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The First Word: Four HR trends coming up on the horizon

We all know there’s no such thing as business as usual. The dynamics of commerce mean the only constant is change. And even after the seismic shifts we all felt during the pandemic, the post-Covid working environment looks set to continue to evolve at pace.

For business leaders wanting to move toward growth with clarity and confidence — particularly those in the all-important HR and payroll functions — staying one step ahead of the key trends impacting the workplace is vital.

In this article we’ll explore four of those key trends. Here you’ll discover ideas and insights that better prepare you for the challenges that lie ahead in 2024. These key trends range from the role generative artificial intelligence (Generative AI or Gen AI) is having in HR and the growing importance of diversity, equity and inclusion (DEI) in the workplace, to mastering compliance for remote workers.

The use of Generative AI in HR is increasing

Generative AI is certainly the hot topic of the moment. Which can make it difficult to cut through the hype and fiction to the sharp-end realities of its impacts on HR.

But with the US-based Government Accountability Office (GAO) reporting that as of June 2023 generative AI had reached over 100 million users, including many in the HR industry, it’s clear this topic should be high on every leader’s agenda.1

Our use of payroll and HR data to extract insights to improve our decision-making is, of course, nothing new. However, the advent of Gen AI does turbo-charge our ability to do so. It can help you access, analyse and action data faster, more easily and more cost effectively than ever before.

Here at ADP, we like to think of this as technology with the human touch; in that AI doesn’t lead to ‘human replacement’ but to ‘human enhancement’.

And enhancing our capability to better understand the most important asset of any business – its people — can only deliver better strategic decisions, performance, productivity and profitability.

Three factors are becoming increasingly important to the success of your enterprise in this new AI- enabled arena:

  • The business benefits of AI delivering accurate people analytics and insights rely on you having clean, trustworthy data in the first place
  • As the use of Gen AI becomes more prevalent in your organisation, it’s vital you put in place strategies for the ethical and compliant use of data, in line with the relevant laws and
  • Never forget that the quality of Gen AI output quickly deteriorates without human intervention. We need to train it and to keep doing so when conditions change (i.e., new product deployed or changes in legislation)

Businesses are prioritising the ‘I’ in DEI

The vital role of Diversity, Equity and Inclusion (DEI) policies and practices in the workplace have grown in importance. Such that many businesses are expanding the scope of their strategies to drive an inclusion-first mindset and encompass a more comprehensive group of individuals.

What’s more, organisations are moving from DEI strategies that used to be all about compliance to becoming increasingly proactive in their policies. These have been expanded to include a better understanding of how disparate factors such as identity, disability, neurodiversity and intersectionality can impact and improve employee engagement. Which is why it’s vital to ensure products should also be designed with inclusion in mind so they’re easy-to-use and accessible.

The research suggests that these enlightened policies are working. Over half of employees (53%) say their company is better at DEI than compared to three years ago.2 But note that diversity, equity and inclusion are seen as particularly important to the younger, Gen Z generation, many of whom claim they would seek employment elsewhere if they discovered issues with their company’s DEI policy.

For example, “Nearly two-thirds of employees (65%) would consider looking for another job if they found out that there was no diversity and inclusion policy in their company. That figure rises to almost three-quarters (73%) for those aged 18-25 years old”.3

It’s also important to bear in mind that in an age of global skills shortages, where successful recruitment and retention are critical, employees’ expectations around DEI are fundamental to the employee experience. It’s clear this issue can make all the difference between staff deciding whether to leave or stay in a job.

In addition, it’s also widely understood that incorporating diverse voices and experiences into your

decision-making processes can create innovative, unique and more all-inclusive business outcomes. But to measure, assess and improve your DEI impacts, you need the right data.

Tracking your data on workforce composition, pay equity, inclusivity benchmarks — and measuring the reasons for recruitment, promotion and termination — can be key to successful DEI programmes. Which is why a robust, unified and global payroll system can help.

Compliance and security have become hot topics for remote workers

A quiet revolution took place during the Covid pandemic. Working from home evolved into working from anywhere you could get an Internet connection. In fact, recent research showed that almost half of workers (48%) say they’ve already relocated or are considering doing so.4 That relocation could be just across town, the state or even across the world.

Trouble is, as your workforce becomes more geographically diverse, your list of obligations in terms of compliance and regulation can only grow longer and more complicated — regardless of where your headquarters are based.

It’s not just about collecting taxes and administering benefits in line with local legislation. The security of personal information and business data are also exacerbated by remote working.

There are two additional complicating factors to consider here, too. Regulations relating to payroll and HR are in constant flux state-to-state and country-to-country. Plus, in the new era of Generative AI, human error amongst your remote workers could put your data at risk.

A partnership with a global HR and payroll provider with international compliance metrics will help you stay ahead of ongoing regulatory change and keep you the right side of any breaches. While collaboration with data security experts and careful use of Gen AI could help you bolster your digital defences.

Note that according to a recent study, standard global compliance metrics are a rarity: just 52% of businesses use some standard metrics and around two in five (41%) have different methods in every country.5

HR technology is helping to generate growth

Companies of all shapes, sizes and sectors are expanding their global footprint to fuel growth and meet their customers’ demands for consistent international service. The vendors of HR technology are doing the same.

Which means your business can address the three trends we’ve highlighted above by harnessing the subject of our fourth trend — using HR technology to overcome challenges, facilitate change and generate growth.

As we’ve mentioned, Gen AI will be a primary facilitator, optimising your HR and payroll tasks, enabling you to prioritise the employee experience and scale operations without adding resources, costs or extended timelines.

But there’s already a variety of useful technologies your organisation can leverage when going for global growth. These range from application programme interfaces (APIs), for better integration across a vast partner ecosystem, to global cross-border payroll solutions that ensure your employees are paid accurately and on time — while keeping your organisation fully compliant when moving money in different countries and different currencies.

The fact is it’s rare for any business going for international expansion to go it alone. They consolidate and simplify their HR and payroll systems and processes via a partnering with a reliable single service provider and system of record (SOR). This approach helps minimise the complexity of managing a worldwide operation while maximising pay and data accuracy, compliance to local regulation and productivity.

That’s why we believe choosing the right global HR and payroll partner is essential to the success of your international expansion plans in 2024 and beyond.


 

About the authorvirginia-magliulo

Virginia Magliulo is the President of Employer Services International. In this role, she leads the company’s international regions, ADP GlobalView, ADP Celergo and ADP Streamline. Under her leadership, she is responsible for driving strategic growth and operational excellence across all ADP offerings outside North America.

Virginia joined ADP in 2015 as a Customer Service Director, since then she has served as President of ADP GlobalView, Corporate Officer on ADP’s Board of Directors in 2019, and General Manager of ADP Italy and Southern Europe General Manager, adding to her responsibilities in ADP’s Spain and Portugal operations. She aimed to act as a catalyst for change, enabling her teams to achieve excellence through collaboration, accountability, and inclusiveness.

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