The pressing need for HR to respond to seismic changes
HR has gone through significant changes over the last decades and continues to do so at a rapid pace. Quickly shifting employee expectations, the progress in automation and AI, and more recently, the need to facilitate a response to the epoch-defining COVID context are creating a perfect storm for HR. The “future of work” has suddenly become a thing of the past – and HR is suddenly faced with having to meet the demands of the working present. This means empowering people with the right technology and driving the continuous improvement of their skills and talent. Enterprises need a strategic HR function to facilitate this transformation.
The workforce of today has to be self-fulfilling. It has to be a “CEO of itself.” The shelf life of skills has plummeted. Organizations can no longer buy themselves out of the challenge of not having the right skills and capabilities within their workforce. They must instead invest in upskilling and continuous learning, identifying those employees most in need of upskilling and those who are able to mentor their peers. In fact, upskilling is an investment that can pay dividends. Analysis by the Capgemini Research Institute shows that effective upskilling can help a 50,000-strong organization save USD278 million over three years.
The workforce of today wants information clarity quickly, immediate and direct communications, and transparency on what they need to do, how they need to do it, and where the business is going. It needs speed to value. Brexit, COVID-19, legislative changes – in recent years, organizations have been subject to repeated internal and external shocks. Organizations no longer have several years to get speed to value. They must transform HR to enable the business strategy – and they must do so quickly.
HR at the heart of change
The HR function must be at the heart of any overarching business program of change, facilitating the mindset and culture shift. As Deborah Ancona, MIT Sloan School professor, said, “Leadership often underestimates the importance of culture.” And yet, culture is one of the most important sources of competitiveness.
A recent report by Capgemini Research Institute, “Fast forward to the future,” revealed that within workforce management, organizations ranked “digitization of core HR processes – such as recruiting, onboarding, learning and development, and performance management – among the top-three priorities they will be working on in the next 12 months. However, to assume this more central role, HR must have a clear vision and demonstrate a mastery of applying a balanced blend of relevant technology, increasing organizational effectiveness, creating better experiences, and deriving greater value from people and machines working together. In short, HR must become more digital and more data-driven. It must become more human.
The employee as the organization’s new consumer
Changing workforce expectations are driving organizations to develop user-centric HR models to meet the needs and requirements of a workforce that is becoming ever more “consumerized” and mimicking consumers in its ability to instantly share employer brand perceptions and “shop around” between employers to satisfy its wants and needs – how they want to be employed, when they want to work, how they want to be managed, how they want to learn, how they want to manage their careers, and how they expect to network and collaborate with their co-workers. HR is now tasked with implementing these consumer-grade experiences through technology platforms.
Employers’ workforce expectations have evolved faster than organizations have evolved. Employees now expect digitalization in the workplace to reflect the consumer digital experience they are so familiar with outside of work. We perform daily essential functions from our smartphones, such as banking, socializing, sharing photos, shopping. To meet these expectations, HR needs to provide the workforce with tools that are Google fast, Apple cool and Amazon simple. Imagine how this would change the world of work and the level of engagement, performance and contribution. Imagine if employees were engaged to work like consumers are engaged to buy.
In the past, HR technology focused primarily on improving back-office activities for HR users. It was designed to support transactions, rather than interactions. This approach resulted in fragmented, siloed technology that conflicted with how people actually work. Today, the focus is on empowering business leaders, managers, and workers with mobile, intuitive, consumer-grade tools that enable them to connect and network, anytime, anywhere, and on any device. This people-centric approach is based on workforce experiences, not transactional efficiency.
It’s also true that the shift to future generating operating models and digitalized HR will require new skill sets and new roles to be created within HR. In fact, The Harvard Business Review recently identified 21 new roles that will be needed in HR within 5–10 years. The new roles will look very different to the HR business partner and reward specialists we see today. And there’s a growing demand for agile skills among HR-related job postings, with a demand increase of 160% among HR-related job postings over the past three years We will need workflow designers to define the full end-to-end workflows that are already a reality in HR, data architects and scientists, experience engineers, AI engineers, purpose activators, and chief experience officers.
The future, flexible, intelligent HR
HR is facing challenges on so many fronts and it can be difficult to know exactly where to start. So, finding the right partner with the right blend of HR and technological expertise is essential. But here’s my summary of the steps organizations should be taking in order to start their HR transformation:
- Start with a thorough HR health check to analyze your current state of people, processes, technology, and the voice of the customer to determine the operational and culture shift your HR function needs to make.
- Build an HR strategy to define and build an organization-specific people plan and roadmap to equip your HR function to manage change.
- Develop a HR next-generation operating model and service delivery model design underpinned by AI, data, and automation.
- Implement and integrate the technology with vendor due diligence.
- Identify robotic process automation (RPA) and artificial intelligence (AI) proof-of-concept cases for HR.
- Upskill to the next-generation HR operating model and redesign the capability within your HR function to align with business changes driven by the transformation.
Intelligent HR is about providing insight and data so that decisions can be made in the business in a holistic way to provide a smooth, seamless employee experience. SAP coined the phrase “moments that matter” in the employee lifecycle; if an organization doesn’t capture and support its employees’ important moments, it can lead to disengagement and employee attrition.
HR needs to become a future-fit function, powered by data, insight, and digital technology, envisioning and enabling the fluid and augmented workforce of the future. It should fulfill the strategic potential of the HR function in caring for and preparing the organization’s workforce for a better tomorrow by delivering personalized employee and career experiences.
The future is Intelligent HR, a digitalized HR function driven by insight and purpose.
Gartner Agile HR Function Survey, 2020
Managing Vice President | People & Organization