Human Resources

Excellent people operations dramatically improve a company’s overall performance.

Human resources has long been evolving beyond its traditional—and outdated—role as a mere processor of administrative transactions. Today, HR is usually viewed as a strategic partner to the business. The intensity of competition and the pace of change demand that the HR function fulfill this mandate. HR leaders need a clear view of their current capabilities, a set of clear priorities linked to the business strategy, and a targeted approach to improve the most urgent problem areas.

To achieve these objectives, company leaders need to take a far more nuanced view of HR and its underlying activities. The HR function can be broken down into 27 constituent areas, ranging from leadership and talent management to strategic workforce planning, employer branding, social media, and diversity management. In each area, it is critical not only to realistically assess a company’s current capabilities—but also to understand the degree to which that activity will become important in the future. Using this insight, companies can specifically invest to improve the areas that matter most.

Companies Need to Act Urgently on Many HR Challenges

From talent needs to digitalization, the pressures to transform the entire HR function are escalating. Organizations must formulate a new view of HR and forge a deeper partnership between HR and the overall business. And they must ensure that each employee is working at the right spot in order to maximize the benefit for the company and the employee. Doing so often requires a fundamental change in HR strategy and operations. Many companies face urgent HR challenges but have low capabilities in handling them.

The following 27 topics were identified in a recent survey as being the most critical HR topics, ranked in order of importance:

  1. Leadership
  2. Talent management
  3. Behavior and culture 
  4. HR and people strategy 
  5. Employee engagement 
  6. Strategic workforce planning 
  7. Career models and competencies 
  8. HR communication 
  9. Performance management 
  10. Training and learning 
  11. Employer branding 
  12. Social media 
  13. Rewards and recognition
  14. HR and workforce analytics

  15. HR staff capabilities
  16. Onboarding
  17. Generation management
  18. HR services and systems
  19. Recruiting processes
  20. Recruiting strategy
  21. HR organization and governance
  22. HR processes
  23. Labor costs and restructuring
  24. Diversity management
  25. Assignment management
  26. HR internationalization
  27. Work councils and union management

How to Set Up Great HR Functions

Creating People Advantage, BCG's leading HR survey conducted jointly with the World Federation for People Management Associations, reveals that getting HR right is more important than ever for competitive advantage. Here are the critical trends shaping HR and people management:

HR Capabilities Correlate with Economic Performance

Analytics and Key Performance Indicators (KPIs) Give HR a Seat at the Table

KPIs Should Link to Strategic Actions

HR Departments Need to Be More Consistent in Their Investment Decisions

HR Needs to Listen More to Internal Clients

Companies on Fortune’s “100 Best Companies to Work For” list have outperformed the S&P 500 in at least eight out of the past ten years.

Read More About the Workforce Trends

More Thought Leadership on HR Trends

Decoding Global Talent 2018

Decoding Global Talent

Emerging trends in the world of work include the UK's decline as a destination and increased expectations everywhere for a better work-life balance.

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