In Europe and North America demographics will have an increasing impact. In less than 10 years 25% or more of the workforce will be over 50. But also by 2012 the 45+ customer group will become more than 40% larger than the 20 - 45 age group. This group will also have the most disposable income as the income peak is likely to occur between 55 and 74.
Despite assumptions to the contrary research shows the skills of older workers are as good, if not better, than most younger employees. HR needs to ensure the skills and experience of older staff is leveraged better, especially to meet the needs of the key older customer group.
During the ‘good times' until 2007 many organisations had developed over- complex systems and unnecessary staff levels or posts as money was plentiful. This often restricted their ability to respond quickly to local markets or changes in circumstances. The downturn has forced them to take significant steps to maximise efficiency through restructuring and realigning together with some job losses. But this will leave organisations leaner with the potential for higher profits in the future. Whilst people like having expert knowledge that proves their value, too much expert power can often lead to over complication and communication issues between functions. HR must work with management to keep operations lean and effective and stop them "adding fat" when the upturn comes.
The globalisation and mobility of the labour market will continue. To leverage economies of scale organisations will increasingly centralise core services, even if they only operate within individual countries. Leaders must be able to deliver the ‘global or central' by taking a strategic overview, to maximise system efficiency and the ‘local', to maximise customer or ‘end user' service. HR has to enable leaders to develop these capabilities as it is key to the development of good customer service, effective operation and growing global leaders.
The pressure on organisations from both internal and external stakeholders on social responsibility and green issues will force management to ensure that these are increasingly factored into almost every decision. Organisations will be expected to demonstrate their credentials in this area and be transparent so that they can be benchmarked to their peers. This could be an increasingly strong factor in the customer's decision to buy. This will require HR to manage cultural change to meet this need.
The pace of change in the workplace is likely to increase still further and the volume of information which has to be assimilated by both organisations and individuals will rise. In the future leaders must quickly identify critical information, otherwise it could result in slower or inaccurate decision making. Further, in times of rapid change HR needs to ensure that staff are given a clear vision of the future as change without purpose causes staff to become confused, concerned and eventually exhausted.
Customers will also have increasing information access, thus enabling them to quickly compare a larger number of potential providers over a much wider geographical area than before. Thus organisations must deliver the best products and services to the market to attract and retain customers. HR must help drive a culture where the delivery of the best customer service is a key factor in every team's objectives, whether or not they actually directly service the customer base.
In order to deliver the best possible outcomes with available resources, leaders on every level must get discretionary effort through engagement to maximise the performance of people. But this is not enough. Even with engagement, in most organisations the effort of staff is spread across a large number of unaligned initiatives and targets. In organisations where the effort is aligned to a small number of key deliverables the benefits are significant. HR influences the key factors that align effort and thus plays a vital role in alignment.
Given the need to enhance the performance of people through engagement and the alignment of their effort onto key deliverables then HR must put more effort into development of leadership at all levels. It is only through leaders being able to inspire, develop and align the effort of people that organisations succeed. Leadership is often thought of as a "nice to have" enabled by HR. It is not. HR plays a role in facilitating it but leaders are best developed by other leaders. This is if the final challenge for HR in the future, making clear the responsibilities for the development, engagement and performance management of people between senior management, line mangers, HR and individuals so that great leadership underpins every activity the organisation undertakes at any level.
So you now have some New Year resolutions to consider - Happy HR New Year.
Chris Roebuck is Visiting Professor of Leadership at Cass Business School in London and has held senior HR roles in UBS, HSBC, KPMG and London Underground. He has lectured on leadership at the Royal Military Academy Sandhurst and been an Officer in the British Army.