Silhouettes of people on keyboardHR anticipates the biggest gains in such areas as modernizing coreERP platforms, robotic process automation, data visualization toolsand virtual digital assistants/chatbots. (Image:Shutterstock)

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The HR department has been undergoing a transition in recentyears, repositioning itself as a key stakeholder in the broadermission and business goals of the company. But there'sstill a lot of work to do as HR organizations face challenges inhelping their enterprises hit objectives.

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Research from the “2019 Key Issues” report from The Hackett Group, Inc., finds that most HRorganizations aren't up to snuff when it comes to some milestonesessential to enterprise goals: developing executives who can leadin volatile environments, supporting enterprise digital transformation, and dealing withcritical talent/skill shortages.

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Related: What HR departments need to do to prepare for thefuture

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The skill shortage problem, as well as hanging onto key staffand carrying out business strategies, likely won't see improvementthis year, although other areas are tagged for attention. Flat HRbudgets (expected to shrink by 0.2 percent in 2019) and lowheadcounts (a probable decline of 0.4 percent) will probably impedeprogress.

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Organizations are moving ahead on digital transformation,although they're leaving their HR departments behind. Future growthin digital tech adoption is expected to carry HR along with it,however, over the next two to three years. HR anticipates thebiggest gains in such areas as modernizing core ERP platforms (42percent adoption growth), robotic process automation (2.5x growth),data visualization tools (59 percent growth) and virtual digitalassistants/chatbots (2.4x growth).

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But there's a laundry list of challenges facing HR that presentproblems in the ability to address them. Five “critical” areas,according to the report, include three that aren't new issues:developing executives who can lead in volatile environments,enabling successful business strategy execution, and enablingdigital transformation. The last two are new to the top five list:support for enterprise customer-centricity and the ability toaddress talent and skills shortages.

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There are also six areas in which HR has only limited ability torespond: leveraging technology to improve HR performance; aligningHR skills with changing business needs; modernizing HCMapplications; implementing end-to-end HR process management;improving talent management; and improving HCM analyticalcapabilities.

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Another area of concern is the way that HR is prioritizing itsareas for improvement—according to the report, some of thehighest-cited priorities are actually low on the action list.

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Harry Osle, The Hackett Group's global HR practice leader andprincipal in charge of the HR advisory practice, said in astatement, “In order to close the capability gaps we've seen, andto truly step up the pace of digital transformation, HRorganizations require a long-term plan of action that prioritizesclosing critical gaps while leveraging technology to its fullest.”Osle added, “It must be a multipronged effort that incorporatestechnology implementation, data standards, process redesign,organizational restructuring and more.”

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Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.