Action: adaptation – or How Can HR Departments Face the Challenges of the Future?

In 2023, HR specialists, managers, and directors have to face further competition for talents and shortage of candidates. Changes to Poland’s Labour Code regarding remote work and ESG, which becomes increasingly important, will also be important for HR departments. Moreover, HR processes will be further improved with the use of modern technologies, including machine learning and artificial intelligence (AI). What are the other challenges the HR industry will have to face in the coming months and years?

ESG – a moral and business necessity

Sustainable development and ESG (Environmental, Social, and Governance) are gaining popularity in Poland. This is the consequence the planned non-financial reporting requirement imposed on companies by the EU. According to Dziennik Gazeta Prawna, from 2026, some 3,600 companies will have to prepare non-financial reports. The Green is Good report shows that the number of organisations with a sustainable development strategy will increase by 79% over the next year.

In order to meet the expectations of customers, employees and investors, companies are significantly increasing their commitment to sustainable development. The implementation of an ESG strategy not only improves the competitive advantage and financing opportunities, but also makes the company more attractive for potential employees. Nowadays, social, environmental and corporate responsibility is a key factor in attracting and retaining the best talents in the organisation. Candidates expect security and transparency from their future employers. They also want to be sure that companies comply with regulations, and proactively care about the environment and social issues.

Effective use of AI can help recruiters do their job

In 2023, we will observe a further increase in the popularity of artificial intelligence (AI) in HR processes. This is due to the requirements of a fast-growing market on the one hand, and the growing offer of advanced AI-based solutions on the other. Therefore, companies will increase their budgets for technological HR solutions. According to estimates by Infiniti Research, the global HR software market is expected to grow by $11.2 billion between 2022 and 2026.

AI translates into cost reduction, greater efficiency, time savings, and process simplification. It’s no surprise that AI has an increasing impact on the labour market and helps achieve a business advantage, also in HR departments. While AI undoubtedly has many benefits, it also raises some obvious concerns in the industry about how and to what extent it will affect research and recruitment positions, both in internal HR departments and external consulting companies. We can already see more and more chatbots being used by companies recruiting employees on a large scale. This AI-based tool allows to automate recruitment processes and obtain basic information about the candidate. Yet not all people on the labour market are online. This applies primarily to employees in the highest positions, which can be important in discovering the full talent pool.

When introducing new solutions, attention should be paid to the changing preferences and expectations of candidates. On the one hand, AI and chatbots can provide quick and easy interaction with candidates and better customer service. On the other hand, many people still prefer direct contact with a recruiter/advisor and expect an individual approach to their needs. It is possible that in the near future HR work will be a balance between automated recruitment processes and human interaction. Employees will need to take advantage of the potential of artificial intelligence while ensuring that they do not lose their value as HR experts. Currently, AI relieves us mainly of mechanical, not intellectual work. It gives space for the best specialists to act where a human with their experience, intuition, empathy, and knowledge is still irreplaceable.

Undoubtedly, new roles will be created and jobs will continue to change, but continuous learning and adaptation to technological advances will remain the top priority in this process. AI, however, will not replace experienced and qualified experts, while employees who can skilfully use AI will certainly replace those who can’t.

War in Ukraine and labour market in Poland

The scope of tasks performed by HR teams changed when Russia’s full-scale invasion of Ukraine started. Organisations that used to have structures in Ukraine and Russia decided to relocate their employees, which increased the demand for mobility specialists. HR departments in industries where Ukrainian citizens accounted for a significant percentage of team members had to ensure continuity of work. HR departments also coordinated aid campaigns for employees and organised additional psychological support for employees from Ukraine.

The labour market adapted to the new geopolitical situation faster and more effectively than during the pandemic. However, a new challenge appeared on the horizon. The reconstruction of Ukraine will require investments from foreign companies that will be looking for employees. Recruitment agencies can certainly help with this process.

New regulations, new challenges

At the beginning of April this year, new home-office regulations were introduced. The amendment provides for full-time and hybrid remote work, depending on the needs of the employee and the employer, as well as the possibility of instructing the employee to work remotely. Employees with an employment contract have to submit an application for permission to work at home, including the time frame and their address. The employee also has to sign the safety rules and confirm that his or her workplace has the right conditions (e.g. fire extinguisher, comfortable desk). Employee safety is still the responsibility of the employer. Companies are also obliged to cover some costs related to Internet access, electricity, etc. This could mean an additional organisational challenge for employers and HR departments, which are required to create new processes for applications as well as signing and handling remote-work contracts. The HR industry should also ensure proper compliance with the new regulations.

First come, first served

HR processes are based on the ‘first come, first served’ principle. And it’s not just about competing for talents. The future growth of their organisations will depend on how quickly employees of HR departments can face the most important challenges in the industry and adapt the latest solutions. I am sure that, as was the case during the pandemic, they will quickly adapt to the new reality and will take their work to an even higher level.