Like every year, the last quarter should be intended for the planning of HR strategy for the next period. And let´s face it, 2024 won´t be stereotypical at all. Therefore, here are five trends you should prioritize. From those that stabilize the company to those that allow it to grow, and what´s more, they won´t be surprised by the news – such as the next wave of digital transformation in connection with Al- so called ESG duties.
Golden ratio of productivity
Preparations for 2024 will be marked by the pressure on productivity. This is because it isn´t easy to recover it to pre-covid data in the Czech Republic and it isn´t growing towards the EU either. Even within the V4, we are one of the countries that have negative growth in relation to 2019. At the same time, productivity in the EU itself is growing more slowly than for example in the USA, where they report 18% increase compared to Europe.
In global HR, therefore, they are beginning to talk about the productivity paradox – in recent years, a number of transformational steps have been implemented with an impact on employee wellbeing which were supposed to help to restore lost productivity after the last financial crisis. However, the opposite happened, and productivity began to stagnate.
“In the Czech Republic, the ceiling for productivity has long been a good standard of living, a generous state and an overheated labour market. And the threat of stagflace also arises. If labour is expensive and employment is low at the same time, companies have significantly less operational space to increase the performance of their employees. Often, managers can become hostages of their own people,” Milan Rataj remarks.
But the situation is not tolerable anymore, so the companies have to choose- either they will have to step on the gas or they will face stagnation and the loss of competitiveness.
The solution isn´t so complicated. According to Rataj, the path to higher productivity is to work more carefully with the talented people in the company.
“The employee with more open future and the clear line of his development will see his job as more meaningful than one who lives from paycheck to paycheck. Thus, it´s important to work with the talented people and develop their competencies. It´s necessary to enable them to move forward not only financially and with the help of benefits, but above all through their own abilities. And gradually change how people think about working for you. In my opinion, there is no other way as a quick recipe.ˮ
Global companies, however, have already started to look for lost productivity elsewhere. Working from home became ´underdog´ and the pressure to return teams back to the office is growing. It often involves emotions. And this illustrates why remote work, called ´home office´ in the Czech Republic, has reached a dead end. In many companies, it wasn´t approached with the aim of making it the most efficient way of operating which will benefit both employees and companies, but rather than a work benefit that companies have tried to defend, for example with questionable financial savings.
Now the imaginary pendulum is getting closer rather to the other side. The truth is, as it happens, somewhere in the middle: in the ability of using the benefits of remote work flexibly and presence in the office.
“It´s true that the work mode is a kind of litmus paper. If the companies cannot handle the combination of working from home and from the office where appropriate, they probably won´t be able to overcome other challenges either. Declining productivity is not a consequence of out- of- sight work itself. It´s the result of the lack of company culture, internal communication or HR data and also integrational strategies and the lack of mutual trust or respect,ˮ Rataj states.
According to him, there is the only solution: preparation of transition to hybrid mode or its evaluation and use it as the way to find out where the company is losing in its HR strategies. Whoever starts this year, he can work with concrete conclusions next year and benefits from them in the form of a strong competitive advantage. The most talented employees will look for the companies that are stable not only financially but ideologically as well.
According to the German HR Forecast platform, in 2023 only 34% of HR managers relied on data and the metrics based on it, to make decisions. However, low data orientation means not only significantly less ability to react quickly and correctly, but also a number of other negative trends – a decline in the prestige of the HR manager´s role within the entire management, creation of alternative (and often inaccurate or even misleading) data sets that try to fill the missing information by HR (e.g. by financial department, COO or CEO´s) and the overall low rate of digitalization at the level of so called human- tech.
“In summary, this can cause decrease in the competitiveness of the entire company and creation of a demonstrative vicious circle. The company doesn´t have enough high- quality people to implement change and follow the data. So because of not having data, it cannot keep the most qualified people,ˮ Rataj observes.
According to Rataj, it´s getting to change in the Czech Republic, even though the pace of change could be faster. By 2025, there could be about twice as many companies in the Czech Republic that can collect the necessary HR data in real time. In addition, the Czech Republic and Slovakia take advantage of the fact that this is where one of the best rated HRIS applications – Sloneek- is created. Therefore, whoever claims that he doesn´t know how to collect the data, he isn´t looking for the way but for excuses.
Moms on maternity leave, experts of late professional autumn, students or complete greenhorns. Although the given groups of employees could be crucial for many companies next year, there is a lot of talk about them, but only few companies have managed to integrate them into the work process so far. It´s therefore time to explore how to find common ground with them.
First of all, the Czech companies aren´t the only ones dealing with this problem. So called ´hidden workforce´ is the topic of 2024 in all western markets. It´s a logical consequence of low unemployment and the irreversible fact that the population is getting older. If the companies fail to use the skills of the oldest generation, they may lose man- hour that they will lack. Moreover, motivation of the target groups to engage in work grows due to inflation.
So why has this obviously mutually beneficial cooperation not been successful in the long term? Milan Rataj says that it´s the result of already mentioned low data competence of HR professionals. Then they are unable to manage atypical workloads or colleagues because of capacity. This changes when their productivity and motivation are monitored through the HRIS platform.
“Basically, it´s all about understanding that motivation, productivity and professionalism aren´t issues of generation and they don´t always depend on your workload or the place you work from. You just have to be able to measure and manage it. And it won´t work without the data,ˮ Rataj explains.
HR and ESG
Are you ready for the task: “Please, explain what does HR do to meet ESG goals.ˮ? Probably not. However, HR processes and strategies form one of the most key parts of ESG reporting. In addition, in order to pass an audit, you have to document them – with the data and strategy with clear goals. The preparation of the documents for audit doesn´t last few weeks. It usually goes into depth and takes up to half a year. So, it´s high time you start.
“I recommend to think about HR strategy and look at it through the eyes of ESG auditor. If you don´t have HR strategy, then at least you have a good reason to write it down in a comprehensive document. For example, on the basis of instructions introduced by Sloneek,ˮ Milan Rataj states.
The need to prepare ESG audit may come earlier than the company expects- if the company is a subcontractor of a partner who has already applied ESG reporting. According to Rataj, it´s crucial to think about the salary issues that the company is dealing with, the ethical approach to workload, recruitment process, the approach to particular generations, well- being of employees but also prevention and critical steps for negative phenomena. The attitude to inclusion, from gender equality to neurodiversity and social mobility should be considered as well.
Even in this case, the ability to rely on data will be essential for every HR expert- as already mentioned, the audit won´t only operate with formal obligations but it will also focus on how the company is managed to meet the goals.
“I would suggest that all HR experts should see ESG positively. It quite often fulfils its role in exactly it was designed for: it activates the processes in the companies that no one has take care of for a long time and which move the entire company forward,ˮ Rataj concludes.