiver leave, extended fertility benefits, gender reassignment and transformation assistance, financial wellness programmes, and a myriad of other benefits that help with life's major milestones. Although recruitment marketing exists currently, given the demographics and necessity of attracting people, it is becoming increasingly important.

6. Stay abreast of compliance issues

HR compliance will continue to revolve around tax rules, laws such as the federal Family and Medical Leave Act, and Form I-9 and E-Verify procedures. However, as the workforce evolves, HR will need to adapt in order to comply with rules governing the gig economy and remote workers.

There will almost certainly be sustained focus on pay equity, prompting HR to figure out how to build a compensation structure that allows the company to recruit top talent while being compliant with the law.

7. Be certified (or update your skill set)

Human resource professionals must broaden their expertise of both traditional jobs and overall business strategy as many HR services become automated or outsourced (payroll, benefits, and recruiting, for example).

The future of human capital management is continually evolving, with numerous new regulations affecting how we interview, pay, formal training, safeguard privacy, and so on. HR workers should take advantage of educational possibilities.

Certification often leads to higher salary and more promotions, according to HR veterans. Certification raised the probability of being promoted within five years by more than 21% for HR assistants and over 25% for HR directors, according to a 2018 PayScale poll.

The study discovered that the higher a person's title, the more likely they are to hold HR certification. Salaries for people with official certification are also typically higher. According to PayScale, HR certificate holders made roughly 32% more than those without qualifications in 2018.

All signs indicate that HR will look very different by 2025. I can really envision a day when HR is no longer HR. Not only will HR leaders administer business decisions, they will help make those decisions—as trusted workforce advisors.

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