It is often said that the most important asset of an organization is its people. If so, just like any other asset, you’ll need to develop and prevent it from depreciating. Businesses can make better plans and decisions towards improving their current and future workforce by aligning their human resource strategies with the latest human capital trends.
For example, there’s no question that discussions on IT trends and how to successfully establish a blended workforce (humans working side by side with bots) will continue to inundate boardroom meetings in 2020 and beyond. But studies and surveys indicate that the more pressing issues in human capital are still very much about the human experience–finding meaning, fulfillment, and growth in what we do. These concepts may not sit well with corporations since they are intangible and cannot be written on a balance sheet, but they have a huge impact on employee experience; and, therefore, on a company’s business success.
Human Capital Trends Table of Contents
- Socially Conscious Business Model
- Individual Branding
- Flexible Work Options/Remote Work
- AI & Machine Learning
- Power Skills: Soft Skills, Digital Skills, Thinking Skills
- Creative Recruitment Solutions
- Simplified Job Application Process
- VR for Training
- Employee Experience (Belonging)
- Data for People Analytics
- What You Can Do Now for the Future
A company is only as good as its employees. That’s why it’s not only important to find the best talents but also try to to create a work environment that makes them want to stay with your organization. After all, replacing an employee can become very costly for a business. The average cost of employee turnover, for instance, for an entry-level staff is 16% of that employee’s annual salary. For midrange positions, the cost is 20%, while replacing a supervisor can cost up to 213% of the supervisor’s annual salary.
A quick check on the reasons why good employees leave, such lack of growth, rigid workplace policies, no work-life balance, and muddled company mission and vision, all point us back to the human aspect of human capital. This issue is the recurring theme in the trends we will discuss below.
Socially Conscious Business Model
Realizing the expectations of them to do more for the community, corporations are changing the way they do business. From putting primacy on shareholders, they’ve begun engaging in activities and programs that consider all stakeholders. This brought socially conscious business models, such as social enterprise, conscious investing, and conscious capitalism on the table.
Moreover, in a survey by Mercer, 68% of C-suite executives want to push progress on environmental, social, and governance (ESG) metrics in 2020. Executives know that creating a company that conducts business activities while giving back to their community is not only good for the soul. It’s also one great way to attract talent, which impacts profitability.
Candidates will be looking at a company’s core values and would want to join those that match their own. A socially conscious business can also increase retention since it can give employees a greater sense of purpose in doing their work–not just for clocking in the hours.
- Corporations are shifting to socially conscious business models. They conduct business activities while giving back to their community.
- Becoming a socially conscious business is a great way to attract talent.
- Candidates will look at companies that match their values and can give them a greater sense of purpose in their work.
You’re probably used to hearing about companies developing their brand. The trend has caught up with candidates as well. Millennials (projected to make up 75% of the global workforce by 2025), in particular, do not solely look at financial gain as the one determining factor in choosing jobs. They would want to match their personalities with a company that shares the same core values, allows them to have their own beliefs, or gives priority to training and development and flexible working hours.
On top of presenting their skillsets on their resumes, we’ll see more candidates branding themselves as socially conscious, for example. They might also include information about what motivates them, how they best learn new concepts, or how they work with a team.
- Millennial job seekers do not look at financial gains alone when choosing jobs.
- Individual branding, particularly with millennial candidates, is where applicants try to match themselves with companies that share the same core values.
Flexible Work Options/Remote Work
When Covid-19 forced global economies to a slowdown, many organizations searched for remote work tools and solutions so they can provide flexible work options to their employees. But even before the pandemic, it seems that workers have already been putting a high value on flexible work arrangements. Case in point: In FlexJobs’ 2019 survey, 69% of respondents said that flexible work options are one of the most important factors they consider when evaluating a job prospect. Moreover, 78% believed that a flexible work schedule would enable them to live a healthier life, while 80% said they would be more loyal to their employer if they were given flexible work options.
The fight for top talent is fierce. So, if companies want to find the best candidates and decrease their employee turnover rate, they need to look into ways how they can provide flexible work arrangements. These may come in different types, such as a part-time schedule, flexible time, fully remote, a combination of work-from-home and office option, or a freelance contract.
Workers' Thoughts on Flexible Work Options
Source: FlexJobsCreated by CompareCamp.com
- 69% of workers say that flexible work options are one of the most important factors they consider when evaluating a job prospect.
- If companies want to find the best candidates and decrease their employee turnover rate, they need to look into ways how they can provide flexible work arrangements.
AI & Machine Learning
AI and machine learning (ML) will continue to find their way into both the recruitment process and talent development arena. Recruitment professionals can rely on the power of AI when they use applicant tracking software to streamline their hiring workflow, including pre-screening and onboarding. Additionally, AI and ML technology have also proven to be beneficial in helping eliminate subconscious bias among recruiters when evaluating candidates.
For workers, AI can help augment productivity by taking on mundane tasks so that employees can focus on more creative, interesting, and high-value work. This means workers can find more opportunities to upskill in the workplace and can also be more engaged in their tasks. In a study by PWC, 72% of business decision-makers said AI can enable people to focus on meaningful work, while 34% of business decision-makers said AI can help them free up time they can use for deep thinking and creating.
How AI Helps at the Workplace
Source: PWCCreated by CompareCamp.com
- Recruitment professionals can rely on the power of AI to streamline their hiring workflow, including pre-screening, onboarding, and eliminating subconscious bias.
- Employees can have more time to focus on creative, interesting, and high-value work as AI steps in to automate mundane, repetitive tasks.
Power Skills: Soft Skills, Digital Skills, Thinking Skills
As a result of AI taking over routine tasks in the workplace, employers will start focusing on power skills when looking for employable candidates. Power skills are a combination of digital skills, such as data analytics and digital literacy, soft skills like emotional intelligence and creativity, and thinking skills like strategic thinking and computation thinking.
Both governments and businesses should start policies and programs that aim to develop human capital towards acquiring these power skills. Recruitment specialists, on the other hand, may want to start looking at candidates not just for their current skills set but also for their trainability, learnability, and aptitude to operate in a tech-human blended work environment.
- Workers should start developing their power skills (a combination of digital skills, soft skills, and thinking skills) to increase employability in the future.
- Governments and businesses should start policies and programs that aim to develop human capital towards acquiring power skills.
- Recruitment specialists should start looking at candidates for their trainability, learnability, and aptitude to operate in a tech-human blended work environment.
Creative Recruitment Solutions
Talent shortage is the number one challenge recruitment specialists are facing. 87% of HR professionals say that there are “few or no qualified applicants” for the positions they need to fill. As a result, recruiters will need to explore other creative ways to find and keep candidates.
For example, aside from using AI in the recruitment process, talent acquisition teams may also start relying more on recruitment marketing agencies or headhunting firms to find prospective candidates. To cultivate future talent, companies can also rely on learning management tools to facilitate training via the internet or incorporate mentoring programs. A study by Mentorcliq showed that the turnover rate for employees who have been with a company for two years or less and who did not have a mentor was 26%, while that rate dropped to only 8% for those who had a mentor.
Mentoring & Employee Turnover Rate
Source: MentorcliqCreated by CompareCamp.com
- Talent shortage is the number one challenge recruitment specialists are facing.
- As a result, recruiters will need to explore other creative ways to find and keep candidates.
- Companies can also incorporate mentoring programs to cultivate talent and increase retention rates.
Simplified Job Application Process
Still connected to talent shortage and in conjunction with creative recruitment solutions, we can expect to see more human resource managers simplify the job application process. This will not only be for the benefit of their recruitment teams but also–and more importantly–for landing the best people for the positions they need to fill.
If you’re not taking steps to simplify your HR department’s hiring process, you could be losing out on bringing incredible people in your team. When an application is too long or complicated, for instance, 60% of job applicants stopped filling out the application. And when they experience a negative application process, 64% of applicants talked about that experience with friends and family, while 27% actively discouraged others from applying.
Source: OfficevibeCreated by CompareCamp.com
- As the fight over top talent becomes fiercer, we can expect to see more human resource managers simplify their job application process.
- If you’re not taking steps to simplify your HR department’s hiring process, you could be losing out on bringing incredible people to your team.
Disruptions and transformations in the way we work are happening at the speed of light. However, the skills we learned in the past in order to gain a career have remained the same, and there’s now the danger of these skills becoming outdated as organizations redesign jobs. Without the right workforce capabilities, businesses and employees will struggle to adapt to changes in the future.
In the Mercer study, 99% of organizations said they want to embark on transformations in 2020. Still, it also revealed that only 34% of HR leaders are actively investing in reskilling and workforce learning as part of their future strategy for developing human capital. Hopefully, this figure will increase as more business decision-makers start to learn the urgency of this skills gap problem. A good place to start is to offer incentives to people who complete reskilling/upskilling programs or incorporating regular training into their workflow.
- Without the right workforce capabilities, businesses and employees will struggle to adapt to disruptions and transformations in the future workplace.
- Companies need to address the skills gap by offering reskilling/upskilling programs to their employees.
VR for Training
One emerging technology that has been explored by companies when it comes to corporate training is Virtual Reality (VR). By 2022, the VR enterprise training market is estimated to be at $6.3 billion. If trends continue, we can expect the technology to be the go-to training method for many industries, such as insurance, retail, customer service, and safety training, just to name a few.
The immersive learning provided by VR has been seen in some training programs to effectively bring about behavioral change in trainees that makes it easier for them to develop new skills needed for the job. In one case, VR was used to help the front-desk employees of Best Western Hotels develop their soft skills when addressing common customer concerns. The results showed that there was a 2.5% increase in post-guest customer satisfaction and notable improvements in problem-solving resolution.
- Virtual Reality is showing effectiveness in enterprise training.
- The immersive learning provided by VR can bring about behavioral change in trainees that makes it easier for them to develop new skills needed for the job.
Employee Experience (Belonging)
Employee experience is and will continue to be a hot topic for human resource professionals. It pertains to concepts of diversity and inclusion that cover gender, race, age, sexual orientation, culture, etc. There is, however, a new concept that has entered the discussion on employee experience: belonging.
Companies need to make their employees feel that they belong to a community–in this case, a group of coworkers where employees feel confident to express their ideas and know that their opinions and contributions matter to the team. Studies have shown that a sense of belonging in the workplace can not only increase productivity but can also be a better motivator than financial gains. High belonging increased employee performance to 56%, decreased turnover risk to 50%, and reduced sick days leave to 75%.
Benefits of High Belonging in the Workplace
Source: Harvard Business ReviewCreated by CompareCamp.com
- Employee experience includes diversity and inclusion, which cover concepts like gender, race, age, sexual orientation, and culture.
- Helping employees increase their sense of belonging can not only increase productivity but also boost employee retention rates.
Data for People Analytics
The benefits of using data to gain actionable insights for a business has been gaining traction for many organizations in a wide range of industries. For HR professionals, using data for people analytics can help them drive better business and improve workforce management.
With the prominence of SaaS and cost-effective HR software solutions, recruitment specialists and HR departments can easily obtain the tools and data they need to learn more about their people. For example, data-driven metrics can point HR to employees who are likely to leave or who are at risk of burnout. With the right data, they can also see inequalities, make better hiring decisions, and be able to properly measure KPIs and employee performance.
What You Can Do Now for the Future
The trends we highlighted are not only useful to organizations or human resource professionals. Job seekers and practically anyone who wants to have a sneak peek of what’s to come in the future of human capital and the workplace can gain insights from these trends.
If you’re working with a talent acquisition team, foresight and planning on how to attract and keep the best candidates should be on top of your agenda. It may not even be enough to look for talented individuals; your organization may need to cultivate great talent to narrow down the current and future skills gap.
On the other hand, if you’re someone who’s going to enter the workforce in the next few years, or if you’re a working professional who’s contemplating a career change, it’ll be best to invest in your power skills now. Companies will surely be on the lookout for agile employees who can learn and adapt to an ever-evolving workplace.
Finally, if you’re running a business, it’s good to remember that a fat paycheck may not be enough to get the best talents to work for you. Your reputation as a company, how you develop employee experience, and your willingness to provide continuous learning and skills development programs are the factors that will set you apart from other organizations and can make you an ideal company for many young job seekers.
- Employee Retention – The Real Cost of Losing an Employee | 2019
- 9 reasons good employees leave — and how you can prevent it
- The social enterprise at work: Paradox as a path forward
- The top HR and human capital trends for 2020 and 2021
- Flexible Work Plays Big Role in Job Choices
- The Value of Belonging at Work
- Bot.Me: A revolutionary partnership
- Power Skills for Jobs in the Future
- Mentoring Increases Employee Retention
- 12 recruiting statistics to change the way you hire
- Virtual Reality in Enterprise Training
- Case Study: Mursion-Best West