As the pandemic normalizes across day-to-day life, NelsonHall expects HR service delivery to adapt to a whole new set of challenges, both through legislation and HR best practices.

The convergence of three key themes are likely to see new HR solutions being developed: staff welfare and resilience, operational efficiency, and automation.

Staff Welfare and Resilience

Pre-COVID, HR priorities looked something like this:

1. Attraction and retention of talent: by the end of 2019, the EU was experiencing the lowest unemployment in 20 years
2. Upskilling workforces and identifying skills gaps, taking into account jobs that are increasingly being replaced by robots and automation
3. Employee engagement and experience, in particular supporting Gen Z and multi-generational workforces
4. Pay: reporting, gender diversity, and addressing the gender wage gap, and removing bias from processes
5. GDPR compliance: the General Data Protection Regulation (GDPR) is the toughest privacy and security law in the world and was put into effect in May 2018 across the EU.

A 2021 study by SD Worx¹ looking across 21 HR challenges has found that the top five European HR challenges in the coming years are as follows (with the percentage of respondents placing each challenge in the top 3):

1. Staff welfare and resilience: 27%
2. Employee engagement and experience: 20%
3. Attracting and recruiting talent: 20%
4. Sustainable employability of employees (retention): 17%
5. Talent development and internal mobility (retention): 17%

The number one priority in the coming years is not surprisingly welfare and resilience, which is the most significant change from previous years. Staff welfare and resilience in this context means supporting workforces through added pressures to avoid burnout/resignations and supporting healthcare and wider work-life needs.

Prior to COVID-19, staff welfare and resilience was not a concept many HR service providers, platforms, or processes had to give much focus to, except as it related to workplace safety, accident reporting, OH&S, and sickness policy design and implementation.

Through the pandemic, individual staff ‘check-ins’ have become key. Without basic health information on their staff, how can organizations address staff welfare and resilience effectively? And today, organizations need to acquire even more information about employees – home location, travel preferences, vaccination, and medical information.

Is this asking too much? As we normalize our new ways of working and adapt to new HR practices, the GDPR provisions create unique challenges for HR, which faces a dilemma of how to respond to welfare and resilience issues while respecting GDPR rules. GDPR obligations need careful attention in this regard, as health information has the protected status of ‘special’ category data under data protection law. Various European countries are introducing local recommendations to help businesses navigate the next stage.

When NelsonHall interviewed HR service providers in 2020, we asked them how they were adapting. Most were creating communication tools to support employee outreach and manage business continuity and furlough during the crisis. Companies and service providers were initially timid to record health information such as vaccination status, but with legislation in various jurisdictions, organizations and HR tech providers are finally stepping up to implement robust solutions to record vaccinations.

NelsonHall expects that the HR priority given to employee welfare and resilience will likely stay for the longer term, so we expect more to be done to implement stronger processes in this area. HR service offerings expected to develop over 2022 and beyond will increasingly address vaccine uptake, mental health support, flexible working, and work office restructures with new procedures.

Operational Efficiency

The SD Worx study also identified that the highest priority in 2021 was addressing operational efficiency. It found that ~50% of organizations recognize operational efficiency as being the top priority or project for 2021. Similarly, NelsonHall’s 2021 Cloud HR Transformation market analysis report² identified the top driver for cloud HR transformation as helping organizations stay competitive with improved cost, process improvements, and a superior employee experience.

Going forward, managing staff welfare and resilience should ideally be more than a line manager function performed through informal ‘check-ins,’ and it is imperative, to keep operational costs down, that HR revisits tactical solutions to build stronger processes to support resilience and welfare across employee populations. Without an HR response, talent attraction and operational efficiency will be challenged. The HR-specific COVID responses and workplace practices of organizations are critical now, especially given that many employees have experienced new-found benefits in working from home and have increased work-life balance demands and/or preferences.

Automation

Finally, what hasn’t changed? The SD Worx study found that in both 2020 and 2021, looking across 19 different HR functional and cross-functional areas, the top priority and the projects most organizations looked for help with from external specialists was improved HR process automation.

Looking across the cloud HR transformation market, NelsonHall’s 2020 report found that 5% of organizations interviewed were using robotic/AI automation services from providers, and this increased to 18% in 2021. The satisfaction level across organizations serviced also increased from a score of 4.0 out of 5.0 to 4.3/5.0. Automation can’t solve all needs for all processes, but in times of increased stress and to support the mass disruption that many businesses have had to face, a service partner strong in automation and technology as well as compliance can certainly save the day, and arguably should be table stakes when selecting a provider.

Summary

NelsonHall expects that in 2022, more HR offerings will be developed to support improved automation around staff welfare and resilience and help organizations drive greater operational efficiency while supporting employees’ individual needs with personalized HR service offerings. Part of addressing individual needs will also include a longer-term emphasis on flexible or remote working, a key factor in attracting and retaining talent over the next year. Finally, given the complexity of European legislation and storing data, providers need to be very savvy with the GDPR and help clients establish robust processes to make an impact. 

HR may be cautiously putting in place new processes that store more personal data, but unless HR steps up, operational inefficiencies are likely to persist; HR can no longer afford for the management of staff health and welfare to be primarily a line management responsibility. Further, a lack of coordinated action could exacerbate staff burnout or resignations at the management level and discourage new talent if the organization is not seen as an employer of choice.

1 SD Worx 2021 ebook: Ride smarter not harder, Towards people-first digital HR

2 NelsonHall’s 2021 market analysis report: Cloud HR Transformation Services