The Hackett Group’s 2021 HR Key Issues Research Shows HR's Response to the Pandemic

Rhea-AI Summary

The Hackett Group's latest research reveals a significant shift in HR priorities, with becoming a strategic advisor now the top focus, up from ninth place last year. This change is driven by the pandemic and social justice discussions. Key issues highlighted include enhancing business strategy alignment, workforce diversity, and improving analytics capabilities. The survey, involving over 300 executives, indicates 41% expect stabilization in business conditions by Q2 2021, while 36% anticipate longer recovery. The emphasis on digital transformation is also noted, with an expected 20% growth in cloud-based HR tools.

Positive

• Transition of HR role to strategic advisor is now top priority, reflecting current demands and challenges.
• Increased focus on workforce diversity and inclusion has emerged as a critical enterprise priority.
• Projected 18% growth in advanced analytics tool adoption, enhancing strategic decision-making.

Negative

• 41% of respondents foresee gradual business stabilization, indicating ongoing uncertainty.
• Anticipated 1.4% decrease in HR staff despite expected workload increase may strain resources.

Becoming a strategic advisor has become the new top priority for HR, in part due to the demands of the global pandemic and growing conversations on social justice issues, according to new Key Issues Research from The Hackett Group, Inc. (NASDAQ: HCKT).

The full research “2021 CHRO Agenda: 10 Key Issues HR Needs to Act on Now,” is available as a complimentary download at this link: http://go.poweredbyhackett.com/2021hrkeyissuessm.

Key findings from the research include:

• New Top HR Priority – Becoming a strategic advisor has shifted to the top priority for HR, a dramatic change in prioritization. Last year it was ninth among the 10 HR key issues. The pandemic in combination with diversity and inclusion conversations have thrust HR into a prominent role guiding the leadership team through all aspects of the crisis. (Page 2, 4 and 5).

• Increased Emphasis on Enabling Business Strategy and Performance – Key issues 2-5 reflect various elements of this focus. Creating/maintaining a high-performance culture, in the second spot, will be made more challenging by the unprecedented obstacles stemming from the shift to remote working. Aligning workforce and business strategy, in the third spot, is critical as companies continue to adjust market and operating strategies in response to the pandemic. Improving HR agility, in the fourth spot, will require that HR organizations embed agile capabilities into their operating models. Technology will play a key role in this. In 2020 HR organizations demonstrated levels of agility they didn’t know they had, but relied on heroic acts to overcome inadequate systems and other challenges. Enabling business strategy execution, in the fifth spot, is critical, as pandemic-driven disruptions have forced many companies to make strategic pivots and launch new digital initiatives. (Pages 1, 4, 5,7, 8, 9)

• Expectation of Continued Instability – 41% of survey respondents expect business conditions will stabilize by Q2 2021, 36% believe it will take longer. (Page 3). This instability will likely further increase the importance of HR’s role, requiring HR to improve agility, enhance planning capabilities, and be more flexible in how it supports the business.

• Greater Focus on Workforce Diversity – For 2021, harnessing a truly diverse spectrum of people, perspectives and talent has emerged as a top 10 priority for HR. It also ranked second among enterprise priorities. (Pages 4, 9, 15). Today’s organizations require a culture, management philosophy, and supporting practices that welcome and cultivate talent from diverse backgrounds and demographics. This has become a board-level issue, and failure to effectively address it can potentially hurt the employer brand, the ability to attract and retain key talent, and ultimately, the performance of the business.

• Increased Focus on Improving Analytics & Modeling – Among HR’s top 10 key issues in 2021, improving analytical, modeling and reporting capabilities was the one designated as having the lowest ability to address. But implementing advanced analytics and modeling tools, and developing staff skills necessary to use them, is critical to improve strategic decision making, predictive insights and agility. HR leaders are projecting an 18% growth in adoption of advanced analytics tools in 2021, and a 15% growth in use of data visualization tools. (Page 12)

• More Remote Work – Pre-crisis, only 4% of HR and other G&A staff worked from home. Post-crisis, 25% are expected to work from home and another 33% will have a hybrid arrangement. (Page 3). More information on this topic is also available in our recent research piece “New Working Model, Part 1,” available free with registration at this link: http://go.poweredbyhackett.com/hrwc2103sm

• Cost Takeout’s a Priority – Under the prevailing crisis recovery conditions, cost reduction is a greater priority. HR must manage both its own operating cost and support broader enterprise cost management initiatives. HR leaders expect to see a 0.5% uptick in HR operating budgets and a 1.4% decrease in staff in 2021, as total workload is expected to increase by 1.7%. The combination of significant 2020 cost cuts and increased workloads is expected to strain many HR organizations (Pages 3, 6). In addition, HR must support enterprise cost reduction strategies and maintain workforce productivity (Pages 4, 11)

• Dramatic Shift in Enterprise Priorities Towards Digital Transformation – Enterprise digital transformation rose five spots to become the top enterprise initiative for 2021 (Page 15). To facilitate greater agility, HR organizations expect to grow their deployment of cloud-based HR suites and business process management tools by 20% and 17%, respectively. While HR organizations have piloted certain emerging technologies, broad adoption of some, including robotic process automation, virtual assistants/chatbots, and cognitive computing, remains limited (Pages 8, 10). All HR organizations should start with understanding their current digital deployment through the use of a “Heat Map” exercise, including one available free from The Hackett Group at this link.

The Hackett Group’s 2021 Key Issues research is based on results gathered from more than 300 executives in finance, HR, IT, procurement, supply chain, and global business services at a global set of midsized and large enterprises.

About The Hackett Group

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation including implementation of leading enterprise cloud applications, workflow automation and analytics that enable digital world class performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap^®, and our Digital Transformation Platform (DTP), we accelerate best practices implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.

Cautionary Statement Regarding “Forward Looking” Statements

This release contains “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, seeks”, “estimates” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward looking statements. Forward looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward looking statements. Factors that may impact such forward looking statements include without limitation, the ability of Hackett to effectively market its digital transformation and other consulting services, competition from other consulting and technology companies who may have or develop in the future, similar offerings, the commercial viability of Hackett and its services as well as other risk detailed in Hackett’s reports filed with the United States Securities and Exchange Commission. Hackett does not undertake any duty to update this release or any forward looking statements contained herein.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210504005898/en/

FAQ

What is the new top priority for HR according to The Hackett Group's 2021 research?

The new top priority for HR is becoming a strategic advisor, a significant shift from its previous ninth place ranking.

How many executives participated in The Hackett Group's 2021 Key Issues research?

More than 300 executives participated in the research.

What percentage of survey respondents expect business conditions to stabilize by Q2 2021?

41% of survey respondents expect business conditions to stabilize by Q2 2021.

What is expected to increase in HR departments according to The Hackett Group's findings?

There's an expected 20% growth in deployment of cloud-based HR suites and business process management tools.

What trend regarding workforce remote work is highlighted in the research?

Post-crisis, 25% of HR staff are expected to work from home, with an additional 33% in hybrid arrangements.