TOP HR TRENDS FOR 2022: DAVID GREEN'S PREDICTIONS
Well, welcome to your own show, David. It is always fun to make you answer questions rather than ask them. So welcome to the podcast. How are you doing today? I am good, thanks. It is always better asking the questions than answering them, so I look forward to this with some trepidation. Excellent. Well it is always an absolute joy to dig into your predictions. Once again, you have gazed into your crystal ball and come up with some
predictions for the year ahead, which we are going to spend some time exploring today. But for anyone that hasn't already read your article, many have, on LinkedIn, please do go and check out David's predictions for 2022. They are excellent and there is a great lively debate on there. You are free to add comments and add your own predictions as well, which is something we will get into towards the end of this episode, actually. So first question for you, David, given that you do this every year, very bold of you to do so, very brave. How
well did your predictions from last year do? Well, I thought you might ask that, so I did go back a mark last year's exam paper. The first thing to say, and let's get the excuses in now, is trying to predict the future is a mug's game. So that is a quote from Douglas Adams, who is the author of Hitchhiker's Guide To The Galaxy. A fantastic book, it must be said, where I am probably showing my age by mentioning it. But we all like to make the odd prediction and
for me, I find it is a really good way to reflect on the year that's gone, learn, and plan for the year ahead. But to be fair, and in my defence, many of last year's predictions were reasonably accurate. Now, maybe they were a bit safe, that could be something that could be levied at me. But take these three. One, there has definitely been an increased focus on employee wellbeing. Certainly in the majority of firms that we work with at Insight222 and we have seen that consistently from the podcast guests we have had throughout 2021. The one that really sticks out I think, is the podcast episode with Arianna Huffington and Donna Morris, when Donna was talking about the efforts they are making around wellbeing at Walmart.
Second, and I know will cover this a bit later in our discussion. You would expect me to say this, people analytics has grown as a function and the emphasis really does seem to have shifted from a focus on influencing HR activities, to one that is primarily focused on the impact and business outcomes. And I think the third area, I know we are going to dig into this one as well, is the continued shift towards skills as a focal point. The shift towards a skills based organisation
is transforming the role and impact of HR. So definitely seeing that happening even more in 2021 and I think even more in 2022. And if I could pick one of last year's predictions that hasn't really come to pass fully yet. I think I said, I better quote the words,
“HR becomes more digital, more agile and more data literate” It is happening but maybe not quite as quickly as I predicted or as I hoped. For example, in the annual people analytics trends research that we do at Insight222, that is across a hundred global organisations, although the CHRO in 90% of those organisations has pretty much mandated that people analytics is a core component of the HR strategy, those same organisations reports that only 42% currently have a data-driven culture in HR. So plenty of work to do. So in summary Ian, I might give myself a generous B or a B minus for last years prediction. I think you are being very modest. I think,
that is really interesting and we were just talking about it a little bit before starting the recording, which is it is very hard to make these predictions because actually things do change quite slowly and I think we will dig into that in a little bit. As you say, some of these trends are emerging, but a long way to go for some of them still. So let's get into what you were looking at for 2022. The first one that you went for, I do feel
is a fairly safe prediction, a little bit of examining the year as well as looking forward, which is around hybrid working and the impact that the pandemic has had on all of us and our ability to actually go into an office and see others. But as you think about how this evolves, obviously I don't expect you to predict how the pandemic is going to play out because that does seem to be one that we can't all judge particularly well. But if we do get to this point where we have more choice around where we work, whether we go back to the office or not, what are your thoughts on how hybrid working will evolve in 2022 and beyond? You are right it is quite a safe prediction perhaps, but it is also probably one that is the biggest topic whenever we talk to our clients at Insight222. I did say that last year, would be the year that firms fully transition to hybrid ways of working, but that hasn't played out. And as you mentioned, that is largely due to the pandemic, the Delta and Omicron variants have delayed the whole return to office and postponed hybrid working in many cases. What is clear though, and this is where the prediction really comes in, is there is a growing chasm between employers, who yearn for a return to significant in person working, and employees, who don’t, at least according to the many numerous surveys that we see. So when you then factor in
the great resignation, and we can debate how real that is or not. But when you cut through the hype of that, it appears to be primarily about the pandemic causing employees to reflect on what they want from their lives. It becomes a bit more interesting. And maybe that isn't the long commute to work three or four days a week, or the long hours, maybe people don't want that anymore.
So I think we have arrived at a bit of an inflection point about where, when, and how work gets done. And employees arguably have the upper hand in what seems to be quite a buoyant marketplace. So the prediction really is about HR orchestrating that shift to hybrid and brokering that deal between leaders and workers. Hopefully we are seeing them using people data to inform that transition. That comes into something we are going to talk about later, having that effective approach to continuous employee listening, can certainly help shape that path. And it really helps shape the context around
future ways of working, not just for leaders so that their policies can gain support from the workforce. I don't know if you saw but Microsoft talked about that hybrid paradox. People are saying they want the flexibility of working from anywhere, but they also crave more in-person connections. So there is a balance that as the pandemic plays out, you might see move one way or the other, depending on where we are from a health perspective. But, the reason I put it at number one is the prize could be significant for the companies and HR functions that do it well. If you get the approach to hybrid right,
and that is not just the where, which we seem very fixated on at the moment, but the when and the how. Getting that approach right so that it attracts rather than repels top talent, that could turn for individual organisations, despite the threat of the great resignation, and actually attract people into their organisations. We have heard from companies like Salesforce, IBM, Microsoft, and others on the podcast, that are thinking like that and putting employees at the centre of their approach to hybrid working. There are other organisations
that aren’t and it will be interesting to see how that plays out in the next 12 months. And the biggest wish of course, is that the pandemic starts to recede. Yeah, absolutely. And I think what we have also seen anecdotally, I haven't actually seen a lot of data on this yet but I think it would be interesting to see, is just the ability to attract talent now from wherever. Particularly somewhere like the US, where maybe someone needed to move from east coast to west coast, actually to now hire people wherever they are as long as they are within a similar-ish time zone, or maybe in some cases even if they are not. I think that is opening up opportunities for employees, but also for employers, to find different talent to fit those jobs. So, yeah, it will be fascinating to see how that one plays out.
I guess whilst we are thinking about data, one of your favourite topics, again it is not a big surprise to see people analytics as one of your predictions and for that to evolve further. It has definitely been a phenomenal year for the field and we have seen a lot of progression, a lot of different ways that people analytics has really been used more, and we have seen that field evolve. When you look now into 2022, what do you think is next for people analytics? What about themes like trust and ethics, that you mentioned in your predictions, how do you see all of this playing out in the coming year? Well, I will come back to the trust and ethics bit secondly, but remind me if I forget as well. I thought it might be helpful for listeners to actually just start with the first part of the question and maybe highlight some of the findings that we have found in our people analytics trends report. So that was published towards the end of last year in October, and as I mentioned earlier, it was informed by a survey of 114 global companies. As you said, it really highlighted that growth in the field and really builds on what Jonathan and I wrote in Excellence In People Analytics. The growth of people analytics,
the investment in people analytics by leading organisations, and the impact of people analytics, are all rising exponentially. Long may that continue. In just 12 months actually, from doing the survey in 2020, we saw that the ratio of people analytics professionals to overall FTE in the companies we surveyed, had improved to 1 people analytics professional to every 2,900 employees from 1 to 4,000, which is quite a significant increase. And 75% of those companies told me that those functions are going to grow even more in the next 18 months. In fact, only 1 of those 114 companies said that their people analytics would shrink and they were just about to divest a third of their organisation. So people analytics is growing pretty well, certainly in the organisations that we surveyed, which was quite a representative sample. Also we found that CHROs are more or less unanimous now that people analytics is important.
The 90% figure I mentioned earlier, that is saying it is a clear part of HR strategy. And we also found that 89% of people analytics either report directly now to the chief people officer or a member of the HR leadership team, and that was 75%, 12 months previously. So again, everything is tracking upwards in that respect. And we know, because we hear the stories in our privileged position at Insight222 and we certainly saw in a lot of the case studies, that Jonathan and I collected in the book, 30 of them, that when it is impactful, people analytics is contributing millions of dollars of value to the top and bottom lines. If you can create that
data-driven culture in HR, you can really scale and enhance that value even further. So, what does that mean about 2022? If we look at the clues as to what to expect, maybe we should look at some of what the leading companies are doing. This is the question that Jonathan and I were attempting to answer in the book because it is a question that we get asked a lot. It is an area that we really looked at in the research as well.
It is basically but perhaps not surprisingly, the leading companies invest more in people analytics, bigger teams, more in technology, they productise analytics at scale, which I think is key and we are going to be talking about personalised learning and personalised talent mobility. Getting data into the hands of the HR business partners, but also managers in the business, so they can make more informed decisions, we have really seen that in the leading organisations and they have created that data-driven culture for HR as well. I know we are going to talk about that as well. So really lots of activity happening and those leading companies are kind of pointing the way a little bit. We are fortunate that we have had
a number of people from those companies on the podcast, Patrick, from ABN AMRO, Ernest NG from Salesforce, just to mention two we have had recently, Jeremy Shapiro from Merck and Co and Alexis Saussinan from Merck KGAA. One of the areas that we are seeing even more focus on is the ethics question, as you mentioned, so I didn't forget it which is good. Let's be honest with people analytics, employee trust is hard to earn and easy to lose. So it has got to be at the forefront of company's strategies around people analytics. Creating trust is
key to creating that sustainable success. You will remember Ian, because you led this piece of work. But when we created the ethics charter, all the way back in 2018 at Insight222, with some of the clients at the time, that was partly catalysed by the EU introducing the GDPR regulations in 2018. There is a lot more regulation on the horizon. The EU is now looking at regulating the use of AI by companies, not just with customers but within the organisation. The EEOC in the US, is also looking at the context of AI in the workplace, particularly around hiring algorithms. And New York has actually just introduced legislation related to the use of hiring algorithms, so this is an ongoing case of legislating.
Now that is not the only reason why companies should be paying attention to ethics as well, delivering benefits to employees through people analytics, it isn’t just the right thing to do it actually has a positive impact on business performance as well. One of my favourite pieces of research is a study that Accenture did a couple of years ago,I think it might have been in back in 2019, where they were looking at what is the potential value of the workforce data that organisations already had in their system. And they found that where companies took a responsible approach and put trust at the forefront of people data, the trust dividends as they called it, could be worth more than a 6% increase in future revenue growth. Which if you think about the amount of revenue some big organisations are making, it is absolutely huge. And a couple of quick examples. One of the 30 case studies in, Excellence In People Analytics, comes from Lloyd's Banking Group, and outlines how they developed an ethics charter that protects employees and drives value for the company.
And then on the podcast, perhaps one of the best examples that we have had was from Jimmy Zhang, who at the time was leading people analytics at Vertex Pharmaceuticals. He says that it is one of the first priorities of setting up people analytics was to create that ethics charter, with those guiding principles, that they shared with employees, and it helped drive that trust and transparency around people analytics in the company. Thinking about some of the things that Jimmy was telling us that they were doing at Vertex, building their own talent marketplace, using sensing data to help the organisation see around corners in terms of looking at what competitors are hiring, you can see by putting that ethics element right at the core of what they are doing was so important. So yeah, I think we will see more talk about ethics and trust in people analytics, over the next year. And obviously of course, one of the reasons for that is there is more data available for organisations to analyse in people analytics and some of that data is arguably more sensitive than the data that we have got in our HR systems. Yeah, absolutely. And I guess what we are
seeing more and more as well, and we have heard this a lot in the last year on the podcast, is that link to the business becoming stronger and stronger, incorporating more than just HR data into people analytics work as well. So, do you see it that it is the business that is driving that shift and demand for more information? Or, do you see that it is HR, really trying to push that information out? Or, is it a bit of both? I think it is a bit of both. If you look at the challenges that people analytics teams, certainly the more developed people analytics teams are studying, like hybrid work, like collaboration, like burnout, like wellbeing, like inclusion, and you need decent data for that, and you need data that is not just typical HR data, to look at that. Particularly, I know we are going to talk about it a little bit later when we talk about listening, but some of that collaboration data like calendar, email, meta data, maybe data coming from Slack and Teams and Zoom, and all the other technologies that we are using to collaborate with each other virtually, everything is trackable now.
When you think about it, if we are all working from home, pretty much the way we communicate with each other now, you can track that and you can get some great insight from it as well. You can get insight that will really help employees. You can identify burnout risk. You can identify manager behaviours and the importance of managers checking in and doing one-to-ones with people. Microsoft
found this is even more important in hybrid work. On-boarding new people. We have on-boarded new people at Insight222, we have had to do that fully remotely which is very different from how we would have done it in the past. So, yeah, I think it is being driven by the business, but also I think that as people analytics teams become more sophisticated, as HR does become more digital and data driven, I think HR professionals themselves are seeing the possibilities of some of these technologies and then they want to use that to help the business and to help the workforce. Yeah, absolutely. I guess one of the areas that we
have really seen grow in that respect as well, particularly due to the pandemic, is the rise of the talent marketplace technology. We have seen learning experience platforms, LXP’s really growing in the last few years as well. That was kind of sped up quite a lot by the pandemic, for some companies. And all of this starts to allow us to focus a bit more on skills, which is again,
a topic that has been talked about for a few years now, but has been quite hard to get a grip on. And so, as we move beyond the legacy of competency frameworks and move more to understanding skills of the workforce, how do you see that playing out in 2022? And, can you give any examples of companies that you think are really doing this well and are at the forefront? I am preaching to the converted a little bit here, talking to you Ian, because I know you actually started doing this at Cisco years ago, back in what, 2015, 2016 you were looking at this? But the increasing shift of focus on skills is arguably leading to a pretty radical transformation of HR. Arguably we are only at the early stages of this transformation. I know from the research that you did for the workforce planning playbook, which I will probably ask you about in a minute, to turn it back to you. 90% of companies told us they want to build skills based workforce planning, but only a quarter were currently doing so. So that shows that there is a lot of room to grow there. One organisation that is obviously doing this well, we had Anshul Sheopuri of IBM, on the podcast recently and he talks about skills acting as a silver thread that connects all aspects of the employee journey. We have talked before Ian, and I think we talked on this episode last year, about how this focus on skills is breaking down some of those traditional silos in HR. Basically
what IBM have done, is through natural language processing and machine learning they have been able to infer the skills of all employees within the organisation, which is over 300,000 people. So much better than asking people for their skills and actually apparently, from what Anshul was telling us and what Diane Gherson told us last year, it is actually more accurate as well. Then IBM has developed technology that provides these employees with recommendations on learning, or career paths, mobility, mentors, and it has linked all that together, which makes sense, doesn't it? Anshul, told us it has even enabled them to shift from pay for performance, to pay for skills, that kind of gives you an indication of where this could go. So that is an example of a company that has built technology focused on skills and I know Salesforce and Vertex have done something similar in that respect. I understand Spotify
have just announced that they have built their own talent marketplace as well. Others have chosen to partner with companies like Gloat, Degreed, Eightfold, Fuel50, there are others as well who collectively are behind what arguably, is one of the hottest technology innovations in recent years, the talent marketplace. We have had HR leaders from Schneider Electric, IQVIA, Standard Chartered, who have all implemented talent marketplaces, but I think certainly in terms of what they actually publish publicly, I think it is probably Unilever that has the best example here. I remember the podcast discussion we had
with Jeroen Wels, back in March 2021, where he explained that they had used talent marketplace, and had been for three years I think, to create that culture of internal mobility at the company. One powerful example that Jeroen, gave was how their talent marketplace had enabled Unilever to redeploy over 3000 people from parts of the business with low demand to areas experiencing really high demand, due to the pandemic. And I know for Jeroen, one of his proudest moments was that it had such an impact that Unilever CEO Alan Jobe, mentioned it in one of their quarterly earnings calls. I would love to turn it back to you for comment, because I know that this is an area that I do bow to your extra expertise than mine on this. How do you see the focus on skills playing out in 2022? And are there any other examples that you can think of, that you would like to add to the mix? So, I am not going to let you off the hook too much, I am going to answer this one quickly and then get back to grilling you. But, as you mentioned, we did do a big piece of research around workforce planning and what one of the biggest central themes really, was this shift to a skill based workforce planning model.
I think exactly as you said, and as we talked about last time, and we have heard others talking about, I think what is really fascinating about the skills conversation, is that it is breaking down silos, and that it is touching many different parts of HR, or indeed bringing together many different parts of HR. And really, if you start to think about it through the eyes of the employee, which obviously more and more companies are doing with a more human centred design approach, you realise that employees don't want to think about learning over here and recruitment over there. Diane talks about that as well. It really is about understanding your job, your career, where you are going to go next, what you can learn. Performance management can even creep in there as well. There are so many different factors and so I like what Anshul said, around skills really being the thread. Something that we saw in the research was that people will come at it from many different angles and so very few people are actually saying, oh, I am going to tackle workforce planning and make it skill-based. Actually the entry point in is, oh, we have got to introduce this learning system that allows us to start to build that skill taxonomy. Or, we are going to go with talent marketplace
because we are keen on assignments, or internal mobility, or some other focus. And it could be recruitment for example, but that allows them to then start to build this muscle of skills. It is a really big topic, it is a really big nut to crack and I think what has happened over the last few years, which I think is really helping the rise, is that technology has got a lot better.
And so to think of that IBM example where they are inferring skills, rather than asking people to fill out forms, then actually as we see machine learning becoming more capable, we see this technology advancing, it becomes something that you can start to understand more about what people are doing, the work they are doing, the skills they have, without having to ask them. And I think for me, that is the bit that is going to be really interesting because really all we are trying to do with all of this, is get a better understanding of work, what is what we need from people, whether it is a job, a task, whatever it might be. How do we understand that in its various parts? How do we define that? It is not just actually about skills, it is about knowledge, it is about experience, it is about all of these things and we are just scratching the surface of being able to really understand them. That is why competencies and
competency frameworks have been so popular because they try to be more than skills, but by doing that, they almost become intangible. And so as we start to double down on skills, how will we start to understand all these other aspects as well. I think ultimately, get a better understanding of the work that we need people to do and then understand what people can do and what they are doing. And that at its very simplest form is what we are trying to do and it is great to see that starting to play a role in workforce planning.
The last thing I will say is that with all of that, what we are also seeing in the workforce planning space, is a shift to be more continuous. This is less about an annual plan that ends up in a drawer, three to five year timeframes. We of course need to be looking further out, but the reality is that people are really focusing on the next 6,12,18 months a lot at the time and they really want to be able to plan for that organisation. And so being able to do this on a more continuous basis, ultimately it needs data and that is where all of this starts to pull together. So yeah, I am really excited to see how this plays
out and I think it is technology and analytics that is ultimately going to pave the way here. Yep. You are doing this episode next year Ian, and I am going to ask the questions. No chance, no chance. So let’s shift gears and allow you to keep talking. I wanted to talk a little bit about employee listening and employee voice. Again, it is a topic we have spoken to a lot of leaders about, heard a lot of people on the podcast talking about it.
This last year in particular, you mentioned at the beginning, the shift to focus more on employee wellbeing. Obviously the pandemic has just brought that front and centre. How do you think this is going to play out if the pandemic starts to wain and we start to get back to a more normal life, then do you see that companies are going to keep going with this? Have we really made a change that is going to be here for the future? And, what else do you think people might start doing in this area? I think if there is a positive consequence of the pandemic in the workplace, it is that leaders seem to be even more genuinely interested in seeking feedback from their employees and pay more attention to wellbeing. So that is good. Do I think it will stay? Yes, because I think once the genie is out of the bottle, it is going to be very hard to put it back in. And actually there is business benefits of doing so and there has been plenty of research. Ethan Burris, from McCombs School of Business, at The University of Texas at Austin, he did some research which showed that when companies keep that forum for employees to be able to speak up, the company benefits. It is pretty obvious, I suppose, in some respects, isn't it. If you have got employees on the frontline, working with customers and you are
making it easy for them to give feedback and make suggestions, then why wouldn't that be helpful? So you could also make a strong case that we are in the midst of the pandemic, and I think we will be for the foreseeable future, and all that focus on the great resignation so companies will step up their employee listening programs even further next year. As you said, there has been some powerful stories throughout the last two years. The examples that really resonate with me and perhaps this gives a clue as to where employee listening and continuous listening may go, are those that are combining survey data from either, doing far more regular surveys, pulse surveys, even to the extent that some companies, like Microsoft, are doing it daily. But combining that with some of the collaboration data that we talked about earlier, to gain insights around topics like wellbeing, collaboration, innovation, burnout risk. There is a great example at Uber, where
the analysis of survey responses and data from some of the collaboration tools that they use, highlighted the pressure on focus time due to remote working. And that basically was having an impact on employees self-reported saying they didn't feel as productive, longer working hours, burnout risk. They then actually tried to address that, partly through education, by actually helping employees understand the importance of focus time. But then enablement, actually creating a tool that re-arranged people's calendars for them. And that helped the employees cope with some of the collaborative overload that they were dealing with. You will remember that we had Microsoft,
Chief People Officer, Kathleen Hogan, as a guest on last summer. She explained how that daily pulse, that I just mentioned, of two and a half thousand employees, coupled with the analysis of that collaboration data, has really helped shape Microsoft's approach to hybrid work. Certainly we have seen lots of stuff from Microsoft CEO, Satya Nadella, talking about the future of work and that we won't be going back to what it was, prior to the pandemic. Which is different from other CEO's that I could mention. And then just before Christmas, Microsoft’s people analytics leader, Dawn Klinghoffer, she had a really fascinating article in Harvard Business Review, which I really recommend anyone listening to check out. During 2020 Microsoft saw a 13% fall in employee satisfaction with work life balance. So the people analytics team really dug into some of the collaboration data and the survey data.
Over several months, they identified that there were three triggers of that. Over collaboration, so similar to Uber. Lack of focus time, similar to Uber. And not taking vacation. So they rolled out three strategies, but I think what is really good about these three stressors is they didn't just communicate this to employees, they actually made managers accountable for it, to make sure that the change that they were trying to affect was systemic. So, that was around managers helping their teams prioritise their work and accepting that, if we are going to do this, what do you want me to drop? Because we can't do everything.
Which is quite a grown up conversation to have in an organisation. Re-evaluating meetings. Protecting focus time. And encouraging vacation. I think we can all probably think about how beneficial vacation has been, even if you are not leaving the house in the last two years, it is just getting the break from the screen and the grind of email and everything else. I think that, that example does provided clues on where employee listening could go in 2022 and beyond. That passive data increasingly being incorporated into continuous listening and if it is focused on benefiting employees, as it has in the examples that I have mentioned, it is going to be much easier to gain support from privacy, info security, works councils and employees. And I think that is the challenge for people analytics teams to make sure the work is directed around there. The potential is enormous, not only can it help
companies maybe turn the supposed great resignation, the other way round, but it can help them with things like inclusion, wellbeing, and collaboration too. And frankly, as I said at the outset, business outcomes, better customer outcomes, product development, all these sorts of things. So I do think that employee listening is going to be a huge focus going forward and there is no coincidence that the co-creation we are doing this year with clients of the people analytics program, is employee listening because we are getting so many questions about it and so much interest. So again, I don't know what your thoughts are around employee listening? Because I know it is a topic we are all passionate about at Insight222. I think the fact that things are changing so much at the moment on such a constant basis and the need to therefore listen more to employees, although I think you could argue the need has always been there, but I think companies have recognised that need and have moved accordingly. You mentioned inclusion but we have obviously seen
a massive focus from organisations around diversity, equity, inclusion, belonging, all of these topics, really surfacing in the last year as well. How do you think that is evolving? And, what do you think companies will be doing differently to keep tackling that? I think it is almost like companies are moving now beyond rhetoric to action. I think people analytics is playing a huge role in enabling that shift, which is about time, frankly. Again, let me refer back to our people.
analytics trend research. Perhaps the finding that bought the warmest glow to several of us, was that when we asked those companies the top three areas where people analytics is adding value, it was diversity, equity and inclusion that emerged as the top area. With 54% of companies placing it in the top three. I think it was 22% last year, if I remember my numbers. That is a massive increase and I think, the evidence of the business value of diversity and inclusion continues to mount up.
You factor in employee expectations, the catalyst provided by the social injustice movement in 2020, and the capability that people analytics provides, from the help companies go from just counting numbers to understanding inclusion, doing lots of work around pay equity and belonging. And maybe it is not a surprise that there is more focus and success in this area and it maybe brings you know back, to what potentially could be the broader societal benefit that people analytics and HR can bring. There is diversity, equity, and inclusion. You could add hybrid work and mental health to that.
Complex topics are increasingly important to CEOs and chief people officers, and they require a deep understanding of the workforce and evidence. Which is why people analytics is so critical and perhaps one of the reasons why people analytics is growing so much. So, yeah, I would expect that to continue again in 2022.
Yeah, absolutely. And I think one thing that we have also really seen evolve this year, is just the ability for people to have a voice on those issues, more on those companies to be listening. I think what we are seeing as part of that, is a change again, in the way that people are thinking about their employees and what employees want from work and from the experience of work. And if we think about that and how HR technology is playing into that, we have already talked to a little bit about this, but we have seen the HR technology market really increase in terms of value and adoption, in the last few years. Now, seeing quite a few unicorns, actually starting to see, not surprisingly, quite a few mergers and acquisitions happening this year as well.
What is your prediction for how we will see the HR technology market continue to grow and is it around this theme of employee experience that we will see driving that, or do you think there are other things that that will impact that? One thing I should have said around diversity and inclusion actually related to technology and analytics is, you are looking at some of the collaborations data, you can start to understand inclusion in teams. You can start to understand inclusion of new hires and stuff like that. And I think that is one of the drivers that is certainly growing HR technology. But yeah, 2021, wow. What a phenomenal year. According to one report I saw, I think it was from Jason Corsello at Arcadian, VC investment is set to top 15 billion in 2021, which is 300% increase apparently on the year before. So, I think it is pretty safe to say there will be more investment next year.
We saw some consolidation in 2021. Peakon was acquired by Workday. Emsi and Burning Glass, two companies I know that you know well, merged. So I think we will see more consolidation in 2022. It seems like there is a lot of very successful, small to medium
technology companies now, they are getting a lot of traction, they got quite a lot of investment in 2021 so the big boys and big girls will be around looking to snap them up. And I think the areas to watch. Anything skills related, so that external labour market data, the talent marketplace, technologies that actually help skills inference and maybe help companies then use that data and recoup some of the investment they made in some of the other technologies, that they bought over previous years. I think employee listening. We saw a lot last year, I mentioned Peakon SAP, Qualtrics. We have seen other movements in that area too, obviously we saw LinkedIn buy Glint, a few years ago. These companies are being very successful. Culture Amp got more investment,
Perceptyx got more investment. Medallia has emerged as a technology in that space. So I think we will see them increasingly incorporating passive data into the offering, whether that is through acquisition or whether that is through products, I guess we will wait and see. Again, that organisational network analysis space has threatened to take off for years, so maybe 2022 will be the year that finally happens. But Ian, I am going to turn this back to you because again, you have studied the HR tech market for a long time. Initially as a buyer and then you actually
analysed the market for a while and obviously part of what you are doing at Insight222, one of the many things you are doing at Insight222, is making sure you understand that market well, so I would love to hear what you think? Yeah. I obviously agree with everything you have said. I think the only thing I would add really is, I think what we have seen from the increase in different types of HR technology, particularly some of the newer point solutions that people are plugging in, is we now have even more data than we have ever had before. You could argue
the problem a few years back, particularly when I was spending more time on this, was that we just didn't have a lot of data on people. We were really just relying on those core HR systems and they didn't really have much of any interest, to do a lot with. Now, it is completely different. There is an abundance of data that we are generating all the time, all of these new tools and technologies are enabling companies to build those datasets. I
would say, what is next is, how do we use that data, understand that data, but ultimately use that data to make people's lives better. It is the “what's in it for me” side of things. And what I am not talking about is, what can the people analytics team do with the data, which I know they are starting to spend more time on, but it is really, how do these tools start to build actual usability and functionality into their platforms that mean you are not looking at reports about how many meetings you are in, but actually there is something happening as a result, more on the recommendation side. We hear people all the time say, it should be more like Netflix. It should be more like Spotify. And I think it has become a bit of a trite statement, I guess. But the reality is when you think about a lot of the technologies you do use the, the amount of data that they are looking at and then using that behind the scenes to then do something, and we could argue sometimes they even get it wrong, but it is quite phenomenal and I just don't think we are at that stage at work yet. Really it is still very rudimentary, in terms of
the types of analysis and insights that we are getting back as users of these technologies. And so for me, I think that is the area that I am most excited about now and how that is going to play out. Yes, I think you are right and actually how better to benefit the people than actually provide the data for employees and making it usable for them to actually do something with it. And make it better for their experience at work, to find a job, to find training, to manage their careers, and just ultimately have a better experience at work. Okay, so you always give me a bit of a hard time on the podcast, David, about how I am going to cut you off and whether we are keeping the episodes to time or not. So I am going to play that role now, particularly as I am actually
getting to interview you and say that we are nearing the end of time. And so we have just got a couple more questions to get into today. One is really around the need for HR to upskill, be more data-driven, be more digital. Obviously this is something we have talked about a lot and you know that I spend a lot of time working on this for Insight222, but I think we are seeing a shift here. You have cited some of the information from the survey around the appetite now for CHROs,
for HR to change. And we are seeing more of a push coming from a lot of different organisations. What are you seeing from your conversations with HR leaders around this and what is your prediction for how it might evolve? I think for all the reasons that we have talked about, the increase from the C-suite during the pandemic, for people data and insights. More focus on inclusion and wellbeing. Understanding what hybrid work is going to be in each company. The desire for HR to be data-driven now is high and there is that delta between what the CHRO is mandating versus the reality at the moment. And I suppose
that the prediction is we will start to close that gap, hopefully quite significantly in 2022. From the research and conversations we have had with leaders on the podcast, and actually in the research we identified three interlocking elements that all need to be managed together to drive that data driven culture. Number one, you need to invest in your people analytics function. That is people, that is skills, that is technology, but it is also the productisation we talked about earlier, to scale and put stuff in the hands of managers and employees, as you just said. Two, embed data driven decision making across HR and managers. Well, how do you do that? Yes, we can support, we can upskill HR professionals, that is an important part of it, but you can't do that on its own. And yes, that is not training people to be data analysts necessarily, that is helping them be more data literate and improve their consulting, influencing, and storytelling skills. Also, by democratising data across the company, investing
in technologies that are accessible, easy to use, user-friendly as we have talked about. It is a change, so we have got to invest in supporting that change management process in HR, clear communications from the CHRO, it is celebrating success. Again, referring because maybe it was one of the more recent episodes, Anshul Sheopuri at IBM, was saying to celebrate HR professionals that embody a data-driven culture, at meetings that the CHRO is hosting or at all hands. Show the way that it is incentivising that career journey for HR professionals, that this is something that is going to help, not just in their careers, but in their day-to-day work as well. So I think that is really important. And then if we can start to be better at demonstrating the business value. So that was the third thing we found. Calculating the ROI from a people analytics perspective,
I guess which means working with finance at the outset of a piece of work and agreeing how are you going to measure value. Really interacting with the stakeholders in the business, not just stakeholders in HR. And doing it together with HR business partners and then communicating the value of data-driven HR across the company. So Microsoft have a hashtag, #data-drivenHR, which they do to communicate any story about people analytics. That is really nice and simple. We have had others on the show, again, I go back to Alexis Saussinan at Merck, talking about how they do that. They set the expectations. They provide the tools. They develop communities of practice and recognise it is a journey, it is not something you can just give someone a training course and a week later they are data-driven HR professional. But it is not just data, that is the thing.
No it is not. And I think that point you just made then around, yes, training is going to play a role here. There is a lot of capability building that needs to happen, new skills. And data is one that is pretty new for HR, not many people got into HR because they liked dealing with data. And so to your point, that it is not going to happen overnight, this is a multi-year journey for HR but I think there is a lot of other areas to throw into that mix. Understanding the impact of digital, really getting into that employee experience piece is
really still so new and taking a more user centric design approach to everything that we do in HR. And then I think it is the communication of all of this back to the business as well. You have talked a little bit about it, but the stakeholder management really understanding the business and really being able to tell a story about what is going on and make sure that that drives action that ultimately adds value to the business. So I think those are some of the areas that we are seeing all come together. I am sure more
are going to get added over time, of course. The fact that HR is now focusing a bit more on itself, I think is great as well, and not just focusing on the skills of the organisation. But I do think it's a multi-year journey. It is a big shift for the function and we are only just getting started, but it does feel like the appetite is now really bubbling up and people are seeing more of a need for it, which I think is great.
Okay, so last question to bring us home on this. When you posted your predictions out on LinkedIn, we have seen as I said, a massive number of comments and discussion going on, which is always great to see. But you actually invited others to add their own predictions, of which we have seen many too. When you looked through all of that and with everything else that we have been discussing today, is there anything else you would like to add around what you are going to see evolve for the role of HR and organisations in the future? And particularly highlight any of the things that the community have added as well. Yes. The first thing to say is a huge thank you to everyone that has taken the time to contribute a suggestion. There are numerous on there. I never would have thought there would be as
many as they are and most of the ideas are actually really good as well and actually frankly, much better than my predictions, so it is going to be quite hard to choose the two that I add to the list. Which makes me think maybe I should crowdsource everything next year. I think what they do and I think what we have talked about as well, is that HR has been on a long journey from a function that was focused on compliance, process, standardisation, and intuition, to one that is going to be, and already is in some cases, focused instead on skills, products, personalisation, and data. As you said, that is not a, this week we are a compliance based function but next week we are a product based function, so that is a long journey. I think that has accelerated since the start of the pandemic. The pandemic has elevated he role of the HR function and we can see that from all the work that we do, we can see that from a lot of suggestions and comments on the article. Particularly where those functions are well led,
they are already data-driven, have good people analytics teams, invest in those people analytics teams, they are focused on creating personalised experience, and they are focused as well, actually on having an impact on business outcomes which I think is the big leap that HR generally, still has to make. That actually extends probably to the broader societal areas that we talked about, like inclusion, but also climate and sustainability. That was certainly a suggestion a few had made. HR has got a real big role to play here, not just to help the organisation achieve its goals, but actually to make sure the organisation is listening to employees who are increasingly quite active about this and they want to work for companies that are actually good for the climate and actually care about it. And actually that kind of leads to a couple of
suggestions I have pulled out and these are the ones that I can remember, off the top of my head. So again, Diane Gherson former IBM chief human resources officer. Her suggestion was related to that. How will HR cope with these increased employee activism? Particularly in the US where this is happening, where maybe they don't have those works councils and the employee representative groups in place. She highlights this as a challenge for HR and I think it is, but it is one that HR should embrace because it could almost help be the collective voice of the employee, on these topics. And then our friend Dave Ulrich, I have to mention Dave because he has been on the podcast, I think more times than any other guest. He
suggested that, HR needs to shift to an increased focus on outcomes rather than activities. I think a lot of what we have talked about over the last 50 minutes or so, actually plays to that. But I think there is still quite a long way to go. And actually, what is quite interesting. I don't if you look at the Edelman Trust Barometer, which is quite well-respected in business.
Last year for the first time, they claim the employees are now the most important stakeholder to a businesses success, more important than customers, more important than shareholders and I think it is not hard to see that this creates a huge opportunity for HR. Maybe also shows why HR is arguably the most exciting place to work in business. So, I am confident HR can rise to these increased expectations. It will take time and there are some great examples out there and hopefully we highlight some of them on the podcast every week. Yeah, absolutely. Well, what a great place to finish, David. I agree, I think a very exciting future ahead for HR and hopefully we will see a lot of your predictions play out in 2022.
So that just leaves me to say, happy new year. It has been a delight putting you on the spot today and looking forward to the year ahead. And thanks for going easy on me, Ian. And for anyone listening, we will put links to some of the research so if people want to delve into that themselves, they can. Happy new year to all the listeners and happy New year to you as well, Ian.