2016 Human Capital Management Trends
Did you know that three out of five employers are currently in the process of reevaluating their HR technology strategies?[i] Do you know what factors have so many employers wondering if there’s a better HCM solution out there?
We’ve identified seven key trends driving this dramatic shift in human capital management strategies. We predict we’ll all be hearing more about these in 2016.
Human Capital Management Trend #1: The Rise of the Unified HCM Platform
It appears employers are rethinking the wisdom of juggling multiple “best of breed” HR applications. It’s time consuming. It’s double and triple work, integration notwithstanding. And at the end of the day, it yields fragmented reporting.
Enter the unified HCM platform. The promise of one interface, one data base, and one holistic workflow is appealing to employers eager to refocus on running the business.
HCM Trend #2: The Ever Expanding Cloud
Another human capital management trend is cloud expansion. It’s no surprise, but it’ still significant: organizations are continuing to jettison on-premises HR systems in favor of cloud-based SaaS solutions. In fact, more than 50% of purchased HCM solutions are now cloud-based.[ii] And why not? They’re faster, easier, and more cost-effective to implement and use day to day.
Human Capital Management Trend #3: More Good Data, Please!
We’re all getting smarter about the value of quality analytics. Even small employers are becoming more sophisticated about the kinds of data they need. Here we go back to unified HCM platforms, which allow employers to access comprehensive, real-time data on demand to inform their planning and decision-making.
HCM Trend #4: Expanding ACA Requirements
The Affordable Care Act has already required many employers to not only step up time-tracking but in some cases facilitate monthly benefits enrollments. In 2016, new ACA reporting requirements go into effect, too.
Are employers ready? Doesn’t sound like it. We expect many employers to be looking for ACA support, stat, both from HCM systems and service providers who can handle this compliance burden for them.
Human Capital Management Trend #5: Rising Overtime Costs
The changes to overtime pay rules proposed by the U.S. Department of Labor are expected to be finalized in early 2016. They may go into effect soon after, and as soon as they do, some 4.6 million additional employees will become eligible for overtime pay. Needless to say, we anticipate great demand for workforce management solutions that can help manage overtime hours and expenses.
HCM Trend #6: Engaging an Evolving Workforce
Many companies are thinking more strategically about the role their workforce can play in meeting their business objectives. At the same time, workforce demographics are changing, as Baby Boomers retire and Millennials dominate. In order to engage this tech-savvy new generation, it’s a safe bet that employers will increasingly leverage mobile applications and more fully developed social media strategies.
Human Capital Management Trend #7: Investing in Workforce Management
Some employers have always connected the dots between cost containment and robust workforce management programs, but now recognition of these human capital management trends is growing. We will continue to see increased interest in workforce management technology that not only provides visibility into daily workforce activity, but can be used to manage costs, improve compliance, and enhance productivity.
Resources
[i] Sierra-Cedar, “Sierra-Cedar’s 2015-2016 HR Systems Survey White Paper, 18th Annual Edition,” retrieved from
http://www.sierra-cedar.com/wp-content/uploads/sites/12/2015/10/Sierra-Cedar_2015-2016_HRSystemsSurveyWhitePaper.pdf.
[ii] ibid.