To shed light on the future of HR, Erudit hosted a live webinar titled ShockwaveTalk: The Future of HR - What needs to change? featuring Wagner Denuzzo, a renowned HR expert with over 20 years of experience as a clinical psychotherapist turned organizational change consultant. From understanding the current context and trends in HR to the challenges facing the industry, this article will provide meaningful insights from Denuzzo and a practical approach on how organizations can prepare HR for the future.

“The world is anxiety producing. The world is complex. I don't think anybody knows for sure the pathway to the future, but I think people who are reluctant to live in this ambiguity are going to have a hard time.” - Wagner Denuzzo, LCSW

Introduction to the future of human resources

HR is traditionally seen as a support function to handle administrative tasks such as hiring, training, and payroll. But since the pandemic flipped the world of work and accelerated digitization and flexible working conditions, the role of HR in the workplace has evolved significantly.

According to Denuzzo, it is clear that HR needs to adapt to the digital era and the evolving needs of organizations and employees. Denuzzo emphasizes the importance of understanding the unique context of each organization, including its maturity level, industry shifts, and competitive landscape, in order to create effective HR strategies.

He also highlights the need for HR to make leadership ready for the future, rethink workplace design for hybrid and flexible work arrangements, and prioritize skills development in the digital ecosystem.

“Clarity creates capacity.”  - Wagner Denuzzo, LCSW

Denuzzo stresses the significance of clarity in strategic intent, as it creates capacity for employees to learn, innovate, and drive value for the organization. In essence, the future of HR will require HR professionals to be adaptable, forward-thinking, and transparent in order to meet the evolving needs of organizations and employees in the dynamic business landscape.

Evolving HR starts with understanding people

According to Denuzzo, the new workforce can be described as being in "five states," with flexibility and work-life harmonization playing a central role.

1. The workforce is distributed.

One of the key shifts in the new workforce is the increasing demand for flexibility in work arrangements. Denuzzo emphasizes that even if organizations try to bring employees back to the office, those who are not interested in being there will continue to seek hybrid or remote roles that fit both their work-life balance and opportunities to tap into highly skilled talent across the globe. Denuzzo argues that if organizations are located in expensive cities, they may struggle to achieve diversity in their workforce. Therefore, it's important for organizations to be open to finding talent in remote areas and embrace the distributed nature of the new workforce.

2. Dynamic careers are the new norm.

Another significant change in the new workforce is the dynamic nature of employees' career life cycles. Denuzzo notes that the traditional notion of employees staying with an organization for 5 to 10 years or more is no longer relevant. The half-life of an employee's tenure is now around three years, and organizations need to adapt to this reality. 

Organizations need to focus on building connections and trust with early-career employees in their first year, providing opportunities for growth in the second year, and helping employees plan their next steps in the third year. Digital platforms play a critical role in supporting these efforts, as they can help employees access resources, manage performance, and plan their careers.

3. Digital is vital.

Finally, Denuzzo stresses the importance of digital transformation in the new workforce. Organizations need to have a digital strategy in place to ensure that employees can easily access the information and resources they need. This includes having a content management system in place to help employees and managers find relevant information quickly and easily.  For example, Factorial provides HR with the ability to upload crucial documents, such as contracts and payslips, into the system. This streamlined process allows employees to conveniently add their signature and access these documents whenever necessary.

The employee experience is no longer about happy hours and team lunch-and-learns, but a sense of belonging and support even when working virtually. Organizations that fail to embrace innovation in order to engage and support their workforce in the digital age risk falling behind.

4. Diverse teams win.

Diversity and inclusion are also key aspects of the new workforce. Denuzzo highlights that diversity goes beyond demographics and includes diversity in thought leadership, ways of thinking, and multiple identities that employees bring to the workplace. Organizations need to embrace and value this diversity, and create an inclusive environment where employees feel respected and valued for their unique perspectives and contributions.

5. Discerning leadership fosters growth.

The new workforce is characterized by flexibility, diversity, and digital transformation. Leadership needs to recognize and adapt to these changes to attract, retain, and engage top talent in today's dynamic and evolving work environment. 

Embracing flexibility, promoting diversity and inclusion, and investing in digital transformation from the top down can help organizations thrive in the new workforce and stay ahead of the curve in the ever-changing world of work.

“Don’t underestimate the intelligence of your people.” - Wagner Denuzzo, LCSW

The effect of the pandemic on us all

When asked how the COVID-19 pandemic has had a significant impact on the workplace and the role of HR, Denuzzo pulled from his experience as a clinical psychotherapist.

“We need to understand that emotional reactions come after events have passed, because during the event we just focus on surviving, keeping our jobs, keeping our families safe. So what you're seeing in 2023 and 2024 are the residues of the emotional impact of going through a traumatic experience.”  - Wagner Denuzzo, LCSW

In a tender moment, Denuzzo highlighted the profound impact of the pandemic on mental health and emotional well-being. He also points out that while some may have initially found comfort in being at home with loved ones during the pandemic, this doesn't negate the emotional pain and trauma that many have experienced. He emphasizes that the emotional pain is on the surface and needs to be addressed, rather than avoided.

In the workplace and workforce, the pandemic has caused significant changes. Remote work, job losses, economic instability, and uncertainty about the future have all contributed to increased stress, anxiety, and mental health challenges for many employees. Employers have had to adapt–and continue adapting–to new ways of managing and supporting their workforce.

The role of HR to improve employee experience

In the last decade, businesses have recognized the importance of digital transformation in improving customer experience, and now it's time to focus on employee experience. With trends such as unemployment, big changes, and resignations impacting the job market, organizations need to take digital transformation seriously.

Denuzzo suggests that organizations should establish three key systems to improve employee experience: systems of record, systems of insights, and systems of engagement.

Systems of record

How much time do we waste searching for the data and information we need to get our work done? Systems of record are designed to ensure accurate and consistent data management. Leverage technology to make sure data is organized in such a way that employees can find what they’re looking for easily and without a fuss.

Platforms like Staffbase and Beekeeper provide a centralized hub where employees can access important information and updates, regardless of their location. With the integration of AI tools like ChatGPT, employees can simply ask for what they need and receive instant access to the information they require. Technology makes it easier to empower employees with easy access to data and information.

Systems of insight

Systems of insights go beyond basic reporting and focus on predictive analytics that can help organizations make informed decisions. Denuzzo emphasizes the importance of data being in the flow of work, allowing for immediate consumption and understanding, and using data to create hypotheses to address talent strategies and high-impact areas.

AI for HR with tools like Erudit processes data to generate actionable insights on workforce sentiment, revealing areas of the employee experience that need improvement. These insights empower leaders to make informed decisions while prioritizing the well-being of their people.

Systems of engagement

Finally, systems of engagement aim to foster collaboration and communication among employees, managers, and leaders within the organization. This interconnected platform should enable two-way communication, co-creation, and cross-functional conversations that break down hierarchical barriers.

Communication tools like Slack can serve as a simple yet effective base for engagement initiatives and leadership changes, enabling organizations to foster transparent communication and seamless collaboration.

Denuzzo highlights that the shift to systems to improve employee experience should have happened years ago, but organizations are now recognizing the importance of prioritizing employee experience to attract, retain, and engage talent in today's competitive job market. By implementing robust systems of record, insights, and engagement, organizations can enhance their employee experience and create a digital ecosystem that promotes collaboration, communication, and meaningful work.

“You have three years to convince the people you hired that they belong where you hired them to be.” - Wagner Denuzzo, LCSW

How technology and AI is changing the HR landscape

Companies are leveraging data and automation to empower HR to streamline processes, improve decision-making, and enhance the employee experience. Denuzzo highlights some key insights on how technology and AI are transforming the HR landscape.

Data-driven decision-making

HR teams now have access to vast amounts of data, ranging from employee performance metrics to market trends. This data can be used to make informed decisions about talent acquisition, employee development, and workforce planning. AI-powered tools can analyze large data sets and provide insights to HR professionals, helping them make data-driven decisions that are aligned with the organization's goals and objectives.

Talent marketplaces

Talent marketplaces are emerging as a powerful tool for companies to manage their talent pool and facilitate internal mobility. These marketplaces like Gloat and Fuel50 enable employees to showcase their skills and interests, and managers can identify talent within the organization for new opportunities. Talent marketplaces also promote a skills-based approach to talent management, encouraging employees to develop new skills and align their career aspirations with the organization's needs.

Employee empowerment

Technology and AI are empowering employees to take ownership of their careers and development. HR teams are leveraging digital tools to provide employees with access to learning resources, career development opportunities, and self-assessment tools. This empowers employees to take control of their career paths, acquire new skills, and contribute to their personal and professional growth.

Manager capability

The role of managers in the HR landscape is evolving from performance management to coaching and sensing. Managers are expected to coach employees for success, provide feedback and guidance, and help them align their goals with the organization's strategy. AI-powered tools can assist managers in analyzing employee data, identifying skill gaps, and providing personalized coaching, enabling them to better understand the needs and aspirations of their teams.

Enhanced employee experience

Technology and AI are being used to create a seamless and personalized employee experience. From onboarding to performance management to learning and development, employees are expecting a consumer-grade experience in their interactions with HR processes and tools. HR teams are leveraging AI-powered chatbots, self-service portals, and mobile apps to provide employees with a seamless and convenient experience, improving employee satisfaction and engagement.

Agile and dynamic talent strategies

Traditional talent management models are giving way to more agile and dynamic talent strategies. HR teams are leveraging digital architectures and operating systems to enable a more flexible and adaptable approach to talent management. This includes focusing on skills-based approaches, continuous learning and development, and creating an inclusive and diverse workforce.

HR teams that leverage technology and AI effectively can improve decision-making, enhance the employee experience, and create a more inclusive and diverse workforce. According to Denuzzo, those that do not embrace technology will be left behind.

“Connecting the dots in an organization–connecting strategy, the needs of leaders, the needs of employees, the talent marketplace, skills in careers–is the new role of HR.” - Wagner Denuzzo, LCSW

Considering potential pitfalls of employee surveys

While technology has greatly advanced the field of survey research, it is not without its limitations. Denuzzo reminds us to be mindful of the potential pitfalls of relying solely on surveys to understand employees.

“I'm a little skeptical of surveys.” - Wagner Denuzzo, LCSW

One key limitation mentioned is the potential for selection bias. Denuzzo notes that surveys conducted solely online or through other technological means may not capture a representative sample of the target population. For example, individuals who are less technologically savvy or do not have internet access may be systematically excluded from the survey, leading to a biased sample that does not accurately reflect the population of interest. 

Survey fatigue

Respondents may also experience survey fatigue or may not be as motivated to complete the survey due to the impersonal nature of the data collection process. This can result in low response rates or incomplete responses, which can compromise the quality of the survey results.

Fleeting sentiment needs timely analytics.

Another limitation of surveys, as pointed out by Denuzzo, is that they are often based on sentiments captured at a particular moment in time and a specific situation. This can potentially result in an incomplete or skewed picture of employee sentiment, particularly in large organizations with a large workforce, where the dynamics and sentiments of employees can vary greatly across different teams, departments, and locations.

On employee engagement surveys in particular, Denuzzo argues that they are becoming a fallacy in the context of continuous listening, learning, and understanding of employees. While the idea of measuring and improving employee engagement is commendable, Denuzzo believes that a more natural approach is needed, one that involves creating psychological safety and building trust among employees to understand their true sentiments and encourage them to give their genuine feedback. He suggests that organizations need to go beyond traditional engagement surveys and focus on creating a culture of trust with continuous listening, learning, and understanding to truly engage and motivate employees.

Wagner Denuzzo's perspective on the future of HR

The future of HR requires organizations to adapt to changing environments and embrace ambiguity. HR should shift its focus to bridging the gap between people and organizations.

Denuzzo emphasizes the importance of leadership in this changing environment, and believes that everyone in an organization should cultivate leadership skills from the beginning of their career. He sees leadership as everyone's business, and believes that cognitive mastery, emotional intelligence, and curiosity about others are crucial skills for leaders in the future workforce. He also highlights the importance of introspective conversations and real conversations in organizations, as these can help individuals understand themselves better, uncover biases, and move forward.

When asked about the readiness of managers for the future workforce, Denuzzo shares that in his experience, not all managers are ready.

“I do believe we have 5 to 10% of managers who are ready because they've been through the journey. Then 20 to 25% who really want to do a good job, they just don't know where to start. Then you have 50% of managers who never wanted to be managers. They are managers because of status or compensation. But I think what's emerging is the managers who want to do a good job.” - Wagner Denuzzo, LCSW

With this willingness and desire, Denuzzo encourages organizations to empower managers and leaders within the organization to develop leadership and empathy skills, which will feed into a positive and people-first culture.

Key skills for future-ready leaders

Successful leaders of the future need to be adaptive, cultivate leadership skills, be self-aware and introspective, foster real conversations and communication, have a clear vision and strategic thinking, prioritize wellness and well-being, and embrace inclusivity and diversity. Denuzzo shares some tips to help people-first leaders step up to the plate.

Adaptive leadership

He emphasizes that in a changing and ambiguous environment, everyone needs to be a leader. Future leaders adapt to the rapidly evolving business landscape and navigate through uncertainty with resilience and agility.

Starting early

Denuzzo believes that leadership skills should be cultivated from the beginning of one's career. This includes cognitive mastery, emotional intelligence, and curiosity about others. 

Self-awareness and introspection

Leaders need to be self-aware and have the ability to reflect on their own behaviors, beliefs, and biases in order to make informed decisions and create inclusive environments.

Real conversations and communication

The best leaders allow space and time for real conversations. They are skilled communicators who can foster open and honest dialogues, build trust, and create a culture of transparency and inclusivity.

Vision and strategic thinking

Future-ready leaders slow down, clarify what they want to accomplish, and think strategically. Set goals, make informed decisions, and lead their teams toward achieving organizational objectives.

Wellness and well-being

Prioritize the well-being of employees. Recognize that their physical, mental, and emotional health directly impacts performance and productivity. Leaders who prioritize employee well-being are more likely to create a positive and engaged workforce.

Inclusivity and diversity

Denuzzo highlights the importance of being curious about others and understanding different perspectives to foster inclusivity. Successful leaders embrace diversity and inclusivity as essential components of innovative, creative, and collaborative teams.

“Everyone is a leader. Transformational leadership is everyone's business.” - Wagner Denuzzo, LCSW

Challenges facing HR in the future

HR professionals need to adapt to the changing landscape of work and prioritize human-centered approaches to effectively address these challenges and create thriving and inclusive organizations. The main challenges that HR should start tackling today can be summarized in three points.

Shifting focus from transactions to interactions

HR traditionally focused on transactional activities such as payroll, benefits, and compliance. HR professionals now need to prioritize employee experience, well-being, and engagement, and foster real conversations and authentic communication to build a culture of trust and inclusivity.

Navigating ambiguity and complexity

The increasing ambiguity and complexity of the business landscape call for HR to be agile and adaptive. This includes being able to anticipate and address the evolving needs of the workforce, such as remote work, gig economy, and diverse work arrangements while ensuring compliance with changing regulations and policies.

Developing inclusive leadership

HR plays a critical role in developing inclusive leadership. Drive initiatives that promote diversity, equity, and inclusion, and ensure that leadership at all levels is equipped with the skills and mindset to create inclusive environments. This includes addressing biases, promoting unconscious bias training, and fostering a culture of inclusivity where all employees feel valued, respected, and included.

Strategies for preparing HR for the future

To get started on making HR future-ready, here are three essential strategies that emerged from the discussion. 

Embrace technology and data-driven decision making.

Technology is rapidly transforming the workplace, and HR needs to leverage it to enhance its effectiveness. HR professionals should adopt digital tools and technologies to streamline HR processes, automate routine tasks, and enable data-driven decision-making. This includes leveraging analytics and data to inform HR strategies, workforce planning, and talent management. HR professionals need to continuously upskill themselves in technology and data literacy to effectively utilize technology for HR functions and stay ahead in the rapidly evolving HR landscape.

Build strategic partnerships.

Denuzzo emphasizes the importance of HR professionals becoming strategic partners to the business. HR needs to proactively collaborate with business leaders, align HR strategies with overall business objectives, and demonstrate the value of HR in driving organizational success. HR professionals need to understand the business context, anticipate future workforce needs, and provide strategic insights and recommendations to inform decision-making at the leadership level. This requires building strong relationships, communicating effectively, and gaining credibility as trusted advisors to the business.

Foster a culture of continuous learning and development.

In the dynamic and ever-changing world of work, HR professionals need to prioritize their own learning and development. This includes staying updated with the latest HR trends, regulations, and best practices, and continuously upskilling themselves in areas such as leadership, analytics, technology, and change management. HR professionals should also foster a culture of continuous learning and development within their organizations, by providing opportunities for employees to enhance their skills and knowledge and promoting a growth mindset where learning is encouraged at all levels.

But to conclude, Denuzzo went personal, reminding us all to be grateful for the opportunity to reflect on the future of HR and help create healthier, happier, thriving work environments for generations to come. In the midst of uncertainties, such as layoffs, it's important to be kind to ourselves, appreciate the moment, and embrace our uniqueness as we navigate the future of HR with resilience and compassion.

“Be kind to yourselves and be grateful for the opportunity to have this conversation.” - Wagner Denuzzo, LCSW

Updated content: