Why strategy, not technology, will take top spot for HR investment in 2013

by 15 Jan 2013

The year 2013 may see HR professionals turn their attention to 'strategic enablement': in other words, working out how to use technology to improve performance. Marc Havercroft believes a back to basics approach is on the cards.

In the past several years, the HR industry has focused primarily on investing in technology, seeking to gain capabilities in areas like cloud, mobility and data analytics. This year, we expect HR professionals will turn their attention to strategic enablement: in other words, working out how to use technology to improve performance. New strategies will drive growth in emerging HR trends, most notably social business and contingent labour as enablers of workforce productivity. Driving these strategies will be a new generation of HR leaders who are increasingly open to innovation and business insight.

The HR industry’s spending focus will shift from technology to strategic enablement. HR professionals now have at their disposal unprecedented technical resources to support the entire process from recruitment to retention. So far, investing in technology has been the industry’s priority; the next step is developing strategies which make these investments worthwhile. 2013 will be when HR managers start adapting existing policies and business models to make the most use of technology infrastructure and services, as well as developing new ones to take advantage of the capabilities which new technology offers.

IBM’s own focus on process improvements has seen us gain $1.4 billion in productivity over the past two years. Labour analytics have helped boost employee utilisation by 18% in the last four years, while using data to optimise our sales assignments has generated over $1 billion in revenue opportunity during the same time period. Strategic enablement of technology at IBM continues to be our foremost driver of cost and productivity improvements worldwide.

New strategies will seek to leverage a variety of emergent trends linking technology and improved workforce outcomes. Social business will become a (if not the) dominant mode of driving employee engagement, with HR professionals using social media’s capabilities to simultaneously converse with workforce members on a personal and group level. IBM’s internal social computing initiative, IBM Connections, now connects more than 600 thousand current and past employees through blogs, wikis, and over 78000 online communities linking expertise in different subject matters.

The smarter use of technologies (like cloud services and mobile devices) will result in new organisational and workforce values around flexibility, productivity and collaboration. 2013 will likely see the maturity of contingent talent as a core resource for business growth and development, alongside more unconventional means of talent procurement like crowd-sourcing and co-creative labour. This will in turn give rise to attitudinal changes in how HR professionals consider the resources at their disposal: contingent talent’s flexibility, for example, will erase stigma around its use and lead to new opportunities for contingent workers in areas like learning and leadership development.

In 2013, HR professionals will be focusing on building strategies which not only enable new technology, but also address the workforce’s evolving composition and values. These changes will themselves be playing out at the industry’s executive level. The incoming generation of business leaders are already more open and adaptive to new technologies and values, looking at how to maximise their positive impact rather than resist their spread. Nor will this trend be confined to HR executives: members of the broader C-suite (like Yahoo’s new CEO Marissa Mayer) are increasingly focused on building cohesive workforce cultures to impact business profitability, rather than the other way round.

With global competition for talent only continuing to grow, businesses make HR their priority in 2013. The greatest determinant of success will be how organisations leverage technology’s underlying capabilities through strategies which harness and utilise ongoing investments in technology. Next year will see HR executives combining technical proficiencies with expertise in how comprehensive HR strategies can drive underlying organisational productivity and growth. In many ways, it’ll be a year in which the fundamentals of HR begin to lead the rest of the business.

About the author

Marc Havercroft is Leader HRO Strategy and Solutions, IBM Growth Markets