The changes to resourcing over the last few years have led to some interesting challenges for organisations. One of the most interesting is the effect on the HR function. KPMG has published a report called Rethinking Human Resources in a Changing World that sets out some of the challenges and opportunities for the future, drawing on insights from 418 executives from around the world. More than half the executives in the study believed that the metrics used to measure HR would be fundamentally altered within three years. In other words, executives across the globe agree that there are huge changes coming to HR.
The challenge of a global workforce
The workforce is becoming increasingly flexible and global. It’s much harder to recruit and manage this sort of workforce than the sort that sits behind desks in your office, and speaks the same language as you. There are two issues here. First, geography. Teams working across countries or continents are becoming increasingly the norm. But recruitment in different cultures is not easy, and most HR departments are struggling to find the ideal balance between global HR models and strategies, and local flexibility. There is general agreement emerging among HR scholars that HR needs global standards, within which there is scope for some local flexibility, but companies need to work out exactly where they sit on the spectrum.
The second issue is new ways of working. Large parts of today’s workforce never set foot in an office, and many are not formally employed. They work on a contractual basis, from home, or from elsewhere, and are flexible about what hours they work. And HR is struggling to get to grips with that, because traditional HR models around areas like performance management, and traditional concepts such as loyalty and career development, increasingly don’t apply. And although remote working reduces overheads, it also reduces employee engagement, which can lead to increasing lack of identification with the organisation.
Another crucial issue is that an increasingly flexible and global workforce has far more employment options available to it, as well as far less loyalty or commitment to a particular company, which makes retaining top talent much harder. However, the difficulty of the task makes it far more important. After all, losing top talent means that your company not only has to recruit, which is expensive, but the skills and talents that your company has nurtured have now been made available to one of your competitors. And it’s fair to say that most companies don’t think that their HR function is good at retaining key talent.
Squaring the circle: how to address the challenges
There is a bright side: employee engagement may provide the means to address some of these issues. An HR function that can engage with employees, particularly those working remotely, is likely to be able to understand and meet employee needs and wants. However, even this requires new approaches to a global workforce, including flexible and adaptable HR policies, and an understanding that the workforce is less committed to the organisation than it was fifteen or even ten years ago. It’s much harder to engage with a geographically-distant workforce, but much more necessary.
What part does technology play in all this? Well, it has already made certain HR functions significantly easier, particularly basic administrative work like managing payroll. But it can also make it much easier to connect with employees around the world. And data analytics, used well, will provide insights into employee wants and needs that will help to identify training needs and talent gaps. Identifying talent gaps is probably the first and most crucial step on the way to recruiting and retaining the right talent: you have to know what you need before you can find someone with those skills, whether you find them from within and train them, or recruit from elsewhere. Data analytics offers the potential for HR to become much more empirical, rather than working on instinct or anecdote.
In order to be able to take advantage of these opportunities and address the challenges, HR needs a seat at the table. And like its IT counterparts, that means that it needs to be fully aligned with the organisation and demonstrate that it adds value. It needs to focus on providing solutions that the organisation needs, and talking the language of the business. The HR strategy needs to be driven by the organisation’s strategy, and in turn support the business if the HR function is to remain meaningful.