'The old order changeth yielding place to new
And God fulfills himself in many ways
Lest one good custom should corrupt the world.' - From The Passing of Arthur by Alfred Lord Tennyson
These are bewildering times that the HR fraternity lives in now. Terms like skill volatility, flexibility, uncertainty, IOT (Internet of Things), analytics etc. are commonly bandied about. Topics within these are frequently picked up as themes for various HR conferences. With so many things to grapple with, the multiple levers to manage and complexity of interlinkages between initiatives, it is certainly enough to make our head spin. Which are the big trends and what is the definitive impact for HR? In this article, I will give examples of a few practices being adopted by organization and then develop the framework of the top disruptive trends in the workforce today and their impact on HR.
Transformation of HR over the decades
Over the course of past few decades, I have seen how HR has transformed as a function from being “inside-out” to the current stage of getting to be more “outside-in”. The transformation and evolution of HR has been summarized in research1. This journey has evolved along four waves, and we may see the HR functions of organizations at various stages of this continuum, with the more progressive organizations at Wave 3 and aspiring to reach Wave 4.
Wave 1/HR Administration: This rudimentary stage focuses on overseeing basic adherence to Payroll changes, providing employee welfare support, recruitment administration and following regulatory compliance
Wave 2/HR Practices: The HR function takes on additional responsibilities of providing training support and develops scientific methods and teams to deliver on compensation administration and rewards
Wave 3/HR and Strategy: HR functions take on full business partnership role, role of analytics increasing in decision making, understanding the firm strategy and how HR can play a role in that. Analytics remains focused on descriptive analytics and at best diagnostic analytics (lag indicators such as attrition, top causes, demographic data, recruitment cycle time etc. to name a few)
Wave 4/HR and Context: HR practices within the function take into consideration the context of the market, environment, economics, politics, available technology and then designing HR strategy to stay up to date on this. Predictive and prescriptive analytics enable decision making. This approach is also referred to as the Outside/Inside Approach (Ulrich & Dulebohn, 2015): This orientation will result in HR professionals constantly attuning their HR work to customer, investor and community expectations.
Outside-in approach at the workplace – some examples
A recent study showed that 60 percent have had poor candidate experience2 and another study has shown that 83% of the HR companies highlighted that Employee experience is crucial to their org, with more investments in training, workspace and rewards. From nearly 150,00 applicants for jobs, annual hiring was of the order of 3500 employees. Virgin Media correlated rejected applicants with nearly 6 percent of the subscription cancellations — an annual loss of $ 5.4 million. A realization that poor candidate experience was translating into loss of loyal customers and ergo revenues, Virgin Airlines recrafted their entire candidate experience.3
Use of predictive analytics to identify potential attrition cases is called out in nearly every predictive analytics seminar. One of the many organizations to realize the benefits of this was IBM, which demonstrated a potential saving of $130 million through improved retention.
Professionals today desire instant feedback, a trend commonly observed in the phenomenon of instant gratification of social media! There is growing realization that annual performance reviews don’t help and HR practitioners debate the methods and benefits/disadvantages of doing away from the annual bell curve. Research shows that one-fourth of employees feel that annual performance reviews don’t help and the absence of direct correlation of conventional performance appraisal systems with organization performance argues for doing away with this system. Examples of continuous performance appraisal systems being adopted are increasing (Netflix, Deloitte and Accenture have removed the process of formal annual reviews4) with documented increases in time saving and morale improvement due to this. GE’s system of continuous feedback called “touchpoints” resulted in a fivefold increase in productivity, and Adobe’s system called “Check in” has documented 80,000 man-hours of time saving and a 30% reduction in voluntary turnover.
Technological advancements have touched HR processes in hitherto unanticipated ways, with the use of Augmented Reality and Virtual Reality tools. The British Army increased its recruitment by 66 percent using Virtual Reality5. Jaguar is proposing to hire significant numbers of computer engineers through a Virtual Reality game targeted at gamers who can crack their augmented reality Gorillaz app6. General Mills, Intuit, etc. are using virtual reality to attract talent at career fairs, inductions and so on.
Availability of opportunities has become more and more transparent and paradoxically, the war for talent continues. 90 percent employers anticipate more competition of talent in India, North America and Asia. The trend of gig economy (part-time, contingent, freelancing etc.) has been recognized by over 71 percent of senior HR executives as a significant trend7. 53 million freelancers in America demonstrate the trend of technology-enabled professionals choosing to create ecosystems of work they enjoy8.
While HR functions grapple with the challenges associated with scheduling these workers along with their permanent staff to improve productivity, enabling management processes for this workforce and struggle to be compliant from regulatory adherence, a few organizations have taken this approach as a strategic choice for better talent management. Intuit predicts that 40 percent of the workforce will be freelancers over the next few years9.Dell aims to have 50 percent of its global workforce on flexible schedules by 2020. Currently, 25 percent of the workforce (approximately 25,000 employees) have planned with their supervisors to regularly work a flexible schedule from the location of their choice, provided they have the tools and technology to support working outside the office10.
Machines are increasingly taking over the mundane jobs and greater focus on human creativity and intelligence to be seen in the coming years. For example, Amazon, the e-commerce giant, snapped up Kiva Robotics in 2012 for a staggering $755 million. Amazon now has 30,000 fulfilment robots working in its warehouses worldwide, and the company is expected to replace all employees who perform repetitive tasks with machines in the not-too-distant future. If HR practitioners feel comforted that this trend is only seen in manufacturing or technology jobs, the complacency is deeply misplaced. Routine HR jobs are getting intermediated. An example of this phenomenon is observed with “Wade & Wendy”11. This artificial intelligence based two personal assistants named “Wade & Wendy” are bots, where Wade is your career counsellor and Wendy is your hiring assistant. While Wade guides people through the job hunting process, Wendy is busy helping managers with screening processes for new recruits!
Five disruptive forces and HR challenges
The exponential pattern of technological change is resulting in breakthroughs which are in turn, creating disruptions in markets and business models. Business is required to demonstrate flexibility, work with distributed and transient workforces that morph to the rapid cycles of business reinvention. Employees are being required to engage with automation, deal with rapid skill obsolescence and hence constant upskilling, transitioning of low end or repetitive work to robots, increasing dependence on artificial intelligence etc. The social and organizational reconfiguration is resulting in increased democratization of work. Hierarchical organization structures are devolving into balanced communities built upon relationships which are short-term, for the periods of project. Long-term alignment has given way to “shared purpose” and short-term engagements. Talent is now looking for diverse work arrangements, beyond traditional full time employments and moving to freelance, outsourced or crowd sourced workers. Enhanced connectivity has accelerated global real time communication, product development and speed of go-to-market. Organizations that support and create trust cultures and purpose built networks are the ones slated to survive in this new world. An all-inclusive global talent market implies seamless distribution of the work across the globe. Enhanced life spans, talent availability in diverse talent pools etc. will necessitate the segmentation and direction of work to the “best” talent, either inside or outside the organization.
A differentiated leadership and engagement approach will require talent to be engaged through flexible approaches towards policies, practices, work designs, pay and benefits. The comfortable paradigm advocated by erstwhile HR organizations of “one size fits all” will be as relevant in the emerging environment as the mammoth! The rapid technological breakthroughs involving global collaborations would imply that HR needs to leverage artificial intelligence and machine learning to improve efficiencies in sourcing and reducing fulfilment time.
Recruiters will no longer spend the bulk of their time and effort in mining job portals, but leave this work to smart algorithms which complete this in a fraction of seconds. The focus will shift to building talent relationships, mapping, identifying and engaging talent in specialized communities of practices and closed groups, focusing on the skill trend analysis and feeding these insights into talent forecasting and skill development initiatives. However, providing an engaging recruitment experience will remain a fundamental task of a recruiter, since talent will have multiple options and without providing this experience, they would take their skills to another organization which would respect and value them more.
The enhanced connectivity of distributed and global workforce would require developing high trust cultures and purpose-built networks. The role of HR business partner will evolve to enhancing employee experience, community engagement, enabling collaboration and providing purpose and meaning in work. The increased thrust on employee and manager self-service would necessitate an enhanced employee technology experience. From an organization and performance architecture, the focus will be on aligning and driving performance, facilitating work-driven network management, community development and facilitating boundary less careers.
On paper, all of this is easy to know. The challenge for the HR fraternity is understanding the specific “outside” influence relevant for their context and then curate their “inside” context to align and deliver.
1 Are we there yet? What’s next for HR?: Ulrich and Dulebohn (2015), pp. 190
2 Candidate Experience Study
3 Bad candidate experience cost Virgin Media $5M annually and how they turned that around
4 Get rid of the performance review
5 This is the VR experience the British Army is using as a recruitment tool
6 Can you break the code to get a job at Jaguar?
7 Deloitte Global Human Capital Trends 2016
8 The rise of the freelancer economy
9 Intuit 2020 Report
10 Inside Three Companies That Are Innovating Flexible Schedules
Boudreau, J. W. (2015). HR at the Tipping Point : The paradoxical future of our profession. People & Strategy, Vol.38, Issue 4,46-54.
Ulrich, D., & Dulebohn, J. H. (2015). Are we there yet ? What's next for HR. Human Resource Management Review, Vol.25, 188-204