HR Trends in 2021: Future of

Human Resource Management

The last decade brought an avalanche of change to the HR industry. The rise of
artificial intelligence. The growth of the gig economy. The increased push towards
greater diversity. And, most recently, a global pandemic that has altered the reality of
millions and redefined where and how work gets done. That begs the question,
what’s in store for the future of the industry? This article will look ahead for a glimpse
of which HR trends will continue to drive transformation and which new trends are
emerging to shape the future of work.

Key Takeaways
• Nearly 60% of employees want to work remote full-time after the
pandemic, according to one survey.
 • Technology adoption and deployment is a priority as companies seek to
unify dispersed, digital-first workforces.
• Two-thirds of employees value when their feedback is heard and acted
on.
• In the face of mental health adversity, companies respond by providing
resources, cutting costs and taking other measures to support well-
being.
• Data will be the new currency and a core part of how HR operates in the
coming years.
• Ensuring employees have the skills they need is a top priority among
business leaders.

Trends We’ll Look At

• Virtual work is here to stay
• Companies double down on digital
• Teams play an essential role
• HR design is a strategic focus
• Employee experience is redefined
• HR delivers value through an outside/in approach
• Mental health gets the attention it deserves
• Data becomes the new currency
• DEI receives major focus
• Workers are equipped with the skills and tools they need to navigate
uncertainty
• HR offers guidance to drive success
• Companies show their true colors

Top 12 Trends for 2021

2020 was fraught with change, as organizations around the world scrambled to react
to the global COVID-19 pandemic that affected companies large and small across
every industry. If 2020 taught us anything, it’s that companies that don’t transform
will get left behind by those that do. This applies to developing a digital
transformation strategy that will stick but, more importantly, extends beyond
technology to tackle people-centric issues.

Understanding industry shifts is crucial to keeping pace with the rapid developments
taking place, especially in light of the pandemic. To that end, we’ve consulted
industry leaders and experts to learn the top HR trends for 2021 so you can make
informed decisions for your organization.
1. Virtual Work is Here to Stay
One of the trends we predicted for 2020 was the increasing prominence of the new
way to work – a shift away from the traditional work model toward one that’s more
flexible and worker-centric, underscored by the increasing acceptance of working
from home and the boom of the gig economy.

Little did anyone know – or could have predicted – how true that statement would be,
in all the most unexpected ways. From government-mandated lockdowns to
companies shifting to a full-time work-from-home model wherever possible, the way
work gets done changed drastically.

For some, that change is permanent. Twitter made the decision to let every
employee who doesn’t need to be in the office (such as to maintain servers) work
from home forever if they choose to. In a similar vein, Microsoft announced that
some level of working from home would become a permanent part of their culture,
with an emphasis on giving employees the flexibility to mold their work choices to fit
their lifestyle.

Other major companies like Facebook, Shopify and Slack have also embraced the
new reality that’s normalized and elevated working from home.

When the world opens back up again, it’s clear that the work environment won’t
simply return to the way it was. Gallup data shows that 65% of workers would prefer
to continue working from home post-COVID.

Similarly, IBM found that nearly 85% of respondents surveyed in the middle of 2020
wanted to work at home in some capacity after lockdowns lifted, with 58% saying
they wanted their main way of working to be remote.

Salesforce research offers perhaps the most acute perspective. Of participants in a

May 2020 survey, 69% agreed that “the pandemic will permanently change the
nature of work.” Another survey in June found that working from home full time would
be the most appealing option for 37% of respondents, with another 32% saying a
split between home and the office would be their choice.

It’s clear that an increasingly remote, digital work environment won’t disappear once
the pandemic is over. The ways in which organizations adjust to this reality will play
a major role going forward and particularly affect the next four trends on our list.

2. Companies Double Down on Digital

Given the shift to a workplace that’s increasingly virtual and more disconnected from
an office, another trend we expect to see is a focus on what’s been termed “digital-
first work”. This has far-reaching implications, as companies seek to determine how
this new era will shape their culture and values.

According to KPMG, 77% of CEOs surveyed will “build on their use of collaboration
and communication tools” and 67% are more likely to invest in technology, compared
to 33% investment in worker skills.

Similarly, the 2021 Deloitte Global Human Capital Trends report found that
“introducing digital collaboration platforms” is the most important factor in sustaining
this new way to work.

Research by renowned HR thought leader and analyst Josh Bersin took this concept
a layer deeper. In his report The Big Reset Playbook, he highlighted balancing a
hybrid work environment as one of the priorities of the return to work. Countries not
facing COVID-19 restrictions have develope d a hybrid approach, with workers going
to a physical office but not as regularly.

“The challenge now,” according to the report, “is learning to facilitate connections
and collaboration in this hybrid world in which many employees continue to work
remotely but periodically meet with others for in-person collaboration and
innovation.”

When we asked David Millner, Founder and Consulting Partner at HR Curator, for
his take on top strategies we can expect in the coming years, he also said digital will
play a major role. His perspective, however, is that digital HR goes beyond
supporting changes that lead to “transformation-based initiatives”.

“Digital HR is about process optimization in which social, mobile, analytics and

cloud-based technologies are leveraged to make the HR function more efficient.

“However, the application of new technologies is not what makes the function digital.
It’s also about culture alignment, talent practices, structures and processes to
balance efficiency and innovation opportunities, all focused on ensuring there is an
ability to provide a clear, sustainable, measurable impact on the organization as it
continuously transforms.”

3. Teams Play an Essential Role

We asked Steven Cates, Graduate Professor of Human Resources Management at
Purdue University Global, for his thoughts on where HR is heading the next few
years.

“The concept and creation of virtual teams that goes along with virtual work will
become a huge issue moving into 2021,” he said.

Deloitte also highlighted “superteams” as the way of the future. A superteam

combines people and technology to produce outcomes more quickly and at a greater
scale than would otherwise be possible.

Factors that contribute to successful superteams, according to their survey data,

include:

• Creating a “culture that celebrates growth, adaptability and resilience” (45%

of executives surveyed).
• Enabling a capable workforce “through upskilling, reskilling and mobility” (41%
of executives surveyed).
• “Implementing new technologies” (35% of executives surveyed).
Beyond the presence and importance of teams, Cates brought up some challenges
that HR will face. “How will [employees] be trained? How will they communicate?
How will they develop bonds among members? How will they be evaluated for
performance?”

Millner had a similar take when asked about the pandemic’s effect:

“The most challenging shifts have related to changing core HR practices such as the
remote onboarding of new employees, the shift to virtual/online learning and
development interventions rather than the more traditional face-to-face practices that
employees have been used to. Additionally, for those organizations that are still
recruiting new hires, they have had to refine assessment methods and techniques to
embrace more online methods such as video-based interviews and automated-
based sifting.”

In Cates’ opinion, looking to the past will be a critical strategy going forward. “We
should look at the lessons that teams taught us from the 1980s and how they failed,”
he said. “They failed due to top management not investing in the infrastructure that is
needed to train and evolve teams so they can perform the intended work they were
designed to perform.”

A central component of that infrastructure is HR design.

4. HR Design is a Strategic Focus

According to Millner, the concept of design should be a prominent focus over the
coming years.

How does this work out? Millner believes HR design aids strategy in three important
ways:
 • “Shaping the design of the new organization of the future.
• “Designing the new and re-shaped jobs that new working practices and
automation will demand.
• “Identifying the new capabilities and requirements that the new world of
work will make upon the workforce, its managers and its leaders in terms of
behavioral and technical demands.
“This means that some of the old techniques that don’t seem to be a part of the
regular HR toolkit (such as organizational design, job design, scenario planning, etc.)
need to be revisited and HR practitioners reskilled as necessary,” Millner continued.

“Organizational design and change management” was also the second-most

important priority for HR leaders in 2021, according to Gartner research. Challenges
cited include managers who aren’t equipped to lead change (37%) and employee
fatigue due to the amount of change happening (36%).

Digging deeper, Gartner found the main issue to be organizations’ inability to react
quickly in response to changing conditions. Factors that contribute to this friction, as
Gartner termed it, range from rigid processes and overwhelmed teams to a work
design that’s misaligned.
Gartner suggests that to deal with this and create a responsive workforce,
companies need to clarify team boundaries, ensure work design lines up with how
work actually happens now and formally create process flexibility.

On the subject of work design, Deloitte noted that in addition to things like investing
in collaboration tools and redefining expectations for schedules and meetings, as
mentioned above, there’s also an emphasis on aspects like leadership training and
access to the appropriate technology to support work.

However, their research also found a disconnect between executive and employee
priorities. Most notably, workers ranked “improving worker well-being” as the third-
most important outcome, while it ranked eighth out of nine according to executives.

As we’ll explore in trend six, the emphasis on well-being, particularly mental health,
is going to be a key focus this year and moving forward.

5. Employee Experience is Redefined

Employee experience (EX) was the third most important key initiative among HR
leaders in 2019, according to Gartner. And while Gartner’s most recent report on HR
leader priorities for 2021 places employee experience as the fifth highest, it’s
undeniable that this trend will continue to be relevant and important heading forward.

Focusing on the experience that employees have with the company, much as a
brand focuses on the customer experience, can:

• Boost productivity
• Improve satisfaction
• Lead to greater employee loyalty
 • Encourage investment in the company’s vision
However, thanks to the slew of changes caused by the pandemic, the employee
experience has taken on new shape and meaning.

“The battle for the hearts and minds of employees’ has become even more
important,” Millner said, “especially when the leadership/management and employee
relationship in a number of instances is very different to how it has been previously.”

Formerly in-person connections have become completely technology-based. “When

it comes to leading and engaging people, you never really know how someone
responds best until you’ve worked with them for a while and entered into a
meaningful dialogue with them,” Millner explained. “Both of these elements are now
very different.”

How does that play out at a practical level moving forward?

“The link between the rise of automation and the employee experience is being
made to provide personalized solutions and information for the workforce in a cost-
effective and sustainable way. HR will need to focus on those critical HR practices
and understand how they can be improved and made more relevant for the
workforce of tomorrow,” Millner said.

Another way for companies to improve the employee experience in uncertain times
is to give employees a voice. A Qualtrics report found that gathering feedback from
employees and then acting on their input is the best way to improve EX, with 65% of
employees saying it’s very or extremely important for their company to listen to
feedback. The study also found the following benefits of “turning feedback into
action”:

• Employees are twice as engaged compared to those at companies with no

listening program.
• Almost 70% are very or extremely likely to stay with a company longer.
• More than 90% will be more resilient in the face of change.
However, stopping at EX improvement isn’t enough, according to Dave Ulrich, a
professor, author, speaker and HR thought leader. He believes the idea of the
employee experience needs to be taken a step further for organizations to truly
realize the benefits. “Building employee experience is not enough—HR must link
employee experience to customer experience and investor confidence,” he wrote in
an article shared with us.

“Many suggest that ‘people are our most important asset,’ but today, that should be
modified to ‘our people are our customers’ most important asset.’ HR initiatives that
foster the right talent for customers will have much more lasting impact in a perilous
world. As customers experience dramatic pandemic change, talent has to adapt as
quickly (e.g., using digital information to access products and to manage people
virtually).”

6. HR Delivers Value Through an Outside/In Approach

Another trend Ulrich believes we’ll see is HR impacting business success through an
outside/in approach. In the same article, Ulrich wrote that this approach is the next
“wave” in the evolution of HR’s contribution:

“The outside-in wave moves from value creation to value delivery when HR
‘customers’ are not just employees, leaders or business strategies inside the
organization but also stakeholders such as customers, investors (debt or equity), and
communities outside the company. HR value delivery is captured when HR analytics
are not about activities with scorecards, dashboards and insights but about the
impact of HR activities on key stakeholders.”

This HR contribution spans three core areas: talent, organization and leadership.
And while Ulrich pointed out that these spheres aren’t new, he said, “They are even
more critical in responding to current challenges and discovering future
opportunities.”

Here are a few key takeaways:

• Talent: “[Traditional] talent-related efforts can evolve to be viewed outside-in

to respond to changing times by ensuring that the right competencies are
those that deliver customer and investor value, and by linking employee
experience to customer experience.”
• Organization: “Our research (The RBL Group and University of Michigan)
found that the capabilities of an organization have four times the impact on
business results than the competence of individuals. For example, teams with
individuals who work well together as a team will outperform a team of
individual all-stars that don’t work well together.”
• Leadership: “Employees often mimic what their leaders do, and organization
capabilities often reflect leaders’ personalities. More importantly, leadership
at all levels of the organization signals thoughts and actions that get attention.
In the current uncertain world, it is more important than ever to ensure that
the right leadership exists to create value for customers and investors.”

7. Mental Health Gets the Attention it Deserves

One of the most palpable impacts of the pandemic has been its effect on mental
health. An SHRM report from the first half of 2020 found that up to 35% of
employees surveyed experienced depression symptoms often, while 41% reported
work burnout and 45% said they felt “emotionally drained from their work”.

Furthermore, a survey conducted by Hibob discovered that among workers in the

U.S. and U.K., the pandemic caused mental wellness to drop 27%.
We’re living in unprecedented times. It should come as no surprise that the stress
and uncertainty facing vast amounts of the population have taken a toll. As
organizations scrambled to react to a crisis that was beyond their control, it thrust
well-being forward as a factor that couldn’t be ignored.

Companies like Chevron, EY, Verizon Media and TIAA aided their employees’
mental health in a variety of ways – access to licensed counselors, a recognition
program, a daily newsletter with resources, monthly challenges to promote mental
health and more.

This emphasis will continue in 2021. A report by Business Group on Health identified
some key areas of expected growth in the mental health arena where large
companies are concerned:

• More than 90% of employers will offer telemental health.

• The number of organizations providing mental health resources will climb
from 69% in 2020 to 88% in 2021.
• Costs for mental health services will be waived or reduced in 54% of
companies in 2021.

8. Data Becomes the New Currency

A top strategic focus of HR over the next few years, Millner believes, is a focus on
data. The shift to remote work caused by the pandemic, he explained, meant
employers had to increasingly rely on tools to gauge how engaged and productive
employees were, and, by extension, turn to data insights for direction.

“Data is the new currency when it comes to the workforce,” Millner said, “and as long
as HR retains that human touch, the advent of data should not scare any HR
practitioner.”
Why, exactly, is data taking center stage?

In Millner’s view, it provides understanding of three pivotal areas. First, it shows how
successful HR practices are in adding value at the strategic or business level.
Second, data allows HR to identify ways to enhance practices and the employee
experience. Third, it enables HR to show how its various functions align with related
strategies and commercial demands.

In terms of the impact at a tangible level, data is critical, according to a recent Mercer
report. It found that more than 60% of executives say the top HR trend offering
impact is using talent analytics to make decisions rooted in data.

Millner concluded by saying, “People analytics is not going to go away and it will be
an integral part of the way that all HR functions operate over the next few years.”

9. DEI Receives Major Focus

Over the years, companies have faced increasing expectations – particularly from
younger generations – to support DEI initiatives (diversity, equality and inclusion).
Matters of diversity and inclusion have become part of the conversation as HR
professionals seek to address bias, unfair wages and other problems.

In 2020, a Rolodex of news headlines highlighted new issues, measures and

movements that have driven DEI even more to the forefront. In response, companies
from Google to Nielsen and beyond are emphasizing these matters more than ever.
In fact, 81% of CEOs indicate their business has or will “publicly announce new anti-
black racism measures,” according to KPMG.

Another outcome of 2020, spurred by the pandemic, is the decrease of women in the
workplace. McKinsey research shows that women are nearly 1.5x more likely to
leave the workforce, with the U.S. potentially losing more than 2 million women all
told. New home life demands created by school shutdowns and other factors played
a major role. McKinsey reported that 15% of mothers are spending five or more
hours on their household than before the pandemic, compared to 7% of fathers.
DEI is a focal point among executives, according to Bersin’s research. This
carries through to managers, with HR executives agreeing that training for
middle managers – who are often overlooked – is imperative to help address
well-being and D&I issues.

10. Workers are Equipped with the Skills and Tools They
Need to Navigate Uncertainty
The war for talent has been a hallmark of the past several years. Thanks to
historically low unemployment rates and a candidate-favored market, companies had
to battle for top talent. The past year saw that trend, like many others, redefined by
COVID-19.

The new frontier of the talent war, prompted by the pandemic, will hone in on
empowering employees with the tools they need to gain the skills they need, rather
than simply attracting top talent from outside the organization to fill vacancies.

A KPMG report found that CEOs view talent risk as the top threat to growth thanks to
the pandemic, and “building skills and critical competencies” is the top priority in
2021 for 68% of HR leaders, according to Gartner. What’s more, Deloitte data found
that more than half of respondents indicated that anywhere from 50%-100% of
employees will need to change their skills over the coming three years.
One way companies can cope with this new normal, according to Bersin’s report, is
to emphasize internal talent development and mobility. His research has found that
reinventing job roles and quickly redeploying workers have the greatest impact.

The matter goes well beyond merely reskilling, according to Deloitte experts, who
suggested that resilience – helping workers, and by extension organizations, adapt
to uncertainty by supporting them with tools and strategies – forms a vital part of the
equation.

The continued rise of AI and robotics is a central driver of this need to adequately
equip employees in the face of this evolution. A McKinsey survey found that 68% of
executives expected hiring to increase across automation and technology roles, with
35% saying AI, automation and robotics were specific areas that would require more
skilled workers.
11. HR Offers Guidance to Drive Success
The concept of HR guidance, delivered using an organization guidance system
(OGS), is a trend Ulrich predicted for 2020 and expects to play a significant role
moving forward.

Such a system, he explained in a LinkedIn blog post, “shifts thinking about and
actions in organizations from being descriptive to prescriptive.”

It does this, he said, “by starting with desired outcomes from key stakeholders inside
(e.g. employees’ competence, well-being and productivity, and business strategic
clarity, positioning and delivery) and stakeholders outside (e.g., customer net
promoter scores or customer share, investor profitability today and confidence for
tomorrow, and community reputation for social responsibility).”

In essence, an OGS identifies desired outcomes related to four spheres that are
critical to business success: talent, organization, leadership and human resources.
“Once desired outcomes are articulated,” Ulrich explained, “an OGS informs choices
about how to best reach the outcomes. Guidance is less about what is done and
more about what should be done.”

Notable circumstances from 2020, including pandemic demands, economic difficulty

and social unrest, have given rise to the need for innovation, Ulrich said. “Guidance
helps identify the best solution based on empirical data.”

He also noted that, “Technology has enabled digital information that moves from
descriptive dashboards and scorecards to insights based on big data to guidance to
determine which activities provide specific outcomes.”

Finally, in another LinkedIn article, Ulrich concluded: “HR’s opportunity to create

value through targeted organization effectiveness initiatives in talent, leadership,
organization and HR can now be realized. A portfolio approach to these initiatives
will better allocate resources (time, energy, money) to key organization effectiveness
priorities.”

12. Companies Show Their True Colors

Zooming out from the preceding trends, one final prediction comes into focus: 2021
will be the year that employers and employees alike, from the C-Suite to the line
worker, discover the true nature of their organization.

The pandemic, social justice causes and economic difficulties cast a spotlight onto
companies, and everything discussed thus far circles back to the matter of how
organizations have and will respond as the journey into an uncertain future unfolds.
Values, priorities, culture and more will solidify or emerge, depending on how
businesses react to things like:

• Whether to require vaccination for in-office workers and how they handle
potential ensuing lawsuits.
• How and when to return to work, along with safety measures taken to
alleviate employee concerns.
 • The extent to which employees are allowed to work from home when it’s no
longer required for safety reasons.
• What well-being measures to invest in and encourage among employees.
• How diversity, equity and inclusion practices are woven into the culture of
how a company operates.
• The extent to which managers and executives listen to and then act upon
employee feedback.
• How well employees from the top floor to the home office display empathy
for their colleagues.
• The level to which leaders show trust in their people, rather than trying to
retain control by micromanaging from afar.

Embrace the Future

2020 was a year of drastic, unparalleled change. As we move further into 2021, a
new landscape will emerge, one marked by lessons learned from the pandemic and
new or renewed dedication to areas such as the employee experience, virtual work,
mental health and DEI. Team design and evolution, as well as skill development, will
heavily influence organizations’ ability to execute and succeed.

The move to digital will become even more marked as companies seek to transform
in the face of new challenges, leveraging data to enhance practices, deliver value
and create alignment. HR will also help drive success through guidance and by
taking an outside/in approach.

And finally, in the wake of so many life-altering changes and the presence of a murky
future, where companies land on today’s unique issues will define them for better or
worse.

“This is an exciting time to be in HR and if challenge, innovation, change and

personal growth are of interest to you, then stick around,” Millner summarized.

Zachary Totah HRIS

Contributing Thought Leaders

Dave Ulrich is the Rensis Likert Professor of Business at the Ross School,
University of Michigan and a partner at the RBL Group, a consulting firm focused on
helping organizations and leaders deliver value.

David Millner has a business background followed by 30 years of internal and

external consulting experience in NatWest, Kenexa and IBM. Dave worked directly
with different global and multi-national based organizations offering organisational
effectiveness-based solutions focusing on future proofing their businesses.

Professor Steven Cates serves as a Graduate Professor of Human Resource

Management in the School of Business and Information Technology at Purdue
University Global, the first online university to offer “extreme personalization” to
working adult students.