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The evolving role of HR in the digital economy: Top in-demand skills for HR professionals

The evolving role of HR in the digital economy: Top in-demand skills for HR professionals

The transformation of the HR role is evident, with an increase in demand for skills supporting HR strategy and workforce planning, and organisation development.

As new technologies and advanced digital tools emerge rapidly, businesses now have the resources to transform their HR teams. 

Even beyond the automation of traditional tasks, such a transformation empowers HR professionals to unlock invaluable insights into their organisations' human capital, allowing greater alignment in values and skills with the business’ strategic direction. It will also empower HR professionals to streamline their processes, opening up an opportunity to focus on strategic endeavours and high-value initiatives that drive business growth.

At the same time, the demand for digital transformation grows means HR professionals now require a broader spectrum of digital skills. This encompasses expertise in areas such as big data analytics and human resource digitalisation. 

The inaugural SkillsFuture Jobs-Skills Insights Report for the HR Sector, developed by the Institute for Human Resource Professionals (IHRP) in partnership with SkillsFuture Singapore, looks at how the skills composition of HR roles is evolving in response to the digitalised economy’s rapid growth. There are three main sections in this report, summarised below.

HR at the helm: Navigating business success 

The emergence of new technology and software now allows automation systems to take on menial tasks such as payroll processing. Not only has this reduced a significant amount of time on manual calculations and data entry, but human error is also minimised through automatic calculations and the provided features which flag any inconsistencies. Even in areas of talent management, operational processes have been significantly streamlined by efficiently monitoring talent and skills inventory across the entire organisation. These software also facilitate strategic planning for upskilling and job redesign initiatives for employees.

Working off this resulting expanded bandwidth following the elimination of these manual tasks, HR professionals can now harness their increased capacity to assume more strategic roles in collaboration with their organisation’s senior leadership.

For more clarity, IHRP's Human Capital Diagnostic Tool (HCDT) helps assess an organisation's human capital maturity across eleven key HR areas, benchmarking it against industry 11 standards, shown below. 

skillsfuture ihrp 11 processes hcdt

According to the report, undertaking this endeavour enables enterprises to pinpoint their strengths and weaknesses, identifying the gaps that require attention. This in turns empowers HR teams to better understand the business and design specific programmes for progressive scaling.

The increasing recognition of HR's strategic importance in driving organisational success has led to a shift in the role of HR — more emphasis is being placed on playing a more advanced role as strategic partners. HR now takes the driver’s seat, partnering with senior business leaders to make critical decisions and navigate business success. For example, HR designing and managing a HR strategy and workforce planning approach enables value creation to achieve the organisation’s purpose and business objectives with the desired employee experience.

The transformation of the HR role is evident, even in HR job postings, with an increase in demand for skills supporting HR strategy and workforce planning (up 130%), and organisation development (up 96%). 

skillsfuture ihrp hr job skills

The top three skills for each skill category were noted as follows:

HR strategy and workforce planning

  1. Workplace performance diagnosis
  2. Human resource advisory
  3. Manpower planning

Organisation development

  1. Organisational change management
  2. Organisational design
  3. Organisational culture development

Critical core skills

  1. Communication
  2. Collaboration
  3. Problem-solving

Digital skills: A pre-requisite for modern HR professionals

The growing market expectation for HR professionals to acquire more digital skills is evident in 2017 where businesses embarked on their digital transformation. This demand has since sustained and today, digital-related skills are as highly sought-after as critical core skills in the hiring of HR professionals, emphasising the growing recognition that HR professionals must equip themselves with these skills to meet the evolving needs of the modern workplace.

skillsfuture ihrp hr skills demand

HR professionals now need to embrace continuous learning and adaptability to remain effective in this dynamic landscape as HR functions continue to digitalise. The report identified the top five digital skills HR professionals should have a basic understanding of to stay relevant.

Human resource digitalisation

Innovate HR processes and practices through digitalisation by evaluating its impact on the delivery of HR services. This includes:

  • Automating menial tasks such as payroll, leaves, and claims, or e-learning courses as part of induction.
  • Linking HR practices to revenue and profits, not just to engagement and turnover.

Big data analytics

Analyse and validate significant volumes of data to discover and quantify patterns and trends to improve business operations. This includes:

  • Finding correlations between attrition and engagement data across different job roles.
  • Looking at factors such as workload and environment and see how they affect satisfaction and engagement rates.

Data protection management

Develop and implement a data protection management programme to comply with the Personal Data Protection Act 2012. This includes:

  • Ensuring that employee data is properly governed with standards that are constantly reviewed.
  • Understanding the sensitivity of specific data such as performance grading and salary.

Data and information management

Gather and use data and information for planning, monitoring and review. This includes:

  • Gathering feedback from employees to curate better work activities.
  • Implementing employee-manager feedback surveys to better understand work relationships.

Human resource analytics and insights

Deploy statistical and analytical techniques and tools to generate human resource-related insights and projections to support the business. This includes: 

  • Using predictive analytics to predict attrition or employee engagement.
  • Using statistical modelling to test for significant differences between employee groups.

Riding the wave of generative AI through the HR lens

Along with digital skills, the advent of AI has gained significant attention and traction in recent times. With its capabilities, utilising generative AI is proof that organisations need to step up and follow the way of technology. In fact, the skill 'AI application' has experienced an upward trend in HR job postings over the past five years with a 97% increase from 2021 to 2022.

skillsfuture ihrp hr ai skills demand

The report adds: "On the individual level, HR professionals can enhance the efficiency of their day-to-day tasks by simply mastering the practical use of AI platforms without the necessity of understanding the technical aspects. However, as HR becomes more strategic partners of the organisation, HR professionals are and will be instrumental in navigating the intersection of organisation development and the integration of GenAI, ensuring a synergy between human talents and technology."

In a separate study by the Institute for Corporate Productivity (i4cp) supported by IHRP, it was found that there is almost no area of HR that will remain untouched by the impending AI revolution, as asserted by employers. AI will affect all aspects of HR with foremost HR functions being learning and development (58%), people analytics (57%), and talent acquisition (54%). 

Expanding on this, the Jobs-Skills Insights Report explored how AI can reshape these HR functions. 

Learning and development

  • Personalised learning pathways for employees by recommending specific courses based on employee skill sets and preferences.
  • Assess skills of the workforce and identify gaps in knowledge, helping HR to develop targeted training programs to address the gaps.

People analytics

  • Analyse historical data, employee feedback and other variables to predict which factors are contributing to employee engagement.
  • Flag out employees at risk of leaving, allowing HR to take preventive measures by analysing job satisfaction, performance metrics and external market factors.

Talent acquisition 

  • Efficiently scan and filter through large volumes of resumes, identifying top candidates based on specific job requirements.
  • Create chatbots to engage with job applicants, answer queries or even conduct initial interviews, freeing up HR personnel for more strategic tasks and providing a seamless candidate experience.

In the future, AI may also affect the following functions:

Compensation

  • Benchmark salary by analysing industry data for specific roles, ensuring that the business remains competitive in attracting and retaining talent.
  • Help identify potential diversity pay gaps within the organisation, ensuring fair practices and compliance with regulations.

Workforce planning

  • Predict future staffing needs based on historical workforce data and external market trends to help plan for recruitment and other strategies accordingly.
  • Assess employee performance and potential career paths to assist in identifying high-potential employees for leadership or management roles.

However, the increasing integration of AI also raises profound ethical concerns. If not carefully designed and monitored, AI systems can actually erode trust. Hence, while AI has the potential to optimise HR processes, it is vital to remember that at the core of any organisation are its people. HR departments must play a pivotal role in ensuring that AI is used ethically and transparently in fostering a workplace environment where employees feel valued, supported, and heard.


Lead image / SkillsFuture Jobs-Skills Insights Report

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