Talent is at the top of the list for strategic business priorities right now, with people strategy as the key to digital transformation and growth. And that puts pressure on HR leaders to strike the right balance between dealing with critical business issues today and preparing for the business needs of the future.

We asked HR leaders in the Asia-Pacific how they’re resolving that tension, and how that’s shaping their priorities. As HR’s role becomes increasingly strategic and analytical, it also needs to remain connected with people.

“People strategy is twofold in the current environment. It needs to keep people engaged in the right roles for now, but also prepare the organization for the future,” says Emily Szakacs, a Korn Ferry Senior Client Partner based in Melbourne.

A Hong Kong-based financial services CHRO told us, “It’s always a struggle between what is important today and the needs of the future. We focus on purpose, but that can be distorted by the need to achieve immediate goals and short-term objectives.”

In this way, CHROs are grappling with the same challenges facing all leaders: how to simultaneously perform and transform in the face of increasingly rapid change.

Here are five questions HR leaders are asking to help them do just that.

1 What capabilities and skills will we need next—and where do we find them?

Our survey of 550 global HR leaders revealed 64% were confident they know what skills are needed for future growth—but only 50% are sure they can acquire them.

In our conversations with APAC HR leaders, learning agility, collaboration and curiosity topped the list. They know the rapid adoption of AI tools will affect workforce planning, and they are also moving towards more skills and experience-based talent models rather than the traditional focus on jobs and tenure.

“This is a different way of working,” says Szakacs. “I have seen a few organizations really embrace the idea. They’re in the process of defining what the future capabilities will be across their organization. Then they need to assess what their bench strength is, how they can fast-track people and move them around.”

It’s a shift towards talent pools, rather than thinking about levels.

2 How can our people strategy respond to external pressures?

Globally, the threat of recession and ongoing skill shortages means there’s greater scrutiny over how HR contributes to the bottom line.

Szakacs is seeing that play out in a shift towards cost constraints in Australia. “Leaders are preparing for a slower economy. There’s less external hiring and more focus on efficiencies—fewer financial incentives and more focus on development to keep people engaged. And we’re still dealing with supply chain constraints in some industries, which also increases costs.”

However, there’s a risk of global conservatism undermining potential growth in other regional economies.

“In Hong Kong, there was already pressure on keeping talent before COVID, and this was accelerated by the pandemic restrictions. Now we’re geared for growth and need that talent back. But most international headquartered firms have severe restrictions on hiring, especially across financial services,” says Sharan Srikanth, Senior Client Partner. Srikanth recently spoke with a client who needs 12 managing directors just in Hong Kong, and 40 across the region over the next 12 to 18 months. “But right now they can’t get the approvals to hire.”

The sustainability imperative is also on HR’s external radar.

“As part of some assessment and succession planning work I’m doing with CEOs and Chief People Officers, sustainability comes up again and again,” observes Szakacs. “Who are the right leaders to create that culture and agenda? How will ESG shape our employee experience?”

3 How will we invest in the next generation of leaders?

Leadership development is the number one HR investment area globally. However, Szakacs says she still sees organizations confuse performance with potential when identifying future leaders. “It’s about cultivating the right behaviors and mindsets early on, not assessing technical ability,” she says.

According to that same Hong Kong-based financial services CHRO, millennials form the largest talent pool today, with significant influence from the Gen Zs who are already in mid-level management.

And millennials and Gen Zs are ready for a fast-track to leadership, craving more exposure to opportunities and more experiences. “The next generation expects a partnership approach, and they also want a sense of meaning and purpose from their work. That requires a different type of leadership,” adds Szakacs.

Another head of HR says succession planning, “was opportunistic in the past, but we’re now considering a more structured approach. We’re building global talent hubs in India to support shared services and our global business.”

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4 Is it time to evolve our EVP?

Globally, 72% of HR leaders see a need to refresh their employee value proposition (EVP) to attract the right talent for the future. Almost all the Asia-Pacific HR leaders we spoke with are already working on this, with one admitting, “not much thought had gone into the previous EVP.”

Srikanth says an EVP goes beyond talent attraction. “An EVP also defines what the organization stands for, its purpose and culture, its point of view on diversity or its social commitment.”

He says it is no longer enough for organizations to exist solely to run a profitable enterprise. “If at any point in history there was a need to have an aligned purpose, it is now. And that starts with being transparent with employees, because you can no longer take their commitment for granted.”

“Our leadership team is very invested in culture, and we are currently refreshing our EVP, culture and values. This enables us to work together in the same direction,” a logistics company head of HR told us.

5 How can we use data and AI to make better HR decisions?

“When we talk to CEOs and Board members, they want HR to take a more data-driven approach, to think through a commercial lens,” notes Szakacs.

Yet it’s still early days for AI in HR. Globally, only 21% of HR leaders are using predictive analytics to make talent decisions, and just 11% say investing in tech and AI is a priority.

However, they know it’s coming. One CHRO told us, “AI is still in a rudimentary stage, but it has potential for development.”

Srikanth says this technology is much closer than HR leaders think. “There’s a natural resistance to change, but organizations of the future need to step up their focus on experimenting. You can’t just be distracted by the day to day.”

Perform and transform for tomorrow

Preparing for machine learning and predictive analytics is just one of the future-thinking opportunities HR leaders need to make time for, while also putting out talent fires today.

Ultimately, there is just one question that HR must continually ask: Is everything we’re doing balancing how we can be successful in today’s economic conditions with what we need to do to transform tomorrow?

The answer will help to resolve this perform/transform tension. And it’s also important to remember that change starts with people. By prioritizing culture and EVP today and investing in people’s skills and digital capabilities for tomorrow, HR can play a strategic role in evolving organizations to be ready for the future.

For more information, see what’s on the mind of HR leaders globally today.