Global HR Outlook Q3 2023

This quarter, the sentiment in human resources is one of cautious optimism, where discussions of recession and layoffs have given ground to a focus on growth and innovation. We are also detecting some exciting undercurrents of change as we prepare for 2024. Below are some brief highlights:

HR Business Partners in Demand

HR Business Partners remain in high demand. Organizations driven by continuous evolution through growth, M&A or change/transformation activity are seeking business-savvy, analytical HR partners who possess strong skills in change management, transformation, organizational design, and culture integration and building. HR business partners who can effectively showcase their expertise in building leadership benches, succession planning, strategic workforce development, and large-scale capability building initiatives will always find themselves in contention for top positions.

The HR Shared Services Opportunity

Around the world, we have seen more tasks and responsibility going to the area that is interchangeably referred to as HR Shared Services, People Services, and HR Operations. We are seeing more of the advisory elements moving into this function and we are hearing about larger percentages of enquiries being managed by HR Shared Services including by chatbots. Some of this movement is to ensure that there is deep focus on strategic and high-value work for the HR business partners, along with a focus on building efficiencies and driving a better employee experience via providing prompter, more user-friendly services. However, perhaps there is something bigger at play for the most forward-thinking organizations.

A leading CHRO who is a much-admired friend of ChapmanCG recently shared her vision of HR Shared Services driving the automation, digitalization, and transformation of the employee experience. She observed that there is a feeling among many that HR Shared Services does manual, repetitive work that is a waste of time for the broader HR team. She went on to explain that this is in part true. However, digital natives (Gen Z, Gen A and beyond) have an assumption about how technology must work, so to win the talent that is coming through for the next two generations and beyond, their employee experience must be digitized and automated in a way that HR has not focused on before. “That in my mind sits in HR Shared Services’ wheelhouse”, she said. “This is their moment to seize the opportunity and AI just further ratchets that opportunity upward” she added. Perhaps in future this lower-profile third leg of the HR stool will become a specialization which aspiring CHROs should gain deep experience in or risk being left behind.

CoEs/Specialist HR Functions are Vibrant

In our conversations with CHROs worldwide, the specialist areas are dynamic and evolving, with talent, learning, and capability building at the forefront. The use of technology to support skills-based hiring and internal talent marketplaces is an area of heavy focus. However, a real challenge lies in change management, as it involves influencing leaders to adopt non-traditional hiring approaches outside of their comfort zones. The learning function seems to be receiving some additional attention as organizations look to upgrade the quality and relevance of their learning offerings.

Many organizations have increased their bench strength and strategic capabilities in Total Rewards. There has been a lot of movement in the market, and we have noted a need for both strategic experts and emerging talent. Heads of Reward who can “make the complex simple” for business leaders and their HR partners are in short supply. The need for contemporary and compelling reward frameworks and offerings, post-COVID has in part driven this.

Business is focused on building the internal talent bench and we are seeing internal mobility becoming a larger part of this conversation around the world. Post-COVID, mobility has become more of a pain point for many organizations, with both internal and external talent being less willing to relocate. Companies are finding themselves having to factor in hybrid and remote work as part of the standard. Repatriation and the risk of losing talent when they return to a home market remains very much a threat and an issue which few companies have handled well over the years. Creating internal career pathways and the learning activities that support a mobility strategy are also high on today’s much more visible mobility agenda.

Employer Branding: Work in Progress

Businesses are investing more in their EVP with many leading organizations running focused projects (partnering with an external provider or working through their internal talent team) to ensure they are well positioned not only for attraction of new talent, but retention of existing talent. There seems to be a general sentiment that the investment in this area over the past few years has been worthwhile.

Back to the Office Remains a Hot Topic

Given the time that has passed since the pandemic, it is interesting to note that “back to the office” remains an extremely hot topic for employers and employees. We are seeing a more pronounced trend of employers pushing to get people back into the office for more days and often full-time.