The Top 5 HR Trends for 2021

Tom Hillman
4 mins

The combined force of an increasingly digital world and the sudden changes to the workforce in 2020 are accelerating some of the top human resources (HR) trends for 2021.

As in our recent article, many companies have replaced the traditional HR function with modern people teams. Expected to be ever more strategic, transparent and holistic in their approach to managing the workforce, they have increasingly used digital tools and data analytics to help them maximise the value of employees and drive business results.


2020 has brought with it an added layer of complexity for many people teams, which have had to tackle the effects of the pandemic on the workforce and handle more virtually than ever before.


As Ross Seychell, Chief People Officer (CPO) at HR software company Personio, told us recently: “Handling the pandemic, the shift to remote working, building long-term strategic plans, and balancing the day job has become the new norm.”


From spending time with HR teams at so many businesses and seeing these changes happen in real time, here is our breakdown of the top five HR trends for 2021.


1. Increasing use of HR tools


Digital tools have transformed the way HR professionals are able to recruit, onboard and manage employee data for their company. In the space of a decade there’s been a move away from spreadsheets and emails to a range of innovative tools that help to streamline processes, saving teams time to focus on more high-value strategic work.


Into 2021, we expect to see businesses continue to develop their tech stacks and introduce smart software solutions like Personio, BambooHR and HiBob into their people departments. You can find a full range of HR tools on our list here, which cover everything from streamlining operational processes to tracking employee feedback with apps like CultureAmp. 



2. Increasing responsibility for payroll


As smarter tools and automation are streamlining the payroll process, the HR function is increasingly responsible for managing payroll where companies don’t have the in-house expertise.


Smart payroll software like Pento automates the entire payroll process, letting you run payroll in just a few clicks with no prior payroll knowledge needed. And it’s designed to connect to HR tools like BambooHR and Hibob to reduce the manual work needed in updating information across both your payroll and HR systems.


3. Continued focus on employee development and wellbeing


As businesses have increasingly recognised people and intellectual property as their most valuable assets, people teams will continue to focus on developing a healthy company culture and building employee satisfaction.


Compounded by more remote working, many companies are reviewing their employee benefits packages, with a greater emphasis on wellbeing programmes, mental health and stress management services. 


For Sophie Theen, Chief People Officer (CPO) at financial services company Oakam, one of her team’s main priorities is building employee satisfaction. 


“Oakam's setup is fully employee experience focused. This means we run like a product team and get on with making our employees’ journey as rewarding and satisfying as possible rather than focusing on ‘when’ and ‘how’ we get a seat at the table, which to me is a common distraction for people teams,” said Sophie.


4. Building support for remote hiring, onboarding and development


With 2020 seeing many companies suddenly shift to a remote working model - a trend set to continue well into 2021 and beyond - many people teams have had to quickly build and develop new systems for not only recruiting and onboarding remotely, but also for building rapport and establishing team culture and cohesion virtually.


Personio’s CPO Ross Seychell sees this as an ongoing challenge that many people teams will be tackling well into 2021.


“I expect to see companies need to review their end-to-end employee experience living now in a permanently hybrid world. This is where teams and individuals will be hired, onboarded, work, collaborate and deliver in multiple locations at any time. 


“This is no small feat. Not only does it involve how and where people work, but how to onboard and supervise them, plus how to hire them, pay them and stay within legal and immigration rules. And whilst we’re there, ensure they’re engaged, healthy, productive and stay with us,” said Ross.


5. Continued emphasis on data-driven decision-making


With ever greater value put on a company’s people, understanding how changes in the workforce impact business results has become increasingly important. Into 2021, people teams will continue to develop their processes for collecting and analysing people data - also known as HR or workforce analytics - in order to help solve business problems.


Smart integrated software solutions will continue to make the process of gathering and comparing data across functions more streamlined and transparent, providing people teams and stakeholders with strategic insights into their workforce, policies and practices.


Oakam’s people team uses data to inform everything they do. “We’re fully data focused as we try to avoid having unproductive meetings or strategies that go nowhere because there was no data to justify our needs and plans,” said Sophie.