Where HR is and where it’s going: Four things we learned from Fosway Group CEO David Wilson

Persistent talent gaps, shifting post-pandemic workplace norms and the need to foster business agility are driving rapid change within the HR realm. According to David Wilson, Founder and CEO of Fosway Group, who joined us on the Workday podcast, the overarching theme for this year is the need for the HR function to prove its strategic value. Instead of remaining solely transaction-focused, HR must evolve to enable greater responsiveness and drive greater success.

The strategic transformation of the HR function is now a “non-negotiable requirement” for businesses, Wilson says. His UK-based HR industry research and consulting organisation has been conducting independent research on the HR and talent landscape for more than 25 years, offering insights on what the future likely holds.

Here are four key takeaways from this episode: 

1. Technology is driving strategic transformation

Investments in technology to support HR’s transformation remain as important as ever, Wilson says. “The reality is that HR and human capital management (HCM) suites are anchor solutions around which things get built.”

Businesses are using technology to automate processes, enabling HR to be “less about transactions, and more about value,” he says. Instead of only being concerned with “hiring and firing, operations and compliance,” the function is becoming more sophisticated and multidimensional, with every aspect of the talent lifecycle affected.

The HR skills of the future, Wilson says, add value to the organisation. Capabilities such as data analytics, workforce risk management and coaching skills become “more important as you focus more on development and less on transactions.” The new goal for HR departments is to be a strategic enabler for the business, helping it become more agile and responsive by backing up strategies with the right tactics to align the workforce to current and future needs.

Right now, uncertainty around the strategic value of HR is fuelling “a high level of executive dissatisfaction with HR analytics,” he notes. “That will change.” 

2. AI will mature, impacting both the workforce and the HR processes supporting it 

“The horse has bolted, and everyone is pretty much tied onto it.” Wilson is talking about AI – especially generative AI, whose power “blindsided a lot of people.” Many companies didn’t have an AI strategy, but they do now, or they know that they need one.

That said, Wilson sees many organisations proceeding cautiously, aware of risks and unsure of potential workforce impacts. The hype is high, but reality is catching up. “AI is really starting to disrupt how HR is done and how HR systems work,” he says.

“There’s a huge opportunity for us to replace a lot of transactional activity with AI-supported, value-adding processes. From a solution point of view, AI is going to be embedded in many things.”

3. Payroll will become a source of disruption 

Until now, payroll has “typically not been an area of disruption,” Wilson says. People had to get paid on time and accurately, full stop.

But technology-driven payroll disruption is one of Wilson’s big HR predictions for 2024. Real-time pay will become more common, along with cloud-based solutions providing organisations with a global view of payroll. 

“We’re at a point now where some of that disruption is starting to materialise,” Wilson says. “That will grow more. And the role that pay plays in the employee value proposition will also grow in importance, particularly with frontline employees.”

4. Talent crunches are reshaping workforce management and development

For many organisations across many industries, the talent gaps that cropped up with the COVID-19 pandemic haven’t gone away. “There’s still a lack of talent and skills,” Wilson says. “There’s a paucity of that in the market.”

That reality amps up the pressure on organisations to understand and augment the workforce they have today, rather than waiting for the right fresh talent to knock on the door. Strategic training and workforce development will become a growing focus of HR teams, complementing traditional recruiting and hiring activities. 

HR leaders are now paying closer attention to “how they develop the workforce, reskill it and upskill it,” Wilson says. A skills-based approach to training – as opposed to focusing on roles – is now a “dominant factor.”