HR Trends in 2022: Future of Human Resource Management

Within the last few years, the HR industry has seen an unprecedented amount of change: the increased push towards a more diverse workforce, the growth and adoption of artificial intelligence which has impacted how HR professionals get work done, and most recently, the ripple effects of a global pandemic.

It begs the question: What is the future of the HR industry? This blog will outline the HR trends that will continue to shape the shared service. Trends we will look at:

1. AI is here to stay
2. Investment in HR technology is growing rapidly
3. The employee’s experience has been redefined
4. Virtual work is a new normal

Key Takeaways

• AI & tech investment for HR is growing: AI adoption is one of the most important aspects HR leaders are pushing towards, especially since adoption in HR is currently low despite the anticipated positive impact AI will have on businesses.
• The employee experience is more important than ever: Studies from leading research firms suggest that the employee experience is a key consideration in HR decisions, as employees voice higher workplace expectations around tools, transparency, and inclusion.
• Virtual work is the new normal: Although a global pandemic started the shift toward remote/virtual work, it’s becoming a standard as more companies permanently adopt the practice and employees begin to see benefits in a virtual/hybrid work setting.

Top 4 Trends for 2021 & 2022

1. AI is here to stay

The application of artificial intelligence (AI) to HR processes has increased, given AI’s maturing capabilities, the need for businesses to digitally transform themselves, and the fact that the technology’s benefits outweigh the financial costs with minimal monthly investment and relatively quick payback periods (from days to a year, pending your company size).

HR leaders are leveraging AI to drive quality, productivity, and employee experience improvements across various HR domains, such as candidate screening, new hire onboarding, learning and development, workforce analytics, and health benefits.

A study from McKinsey validates how AI will drastically change business, no matter the industry: “AI could potentially deliver additional economic output of around $13 trillion by 2030, boosting global GDP by about 1.2 percent a year.’’

That said, although AI for HR has gained traction, it has room to grow with only 17% of organizations leveraging AI-based processes in their HR practice today, which is expected to grow to 30% by next year, according to Gartner.

But given AI’s maturing capabilities, expanded applications, clear business case, and continued adoption by companies of all sizes, AI is in fact here to stay.

2. HR tech investment & innovation is increasing

According to a research summary by Zippia, the investment in HR tech is exploding. Here are some numbers: 60% of HR departments are expected to invest in predictive analysis, 53% in process automation, and 47% in artificial intelligence in 2021 and beyond.

The enormous demand by HR leaders is driving larger investment by venture capital firms trying to take advantage of this growth opportunity. A recent article by Crunchbase shows that VC funding has reached a 5-year high at $3.6B and 260 deals in 2021, so far, with several months left in the year:

According to Gartner: One of the top HR tech innovations for 2021 is the use of AI and hyper-automation. As automation becomes more prominent, organizations have to decide what can be automated and when it is beneficial. Hyper-automation combines the latest technologies like Artificial Intelligence (AI), machine learning and robotic process automation (RPA) all together to drive efficiency in an organization as time goes on.

“Hyper-automation provides tremendous opportunity to improve HR efficiency and reliability, particularly across transactions and workflows that are subject to errors, bottlenecks and delays.” — Gartner

3. The employee experience (EX) continues to evolve

Due to the pandemic, the employee experience has taken on new shape and meaning. The acknowledgement and prioritization of your employees’ goals, mindset, and ambitions has to be at an all-time high to ensure employee satisfaction and efficiency.

A recent Gartner study showed that employee experience was a key initiative for HR leaders in 2019 — and it’s clear this will continue to be important as we head into 2022. The trend is undeniable. Businesses have realized how beneficial happy workers can be when they commit themselves fully to achieving company goals.

A second study from PwC in 2020 confirms the importance of the employee experience driving HR investment decisions:

Further, according to a McKinsey report, employee engagement, well-being, and effectiveness are driven by the following 3 themes:

• Stable work experience — Leads to an +53.3% increase in well-being.
• Trusting relationships — Leads to an +47.6% increase in engagement.
• Social cohesion and inclusion — Leads to an +22.3% increase in work effectiveness.

All that said, if you haven’t done so already, considering how to define, measure, and improve your employees’ experience could be an important business step to retention, satisfaction, and long-term business performance.

4. Virtual work is the new normal

It’s no surprise that Covid-19 has changed the way we work.

And the change may be permanent, since major companies like Facebook, Shopify, and Slack have fully embraced remote work. The potential permanence of this trend is further supported by a 2020 Salesforce study, which shows that 69% of study participants agreed that “the pandemic will permanently change the nature of work.”

Others have fully embraced this practice as well, but with a twist: Twitter and Microsoft announced that every employee who doesn’t need to be in the office (such as to maintain servers) will be able to work from home.

Another survey in June found that working from home full time would be the most appealing option for 37% of respondents, with another 32% saying a split between home and the office would be their choice (aka, a hybrid approach).

Regardless of the survey, it’s clear that some form of remote work — whether fully remote or partially remote — will not be going away any time soon, given company investments in supporting a remote workforce, employee desires, and the minimal impact on overall business performance.

So, if you’re an employee and you haven’t upgraded your home office already with a large monitor and lush green plants, now may be a good time. If you’re an HR leader, it’ll be a good practice to clarify which working options you’ll provide and ensure each is properly supported.

The Wrap-up

The HR landscape is ever changing and new trends will continue to emerge. But, many core themes will remain: the importance of the employee experience, the further application of AI, more remote working employees, and continual innovation in HR tech, to name a few.

What are other key 2021 HR trends? Which trend do you think most managers need to get used to in the coming years? Engage with us in the comments!

And, of course, if employee chatbots are something that you’re interested in, come check us out! — https://bit.ly/quickscout.