2023 has been a chaotic year for organizations – there’s been so much uncertainty, especially in geopolitics and economics.
The HR function has been a rock for businesses during these turbulent times, according to new data from people management platform Lattice.
Lattice surveyed 1,000 HR leaders globally and found that HR has been remarkedly resilient this year – these teams continue to be engaged (64%) and optimistic about the future, particularly in terms of their job security (65%).
Yes, there’s lots of room for positivity, but that doesn’t mean challenges don’t remain for HR into 2024.
So, here are our top five takeaways from Lattice’s 2024 State of People Strategy report – what must HR prioritize in 2024 if they want their businesses, and employees, to thrive?
1. Fix the disconnect between HR & the C-Suite
Lattice’s survey found that just a quarter (27%) of HR leaders think the C-Suite recognizes the impact that HR has on business bottom lines.
Only 48% said that the C-Suite takes data from employee surveys seriously, and only half recognize that a positive company culture has a direct impact on business outcomes.
This is a big issue – while HR budgets are increasingly at the moment (for 79% of the HR leaders surveyed), this isn’t guaranteed if HR can’t get aligned with the C-Suite.
The data shows that when HR and the C-Suite are in tune that means HR is more confident in their budget increase next year (62% for high-performing HR teams and 24% for low-performing), and almost 1.5 times as likely to see HR’s business value (82% vs 58%)
The question is, how to become a high-performing HR team that keeps its seat at the C-Suite table?
Lattice’s report suggests that HR teams are doing a good job of believing they bring value, but less well at demonstrating it – although 83% think their work has an important impact on employee productivity, only 69% are certain they can demonstrate their business impacts.
Data, analytics and metrics are essential here – so the first place HR leaders need to start is with their tech stack. This brings us onto the second priority for HR teams in 2024.
2. Get the HR tech stack right
For Lattice, “everything begins with the right HR technology” – while this is true around the link between people program investment and business outcomes, it is generally essential and can make or break HR teams in 2024.
Most HR teams surveyed remained very heavily reliant on basic tools (65%) – like Microsoft Office or Google Workspace, and then a general human capital management tools.
But the report shows that is time to go deeper; “HR teams that use more specialized software for activities such as employee engagement or learning are more likely to be achieving their goals”.
However, it is important to remember that HR tech is not a silver bullet; organizations need to make sure they only use the right tools for them, and often sometimes less is more.
New data from HR tech giant Asana’s Work Innovation Lab found that tech overload is damaging productivity and driving burnout – so HR teams, be careful as you build you tech stack, and don’t see AI as a panacea.
3. Embrace AI’s promise at work
AI may not be a silver bullet, but it has real promise for driving efficiencies at work.
Lattice’s report found that HR teams are very optimistic about the promise of AI at work – 76% of HR leaders are already discussing how to use AI in the workplace, and 38% are formally evaluating this emerging technology.
In fact, given that AI is a top priority for the C-Suite according to reports by the likes of IBM, KPMG and Indeed, the fact that HR is really embracing AI and focusing on its strategic impact around productivity and efficiency could help the function retain its seat at the table.
UNLEASH recently attended Workday Rising EMEA in Barcelona where AI was the main topic of conversation.
The Workday executives we spoke to – including Kelly Trindel, the HR tech giant’s chief responsible AI officer – argued that HR does have a seat at the table on AI.
HR tech and AI is not just a priority for HR teams anymore – it is a hot topic for CEOs too.
Trindel shares: “I’ve seen that change since I started working on HR and AI. HR teams are switched on – and they’re coming to the C-suite with solutions.”
4. Drive productivity through engagement
Productivity is top of mind for organizations – it is a central driving force for the ongoing conversations around return to office, versus remote and hybrid work.
Lattice’s study found that performance and productivity was a top priority for 30% of HR leaders – this is a 40% jump on 2022 figures.
Performance shares the top spot with engagement – engagement has held first place for three years running.
50% of HR leaders think the workforce is engaged – and that engagement has gone up over the last two years.
But to continue this trend, Lattice’s study suggests that HR leaders think about performance and engagement in tandem, since engaged employees with access to the right resources, opportunities and training are more productive.
You can’t have productivity without engagement.
But when making this case to the C-Suite, Lattice’s report called on HR teams to not focus on metrics from employee surveys, but also sharing employee stories to really drive home what the data means to executives.
5. Keep DEIB top of mind
While performance has rocketed up HR’s agenda for 2024, diversity, equity, inclusion and belonging (DEIB) has dropped slightly.
It has fallen from 29% in 2021 and 30% in 2022 to 17% in 2023.
The study is not quite sure why this is. “It’s possible that organizations may have completed the implementation of policies and are waiting for them to play out — or they may have backed off on efforts as DEIB has fallen from the spotlight.”
“With DEIB not making headlines in the same way it was during the pandemic, it may no longer be as much the hot topic of conversation in workplaces that it once was,” noted the report.
Either way, there is so much more work to do on DEIB, so Lattice calls on HR to regroup and rethink.
And remember that even if AI is the topic of the moment, there are many potential connotations and challenges around biases and emerging technology.
So, HR teams need to stay vigilant and make sure trust and transparency are top of mind in 2024.
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