Three areas HR must improve to be future-ready
Everyone is talking about the future of work. The world is changing fast and there are a number of factors affecting work. These include the ageing population, the balance of power shifting to Asia, economic stagnation in Europe, increasing consumer knowledge and power, digital disruption and globalisation.
One of the biggest potential impacts is technology and the so-called ‘rise of the robots’. Writers disagree on the extent to which automation will affect jobs. At one end there is the view that ‘we are all doomed’, a scenario in which automation will destroy large proportions of jobs. On other side is the ‘it will be all right’ viewpoint, where more classical economists believe that markets will adjust as they always have.
Take these headlines from the New York Times: “Automation might end most unskilled jobs in 10 years” and “March of the machine makes idle hands”. When do you think they appeared? Last year, the 1980s, 1950s? In fact, they appeared in February 1928.
We won’t be able to recruit ourselves out of this so we need to put more emphasis on these older workers and our employment proposition
Overall, the consensus is that technology will not destroy whole jobs but rather will take over tasks. OECD research finds that 60% of jobs could see 30% of tasks replaced by technology.
Another trend is the demographic one. Ageing is a global phenomenon. The percentage of workers aged 50-64 in the workplace has risen from 20% to 25% and continues to rise. It is estimated it could be 38% in some countries by 2030. Retirement age, which was dropping in the 1980s and 1990s, is now rising quite sharply and again continues to rise. Meanwhile, the working age population, between 15-64 years of age, is dropping by some 5% to 10% depending on the country.
This ageing of the workforce is the most significant shift in demographics but largely ignored by companies, especially with the focus on millennials and new talent acquisition. We won’t be able to recruit ourselves out of this so we need to put more emphasis on these older workers and our employment proposition.
- Employee value proposition
HR needs to reconsider the employee value proposition (EVP). There are three critical aspects to an effective EVP: working with purpose (the number one ask for thriving employees), career empowerment and permanent flexibility. These all support the notion of thriving employees, in other words the truly emotionally engaged. It is also vital that the EVP is authentic and not just words
- Organisational agility
In our CRF Report ‘What is agility’ we define agility as “the capacity to sense and respond rapidly to changing customer needs, to make decisions rapidly and to reallocate resources quickly as circumstances change”.
There are a number of ways agility is important to the organisation:
- Enterprise agility. An example is digital and cloud services provider Avanade which has removed grades and treats top management as a global, flexible resource
- Market agility, for example FMCG giant Unilever decentralising product development research and development to local markets but retaining digitally-enabled brand communities
- HR agility. Media and information firm Thomson Reuters creates pools of HR generalists for priority projects. They are trained in agile techniques such as rapid design and fast prototyping. Up to 30% of HR join this pool
- Academic Jo Perfetti talks about leaders as agility architects. He says if the external market is moving more quickly than your internal ability to move or change, then you are in trouble. He suggests leaders should spend 70% of their time maintaining their core business and 30% developing the ‘edge’, or new business.
3. Strategic workforce planning
Being agile is one response but not a substitute for planning. Many people do operational planning but not many do strategic workforce planning. At BAE we looked out 10-20 years. HR was responsible for the process and for supplying input data and analytics on labour supply and demand, industry trends and areas such as legal changes. Planning was embedded in the business planning cycle and the focus was on action and investment.
So, to ensure you are fit for the changes ahead, make sure you scan the horizon and focus on these three areas.