Minding the gap: The four factors driving human capital change

Minding the gap: The four factors driving human capital change

Posted by Jeff Schwartz on May 5, 2017.

The first smartphone was introduced to the world 10 years ago. Today, they are so ubiquitous that it’s hard to imagine life without them for many of us. In the US alone, citizens now look at their mobile phones a combined 8 billion times a day, which means on average, a person checks their phone 46 times per day. In just 10 years, this technology has changed the way we communicate, the way we shop, the way we travel, and so much more.

And smartphones are just the beginning. Sensors, artificial intelligence, and robotics will continue to impact our lives more pervasively than ever before.

While individuals adapt to technology relatively rapidly, businesses and organizations move at a slower pace. The business practices of corporate planning, organizational structure, job design, goal-setting, and management have gone largely unchanged since the industrial age, despite the massive technological and societal shifts that have taken place since then.

Adapting at an even slower pace is public policy. Policies around income inequality, unemployment, immigration, and trade directly affect businesses through regulation, taxes, and legislation. Yet, laws and policies on topics such as minimum wage, trade tariffs, immigration, and education only shift after years of public debate. As a result, policies lag behind technology and society, creating imbalances and challenges for business and HR leaders.

Understanding the growing gaps between these four factors driving human capital change—technology, individuals, businesses, and public policy—is essential. HR leaders will have a critical role to play in closing these gaps by helping leaders and organizations adapt to technology, helping individuals adapt to new models of work and careers, and helping businesses as a whole adapt to and encourage changes in society, regulation, and public policy.

As Deloitte’s 2017 Deloitte Global Human Capital Trends report suggests, business and HR leaders can no longer continue to operate according to old models. They must embrace new ways of thinking about their companies, their talent, and their role in global social issues.

Embracing change
The current uneasiness with the pace of change is not new. The 1980s, for instance, saw a rapid rise in computing power that resulted in automated teller machines, online systems, and the IT industry’s lightning growth. The world adapted well as people gained new skills.

Today, however, more than a new set of business and working skills is needed. With change now permeating both private and public life, there needs to be a new set of rules—rules that reflect the shift in mind-set and behavior required to lead, organize, motivate, manage, and engage the 21st-century workforce. Companies need to focus more heavily on career strategies, talent mobility, and organizational ecosystems and networks to facilitate both individual and organizational reinvention. They must look at leadership, structures, diversity, technology, and the overall employee experience in new and exciting ways.

This won’t be easy. HR professionals are contending with circumstances that are making their role increasingly challenging. There are the challenges that all companies are struggling with as they reorganize around automation and digital business models. There is the general lack of preparedness from companies when it comes to career strategies that reflect today’s new lifestyles and the support people need in the face of all this change. This need is especially keen as new technologies overwhelm those same employees, impacting productivity and wellness. And then there’s the companies who invest in new technologies such as automation without involving HR—but fail to invest in leadership development and the tools HR needs to meet today’s workforce demands.

Despite hurdles, HR should look at the changing workforce as an opportunity to reimagine itself as well as its talent and organizational practices. It is an opportunity to create platforms, processes, and tools that will continue to evolve and sustain their value over time. Most of all, HR professionals must be prepared to step up and take the lead in what will likely be one of the most significant changes to the workforce ever seen.

Jeff Schwartz is a principal with Deloitte Consulting LLP, serving as the global leader for Human Capital Marketing, Eminence, and Brand. He is also the senior adviser for the firm’s Human Capital consulting practice in India.

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