The Future of HR

What does the future of HR look like? Will it be a Brave New World of touch screens, android advisors and holograms, or will it be something more akin to our present situation? In this article, we explore the future of HR and how it could look in a few years’ time.

Naturally trying to predict the future is incredibly speculative.

We can’t give you definite predictions for how the world of HR will change going forward, but we can give you a few ideas about emerging technologies and ways of thinking that we believe have the potential to significantly impact the people profession as whole.

Since creating a picture of how HR could look in a few years involves a lot of educated guesses based on current evidence and trends, we’ve broken the topic down into five themes that we think could have a big impact on human resources departments over the next few decades.

1.   Qualities: Closer relationships or more control?

The way that HR develops in the future will depend in large part on the qualities that employers decide to prioritise in the present.

A report by Deloitte features some pretty stark scenarios for how it imagines the future of HR to look like based on the qualities that we prioritise at work now. In ‘The future of Human Resources: A glimpse into the future’ there are four likely scenarios for how HR will develop going forward:

• HR 4.0: Most functions automated. Increased investment in recruitment and retention. Customised offers for employees. HR works with unions to improve workplaces.
• Welcome to 1984: Practically all functions automated. Standardised and low cost. HR adopts an antagonistic approach to unions.
• Old School in a New Sharing World: Stagnating economic development and difficulty in automating leads to an increased reluctance from employers to invest in their workforce
• Only Humanity Matters: Good economic outlook leads to a focus on personalised HR processes that prize human interaction.

Whilst the authors don’t draw any definitive conclusions about which of the above scenarios they think is the most likely to occur, they do go into detail about the two opposing qualities that underline their scenarios and influence the direction that a scenario takes.

The first is an improvement in the quality, and nature, of workplace relationships. In this situation, the employer becomes a trusted partner in the career development of the employee and stronger, longer-lasted employee-employer relationships are built.

The second is where the quality of these relationships declines. In this context, the relationship between employer and employee becomes increasingly detached and antagonistic, being motivated mainly by profit concerns. Automation completely transforms the workplace, making interactions and processes more reliant on artificial intelligence. The human element of HR is largely taken out of the department.

What path we collectively choose when it comes to HR will ultimately be influenced by the individual actions of hundreds of thousands of organisations, the health of the wider economy and technological trends in wider society. This means that, for now, any path could be a possibility.

2.   Automation: How much should we expect?

The word automation is thrown out a lot and can mean a lot of different things, depending on who you’re talking to. As well as shifting definitions, it also provokes a lot of strong feelings — from people who see it as a phenomenon making work more efficient and profitable, to those who feel that it represents an existential threat to the livelihoods of millions.

Automation means a process that is mechanized to the point that it can operate efficiently without the need for humans to be involved in it. Think, machines on an assembly line, for example. 

Currently, the argument isn’t whether we can expect to see automation in HR roles in the near future — it’s a matter of how much automation we should expect to see.

So, what could potentially be automated when it comes to Human Resources departments? Well, the short answer is quite a lot.

The most obvious areas that will probably be automated in the immediate to long term will be particularly labour-intensive areas like:

• Employee recruitment administration
• Pay rewards and benefits administration
• Payroll functions
• Background checking and screening
• Data collection

It’s unlikely that automation will hit areas that rely on significant employee interaction just yet. Instead, we’ll probably have to wait until more exceptional artificial intelligence technology is available (see below for more discussion on this!) that can come close to rivaling the type of interactions that we’re used to.

A report by KPMG found that HR is particularly suited to automation. It estimated that out of 21 particular responsibilities it had identified, only 5 were relatively safe from being automated once the technology is there. To quote the article, those were:

• People performance whole system architecture (building a high-performance work system)
• HR and business strategy
• Organizational effectiveness
• Change management
• Employee relations

So, whilst it’s clear that HR isn’t immune to the effects of automation, the fundamental element that defines the function – human relationships – looks set to stay in the hands of humans, rather than machines even as most of the administration elements of the department are automated. That could be good or bad news, depending on how much you like admin!

3.   Artificial Intelligence

The development of artificial intelligence is rapidly gathering momentum, increasing in sophistication every year. Like automation, AI has the potential to strip away many of the elements that take up considerable time and effort in Human Resources roles. At the same time though, it raises ethical questions about the role of workers in a future workplace and how employers balance profit-maximising technology with the responsibility to support their employees.

And rather than something that’s in the distant future, artificial intelligence is being widely used in our current workplaces, across the economy. Research by Oracle and Future Workplace found that right now 50% of workers are currently using AI at work. To put this in perspective, in 2018, this figure was only 32%.

Much like automation, artificial intelligence presents the opportunity to remove most of the mundane, repetitive tasks from human resources roles, freeing professionals up to focus on the more interaction-based elements of their HR practice.

In terms of how it could be used, that’s up for debate. It depends in large part upon the priorities of employers going forward. As other industries and sectors show us, the use of artificial intelligence will be related to the types of skills that employers will need in the future and the availability of workers with those skills (check out our blog on the coming 2030 Skills Gap to find out more about this!)

report outlines a number of areas where it predicts that artificial intelligence could have the most impact. It cites areas like talent acquisition, talent management and succession planning as three key areas where artificial intelligence could take over, or assist many human resources functions.

4.   Blockchain: does it have a place in HR?

Unless you’ve not had internet for the past three years, you’ll probably have seen increasingly ludicrous claims from tech commentators about how the blockchain – an emerging decentralised system of recording cryptocurrency transactions across computers linked in a peer-to-peer network – has the potential to transform everything about our lives: from buying dog food through to brushing our teeth.

To put it politely, some of these arguments can seem overwrought. But, surprisingly, blockchain has some relevance to one of the key features of Human Resources: managing data securely and confidentially.

In fact, some people are adamant that the blockchain can be applied to HR departments and roles, having a positive benefit on the way that professionals work.

In this article, Morgan Phillips argues that blockchain can be applied to HR roles in a number of different ways including improving general data security and making recruitment and retention more efficient. It also allows employees to be paid in cryptocurrency if they want. Some of the keys features that the company says blockchain can bring to HR include:

• Being able to exchange digital assets without the need for a 3rd party
• Being able to implement smart contracts in the employment space
• Providing a secure ledger to store digital records that’s distributed across several stakeholders
• Offering an indelible record of all previous transactions

Whether or not blockchain is widely adopted by employers going forward is up for debate – particularly given the ongoing crisis and instability in cryptocurrency, the main area where blockchain is currently used. Either way, it’s clear that the debate the blockchain has created is encouraging us to think about new ways of enhancing security and transparency when it comes to HR. And that’s welcome.

5.   Bitcoin as an employee benefit?

You can’t have an article that discusses the blockchain without mentioning Bitcoin.

 Bitcoin is a cryptocurrency, and probably the most famous one at that.  A cryptocurrency  is a digital currency created through encryption algorithms. It works as both a virtual currency and also an anonymised accounting record.

A lot of people are attracted to Bitcoin because they like the secure, anonymised nature of transactions that cryptocurrency gives you. Critics point out though that something already exists, and has existed for thousands of years, that allows you the same anonymity when it comes to paying for goods and services – physical money.

Either way, the value of cryptocurrency has soared almost exponentially over the past few years and celebrities like Elon Musk, Gwyneth Paltrow and Snoop Dogg are all adopters, increasing the wider influence of an otherwise fairly obscure topic. That said, by their nature, cryptocurrencies are incredibly volatile and their worth has fluctuated wildly over the last few years. At the moment, the crypto market is experiencing massive instability with investors having lost millions of dollars worth of investments.

Some commentators predict that bitcoin could soon form a part of the benefits packages of employers, with employers offering bonuses and profit-sharing plans though the medium of cryptocurrencies. They argue that it could be particularly useful in engaging with millennials and young workers, as these are the people that cryptocurrencies are currently most popular with.

There’s a darker side to cryptocurrency though. The production of Bitcoin in particular needs colossal amounts of energy from computers and, as demand for Bitcoin has risen, so has demand for electricity to be able to mine it. In the middle of a climate emergency and a fuel crisis, increasing demands for electricity generated mostly from fossil fuels doesn’t seem like a particularly wise decision to make. Particularly if we plan on having a habitable planet in 50 years time. Whether or not companies are prepared for the reputation risk of offering cryptocurrency to their staff is an open question.

Conclusion: HR – an unknowable future?

Whilst we can’t definitively say what the future holds, we know for sure that technology will transform the world of work as we know it. We also know that a gathering storm of the 2030 Skills Gap is going to have a big impact on the skills that employers have at their disposal. This will affect the decisions they can make, and their overall philosophy when it comes to effective people management.

Whatever happens, ongoing professional education and development will be key to the success of HR professionals.

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