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European HR: Top 10 Investment Areas 2013-2014
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This day next week we are back in Amsterdam for our 3rd iHR Awards and our largest gathering to date, what is officially Europe’s #1 HR Event - HR Tech Europe 2013. Importantly, raising our game to beat last year’s success, we have managed to significantly increase our buyer base with delegations now traveling from over 41 Countries, with a combined influence currently of over 14 million employees – we expect that number to grow between now and the close of registration next Wednesday morning.

HR-DNA-HRN-EUROPE-HR-TECH-EUROPEIf you aren’t registered yet then we encourage you to do so now – save yourself a years worth of meetings in two days amongst an elite global gathering of Who’s Who in HR. Testimony to this, lies in the fact that HR Tech Europe 2013 becomes the first event globally where the 3 main players are lead sponsors, battling one another for all major business across the EMEA Region, Oracle, SuccessFactors and Workday.  The exhibition is long sold out with an increase of +30% on last year. Furthermore, we have carefully drilled down into the Key HR Investment Areas and (Real) Interest that we believe, is the best you’ll find in Europe on Europe. (Not to be confused with the #1 Challenge – Tech integration nightmares!).

European HR Investment #1

Talent Management

No surprise here, given the old and sometimes tired adage of People are our Most Important Asset, this is never likely to change for obvious reasons. Looking through our talent management lens,  we’ see this is still the biggest pain point for so many businesses, big and small alike – it influences everything – innovation, sales, marketing, culture, leadership, etc.  We have noted that Talent Management and Recruitment projects have similar numbers to change and transformation projects for success and failure. Besides, it only takes a new CEO/Head of HR to come in and completely change the talent strategy from efforts started 12 months earlier.

Streets ahead of all other votes Talent Management stands out from the crowd. We narrowed this down from 40 investment areas in 2012, including Succession Planning, Recruitment, Retention, Talent Communities/Pools/Networks, etc. We even enjoyed heated debate at inaugural iRecruit 2013 earlier this year (Europe’s largest Recruitment Conference & Expo) on the difference between talent networks, talent communities, and talent pools.

Don’t take our word for it – learn more from Josh Bersin in Forbes and the Bersin by Deloitte Report Summary for 2013 can be found here: The 2013 Talent Management Systems Market: Explosive Growth and Change

European HR Investment #2

Analytics

HR Reporting … Analytics … Metrics … Measurement … Predictive … Social Analytics … no surprises this hits #2 on our list and the reason why we ran with the Theme of Big Data HR at our HR Tech Europe Spring Warm-Up in London – the opportunity is real and we see this area exploding and analytics/better HR reporting tools makes #2 spot on our buyers hit list for 2013. Coupled with the fact that people are people – there are the good, the bad and the ugly in every company and every department (not just HR!) – it seems a good bet that decision science and predictive capability where decisions based on data, analytics and scientific experimentation have a leading role to play in the Future of HR.

Some of the companies changing this space present at the London event included Google’s People Analytics Team and IBM’s SmarterWorkforce Team they suggested 6-7/10 if they were to grade themselves on their People Data Capabilities – that left the rest of our audience still on the starting block!

A report by KPMG“People are the real numbers – HR analytics has come of age” (published March 2013), argues that HR teams use HR analytics in a way that is basic and generic and provides “little in the way of predictive data or actual insights that could have a positive impact on the success of the organization”.

Personally, from the conversations I have had this year, its seems likely the next 2 years will see real innovation kick off in this space actually making HR quite an exciting place to work ;) …. not considering the social analytics space or the global energy flow in the HR Tech Start-up space. Europe being Europe, it will be interesting to see what will happen when the new digital employee data privacy laws come to fruition in January 2014 … if companies can actually legally exercise the opportunity that is currently being buzzed as Big Data for HR.

European HR Investment #3

SaaS HR

It’s estimated that 90 percent of Fortune 1000 companies plan to replace their human resources management software in the next 4 years. Many are replacing these legacy on-premises systems with cloud-based HR systems. On top of hardware savings, enterprises using SaaS HR say they spend less on support.

HR is one of the business functions where adoption of SaaS software is highest, and the trend has accelerated this year because of cost – the analysts are touting various different numbers on companies looking to change – it seems to hover somewhere around 40-50%. When it comes to the cloud, “true SaaS will dominate — software that has been architected specifically for this model, that is multi-tenant and highly configurable,” says Naomi Bloom, Managing Partner of  Bloom & Wallace.

Naomi, one of our favorite keynotes from last year, is back again this year with the added experience of last year’s event to discuss Poirot’s Order And Method: Making The Business Case For HR Technology and SaaS. For at least the last decade, it hasn’t been sensible or, in most cases, even possible to make the business case for investments in HRM and HR technology on the basis of headcount or even TCO savings. Those heads and much of that TCO has long since been squeezed out of your budgets. Rather, we’ve been making these investments in order to improve business outcomes — or at least to improve those HRM metrics that we believe will lead to improved business outcomes. Therefore, to make today’s business case, we must create a clear and direct line of sight:

  1. From our organization’s overall business objectives and needed outcomes,
  2. to what human resource management (HRM) must accomplish to support achieving those objectives and delivering those outcomes, and
  3. from there to what HRM delivery system (HRMDS) design is needed and, therefore, what investments are needed in HR technology.

European HR Investment #4

Performance Management

Anyone who knows me, knows my views on performance reviews and that dirty word performance appraisals. My last from January 2010 when I had more time for blogging: Performance Appraisals: Another 10 Years?

I am delighted with the way things have turned out since my early days blogging -  its not that long ago, but back in the day the majority of companies were afraid of social media in the same way as they were once wary of the telephone, email and internet …. and it seems very likely now that Social Performance Management will edge out the annual review. One of our speakers on next weeks event and flying the flag for Ireland has written a book on the subject, and I know the team at Heineken bought a box of Eric Mosley’s new book The Crowdsourced Performance Review.

You’ve heard it a million times before  …. Most formal frontline performance evaluations assess staff on job competencies and adherence to behavioral standards, but stop short of assessing performance against outcome measures meaningful to organizational success – not much has changed!

European HR Investment #5

Strategic Workforce Planning

Ok, this is going to sound mad but based on my last 2.5 years living in the world of HR Tech, I have seen a level of planning in technology (most organisations have technology roadmaps) that stands out in stark contrast to the level of planning that is put around the costliest and most important asset …. our people. We talked about it in 2011, Strategy First, Technology Second – it became our theme for last years event.

Where is our plan around the following 5 critical workforce issues? What will be the most critical capabilities for us in 5 years? What capabilities that we have now will not be needed in the future? What roles will change the most? How will I access critical capabilities? Which capabilities will I own / buy / automate?

In “The State of Human Capital”, McKinsey identified Strategic Workforce Planning as one of the top 3 priorities (#5 here!) for now and the future for HR functions. However, they acknowledge that progress in this space has been limited due to the following challenges:

  1. A lack of capability of HR professionals
  2. A support function mindset
  3. An inability to relate the ROI or business impact of their function

In terms of the solutions, McKinsey identify three things HR functions need to do to be successful:

  1. Engage with the organisations business leaders strategically
  2. Take risks in pursuit of innovation
  3. Redouble every effort to manage HR efficiency

The art of Strategic Workforce Planning and the HR Capability needed is still in its infancy despite the label existing for quite some time. Not surprisingly the most difficult part about developing a plan is just getting started.  All plans share common components that include: 1. Technology. 2. Organizational Strategy. 3. Knowledge Management Strategy. 4. Retirement/Attrition Projection.

European HR Investment #6

Future of Workplace Learning

“A Confused Picture” – after some 20 interviews with global heads of learning – this is what I heard. On one side of the fence you have the storytellers buzzing and on the other side Digital Media and Mobile Learning Strategies seems all the rage. eLearning seems to have finally been put to bed, or at least I have talked to a lot of our members and they are no longer spending money, rather investing their time in new learning projects … the words being coined in other learning communities – The Future of Workforce Learning.

We are integrating a stream on this for the first time with BP helping us take the lead with a Session entitled: Back to the Future: Learning 10 Years from Now.  Classroom is dead, E-learning is dead – so what now? Even as formal formats fail, the informal online learning boom accelerates, with more people turning to Google, YouTube and Twitter for their on-the-job and social learning. Even learning itself looks like an antiquated alternative to referencing. So what can we learn from what people want? What role is there for us in the free world of informal learning as systems of capture are dismantled around us? Are we just the corporate correlates of Morris dancing?

We will take a look at some of the digital solutions that are helping staff perform, develop & connect – including use of video, social technology, performance support, mobile learning & gamification. By 2014, 47-50% of European workforce will have been born after 1980. It’s time to face up to it … more change!

European HR Investment #7

Mobile

Mobile HR and Recruiting solutions are connecting & empowering talent inside and outside the business. We already experienced in Amsterdam at iRecruit the reality that many dutch students cannot apply for jobs using their mobiles still as most major businesses still have not created career sites and recruitment content built around mobile environments.

Mobile devices, such as smartphones and tablets, are proving to be an effective means to achieve improved worker productivity, real-time decision making, cost savings, and workforce satisfaction.  Employers increasingly see value in having employees learn, share, connect, and access their payroll, expenses, time and attendance and other HR data via mobile devices. Front-line managers enjoy enterprise mobility with access to smart HR reporting tools that provide real-time data on workforce performance and potential, also allowing them to manage their teams in approving projects, hiring, salaries, rewards, etc. all on the press of a button!

At number 7 on our list, while current deployment levels are still relatively low, there is traction in the European Market right now to deploy mobile applications (including payroll and time and attendance). Organizations that are making investments in mobile HR capabilities view robust security as an indispensable element in their mobile solution buying equation.

European HR Investment #8

Rewards

Rapid technological changes, coupled with a growing workforce that spans four generations means rewarding, communicating with and motivating employees is more complex than ever before, especially in matrix organisations.

More and more large companies are offering employees a “Total Rewards” package, which includes compensation and a range of “market-relevant benefits” and professional growth opportunities that recognize individual contributions and performance. The trend is towards an offer that includes helping employees balance a successful career with a healthy lifestyle involving family, friends, community, fun and saving the planet!

Companies are having to do this because more than ever young people are turning away from big business with dreams of working in more exciting start-up environments; its clearly evident in our industry, after 3 years of market consolidation the  HR Tech, Learning and Recruitment Start Up community has exploded over the past 18 month …. there’s even talk that true Innovation in HR will come about for the first time by 2015!  In bridging the Eurozone talent gap job creation has been driven by start-ups, though they employ just three percent of the private sector workforce, start-ups contribute nearly 20 percent of net job creation and small business 60% of the market, so the big firms have their work cut out for them especially when the top half of Europe heals from recession.

European HR Investment #9

OnBoarding

Onboarding has become a Top 10 investment priority in 2013. As technology advances, a more geographically dispersed employee population emerges, and strong competition to attract and retain the best people increases, the drive to help improve the Candidate Experience has much to do with defining the onboarding process, creating an onboarding roadmap, and helping to look at different ways of driving engagement at what is the most critical point in the employee lifecycle.

The importance becomes evident when you look at some of the numbers out there:

  • +30% of European Employees in their current job for less than 6 months are already looking for a new job!
  • Almost 1/3 of executives who join organizations as an external hire miss expectations in the first 2 years.
  • Many companies are now suffering 8-15% annual attrition rates in Europe, and a turn over of upwards of 40% of their entire talent base within 4 years.

Some areas are much worse – shared service centres in Central & Eastern Europe for example, where employers promise the world and the once excited and ambitious youth flowing out from the best Universities are burnt out and disillusioned 2-3 yrs later from their first work experience!

European HR Investment #10

Collaborative Tools

In the era of the “social enterprise,” collaborative activities can make a big difference not only in HR efficiency but in employee satisfaction.

As Lee Bryant one of Social Enterprise Though Leaders at this years HR Tech Europe explains in his synopsis: “Becoming a social business is not simply about using a new class of tools. It is about using internal and external networks and relationships to best effect, maximising productivity and developing an agile, resilient culture to improve all aspects of the organisation’s operations. Encouraging the adoption of new tools is part of the story, but it is not enough. Relationships, culture, leadership, trust, knowledge sharing and collaborative methods are all just as important and these are areas where HR professionals should have a key role to play. But, on the whole, HR is often part of the cultural problem in organisations, not always part of the solution. Instead of leaving this all to IT or marketing functions, HR should be taking the lead in organisational transformation.”  At HR Tech Europe this year we will discuss some of the non-technical starting points, challenges and benefits that can accrue from trying to build more socially calibrated businesses. Strategy First, Technology Second!

If you wish to learn more about how you can join Europe’s largest and happiest Corporate HR Network and where Pan European HR Network members are investing their HR and IT Budgets over coming 24 months please Get in Touch. The above is a sneak peak premised on 3 years of member research! See you in Amsterdam! Marc.

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Marc is founder of the Pan European HR Network.

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