The Top
Five HR Trends For 2017
HR leaders are sizing up a handful of challenges that they
weren't yet facing in the early days of 2016. Over the next 12 months the
solutions to those obstacles will have to evolve and adapt as the overall
business world does the same. Still, it's worth taking a look back at what's
changed in the past year in order to see what's in store for human resources
professionals in 2017. These are five of the biggest trends impacting the field
right now.
1.
Millennials Are No Longer the Newbies
2.
Culture and Ethics Get A Much-Needed Refresh
3.
Some Have Second Thoughts About Ditching Annual
Performance Reviews
4.
Pay and Performance Decouple
5.
Teams Evolve To Accommodate Contingent Workers
1. Millennials Are No Longer the Newbies
All the fuss and bother over the past few years about
integrating millennials into the workplace is officially outdated. It’s now
time to welcome in the next generation. In 2017, the oldest members of
generation Z will be turning 21–23 (there's some debate as to whether the new
generation begins in 1994 or 1996). In the meantime, those on the older end of
the millennial spectrum are already in their mid-30s. Many have been in the
workforce for over a decade, having served as managers, VPs, start-up founders,
and CEOs for quite some time.
Gen Zers . . . are now just starting to enter the workforce
as interns and even entry-level employees.
Gen Zers, on the other hand, are now just starting to enter
the workforce as interns and even entry-level employees. This will present new
challenges for HR leaders looking to figure out how (and even whether) this new
generation brings something fundamentally different to the workplace, and what
it may take to prepare millennials to lead them.
2. Culture and Ethics Get a Much-Needed Refresh
A string of ugly scandals in recent years has hit companies
like Wells Fargo, Mitsubishi, Volkswagen,
Toshiba, and others. What they have in common is that all have been attributed,
in one way or another, to a toxic work culture where unethical business
practices were encouraged. In most cases, impossibly high standards set by
executives and upper management led employees to cut corners (or worse) to
reach them.
A combined Columbia and Duke University study found that an
emphasis on figures over people can encourage unethical behaviour—a finding
that should surprise no one. As Shiva Rajgopal of Columbia University explained:
"Our research provides systematic
evidence—perhaps for the first time—that effective cultures are less likely to
be associated with "short-termism," unethical behaviour, or earnings
management to pad quarterly earnings."
Not every company that vowed to kill annual reviews has seen
the results that switch were supposed to provide.
It may be discouraging that it takes a spate of scandals and
scientific research to come to that conclusion, but it's probably a good lesson
for companies to reckon with in 2017 all the same. HR leaders and executives
have been talking more regularly about culture in recent years, so some shifts
in the right direction may already be underway.
But what's also clear is that creating an ethical work
culture requires companywide input—it can't just come from the top. This year,
businesses that care about that may look to their HR teams to find ways to have
those conversations with all of their employees more meaningfully and more
often.
3. Some Have Second Thoughts about Ditching Annual
Performance Reviews
In 2015 and 2016, a number of big-name companies—including
Deloitte, Adobe, Accenture, GE, and more recently SAP—announced plans to leave
behind the annual performance review. This led many others to follow suit,
making the last few years all about breaking with the old.
We're now roughly a year into that movement, and it seems to
have slowed. Not every company that vowed to kill annual reviews has seen the
results that switch were supposed to provide. In fact, some have actually found
that employees' performance and engagement dropped as a result.
Getting rid of outdated systems isn't always enough, it
turns out. Companies are also realizing they need to design a strong
alternative in order to make the transition successful. This understanding
means we'll likely be seeing HR leaders spend more time on data collection and
change management in 2017. These days, performance management is an information
game.
4. Pay and Performance Decouple
One knotty question these same companies have run into is
what to do about pay. Should firms that swap a traditional annual review for
continuous and/or peer-based performance evaluations keep making compensation
decisions the way they used to? And for those that have reformed (or trashed)
their employee ranking systems, how do you then calculate pay fairly and
competitively?
Traditional job descriptions are going out the window.
As 2017 gets underway, some HR professionals are coming
around to the idea that linking performance management to compensation can
actually undermine the intended purpose of ditching the annual review—to create
a more learning-based approach with increased feedback conversations. The
solutions are still evolving, but there are already some ideas being tossed
around about how to separate pay from performance and get the desired results.
5. Teams Evolve To Accommodate Contingent Workers
A study by Fieldglass revealed that in 2015 the average
company's workforce consisted of 54% traditional, full-time employees, 20%
contingent workers (freelancers, interns, and contractors), and 26% that
existed in a grey area somewhere between the two (including remote and
part-time workers). The researchers predicted that by 2017, the share of "non-traditional"
workers would grow to 25% contingent, 34% grey area, and 41% traditional
workers.
The impact on job titles and responsibilities, how teams
work together, and much more is already proving enormous. With over half of the
workforce working in non-traditional positions, HR managers have their work cut
out for them. They'll need to focus more on developing innovative ways to
engage and integrate this new workforce into their organizations' cultures.
What Employees Should Be Worried About This Year
In a survey last year, businesses told Deloitte researchers
that the top issue they faced was in redesigning their organizations to fit
this new reality, with 80% saying they were currently restructuring or had
recently completed the process. One trend we're already seeing, as a result, is
the spread of cross-functional, ad hoc, and steering teams—which in many cases
replace or supplement the work of a traditional, full-time team of people all
working onsite together in the same department.
Similarly, traditional job descriptions are going out the
window. These new types of teams are utilizing the full skill-set of each
employee, rather than limiting them to a narrow range of tasks and skills
demanded by a conventional department. This means that an employee with a
passion for PR and a talent for graphic design may be able to do both as a
project's needs evolve. Some call it the rise of "comprehensivism."
For HR leaders, performance management will need to become
more fluid as a result. Whether or not a given employee has one manager,
several, or none at all, they still need to get feedback—including,
increasingly, from their peers—in order to keep learning and improving. To do
that, they'll also need to feel free to ask for it from whomever (and whenever)
they want. The shift toward self-steering learning and development is already
underway, and it's up to forward-thinking HR professionals to smooth the way
for it.
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Steffen Maier is the
cofounder of Impraise, an innovative solution that helps companies replace the
annual performance appraisal with actionable, continuous feedback.
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