HR Must Look Up
What’s on your HR Radar?
You’ve coped with Covid19 and your 2022 plans are underway — but have you looked up to the horizon? There are imminent disruptions that are incoming and that cannot be avoided.
Ignorance is a short-lived bliss. Uncertainty and volatility are facts of modern life and seemingly futuristic ideas have a habit of coming into sharp focus much faster than initially expected.
So “Look Up” and see every change as and opportunity for HR to create a competitive differentiation for your organisation. Get ahead of the game and be prepared, in advance, for questions from the Board about items that should be on your HR Radar.
Here’s 10 imminent disruptions on which HR must take the lead (click the links to find more detailed information). Hopefully some of these are already part of your HR plan:
1. Agility is a strategic differentiator. It is a racing certainty that there will be another shock to your market in the next few years. Organisation agility is now a baseline requirement for every business and the key will be to maximise the benefits of cloud infrastructure and an agile operating model. Where work is retained in-house, HR has to cope with upturns, down-turns and other disruptions — Have you developed contingency plans for the following (non-exclusive) events?
a. Upside Disruption — one of your colleagues could easily have an inspirational insight with potential to be the next breakthrough innovation that will completely change your sector. How will you know? Can you capture the idea and develop it? How will you rapidly scale up and expand to maximise the potential? Do you have the agility to handle all the extra HR transactions without slowing the business down?
b. Downside Disruption — What are the elements in your skills-profile and who will you retain / retrain / redeploy if a market/major client disappears due to an international conflict or a market disruption? How will you map your organisation capability and assess the impacts?
c. Location lock outs — As recent events have shown us, unexpected impacts of politics, disease and natural disasters are a fact of life. At some point, it is almost certain that you will have to close one, or maybe all, of your locations and still excel at serving your customers. With HR actively leading the response, the outcome can be surprisingly advantageous (Quick Shift to Remote Work Improves Conduent’s Client Outcomes)
Unfortunately, Covid is not the flu (I hope I’m not the one breaking this news to you). For several decades, the World Health Organisation & local health planners have been expecting a highly virulent & harmful, one-in-a-hundred-year, flu strain to appear; and the last one was in 1918, the next one is long overdue (WHO Surveillence Report). To mitigate this long-predicted disruption, take a psychological leap and imagine that Covid is a low level stress test that’s enabling you to plan for a bigger event, to know where to go to quickly initiate risk assessments, tracking, tracing, compliance with local vs national rules (see AI support for pandemic related workplace challenges) as well as support for remote working and preventative isolation.
Bear in mind that all your different divisions/locations could be affected in different ways; all three disruptions could even happen at the same time.
Has your organisational design considered whether it’s best to manage these risks internally or to use the flexibility available from outsourcing transaction based processes that convert fixed overheads to variable and scalable costs? HR agility is now a mission-critical priority and, these days, it is possible to align HR and to have rapid response contingencies lined up by deploying Dynamic HR (HRO 4.0).
2. Distributed teams — remote working with collaboration between geographically dispersed team members is now normal in our “no-normal” world. There are some challenges for team managers but there are also great advantages associated with this ability to instantly collaborate with people from all over the world. How will you maximise the benefits?
a. Diversity of thought: HQ-only meetings should be a thing of the past. There is no need for a US HQ to have a strategic meeting without involving the experts based in EMEA, LATAM and APAC and to include representation that matches the customer base. Technology enables instant translation and participation. Issues with globalisation, cultural sensitivity, legislation and localisation can be understood from the outset, avoiding costly mistakes and enabling better, fully inclusive decisions.
HR can drive inclusive culture using digital workplace tools to enable collaboration, developing micro-learning content so that people can use the tools effectively and promoting inter-cultural training to optimise the diversity of thought across the group.
For many under-represented minority groups, the requirement to commute to offices in major conurbations at “rush-hour” has been career-limiting or even impossible. Commuting can be expensive, conflicts with school drop off and pick up times, restricts the ability to care for dependents, and it can be difficult, painful or impossible with many physical, social or psychological conditions. Each of these factors keeps a section of the workforce away and has a bigger negative impact on already under-represented groups.
Remote work doesn’t cure all ills and isn’t ideal for all people but it can liberate whole sections of the community, increasing individuals’ choices and corporate access to talent.
If implemented well, remote working can even improve outputs and customer satisfaction, even in contact centre environments with properly supported home based workers.
b. Resourcing Optimisation: Where in the world is the work done best, and who is best suited to do it? Why be limited by local skills shortages when there is a world full of capable people out there?
Strategic and Tactical Workforce planning and the optimisation of flexible workforce engagement are already business differentiators and, as a result the Vendor Management Systems market is mature but still growing and consolidating, However, as the AI for skills matching becomes mainstream and embedded in HR ecosystems the power of staffing agency market knowledge that sits with MSP providers is being diluted by improved direct sourcing techniques.
Talent Acquisition was second only to HCM/Payroll in terms of investment deals in 2021 (2021 HR investment value analysed by Anita Lettink) and with everyone focused on recruiting new staff, it’s easy to overlook the potential in your existing workforce. That would be a costly mistake when it is far more efficient to invest in and upskill your own staff.
As the market for external skills becomes red hot, companies are investing heavily in building awareness of career opportunities and offering digital upskilling services to employees to improve bench strength in key (future) skills areas.
With digital learning systems and curated learning pathways, every organisation can re-equip their workforce with up to date skills. Some firms have had the foresight to develop a learning culture in anticipation of today’s skills shortages, and the most enlightened have driven this from the top down, like Nokia’s ex-CEO, Risto Siilasmaa, who had the forsight to challenge ALL of his managers to study Machine Learning)
c. Asynchronicity — Many employees are used to working remotely and your success with inclusivity is almost certainly dependent on family-friendly flexible work patterns. On the flip side, projects can run extremely efficiently, if the team can use technology to “follow the sun”, 3-days of work can be delivered in just 24hours, as standard.
This all means that work often has to be asynchronous and HR should be leading the charge with policies and platforms that enable collaboration together with training and learning structured to enable the workforce to self-educate as and when they need the support.
There’s been exponential growth in the use of systems that enable real-time project coordination and collaboration (e.g. Microsoft Dynamics, Google Workspace, Slack, Monday etc). Asynchronous support and training has been enabled by EPSS systems, like WalkMe and Whatfix, which enable self-paced system walk throughs, training in the flow of work and instant updates of Standard Operating Procedures, how-to videos and in-house creation of training materials. These can be used by individuals but the impact on effectiveness and “speed to productivity” is multiplied when these tools are in the hands of competent learning content designers, trained in “5 Moments of Need(TM)” methodology.
Policies that support remote and asynchronous collaboration and structured workforce enablement that delivers training in the “5 Moments of Need(TM)” are already a differentiator for high performance businesses and will become essential as volatility, and therefore asynchronous working, become normalised.
3. Skills, Skills Tech, Upskilling and Skills. every strategic initiative or risk mitigation that the Board initiates is a requirement for skills. The ability to exploit agility, innovation, technology and collaboration is teachable and skills tech is rapidly evolving. At the same time employees are crying out for both recognition of their existing skills and personal development, making both critical for attraction and retention of employees.
In many organisations, particularly large project-based companies, HR is pivoting from a work or employee based planning and HCM structure to an agile skills-based teaming model (see Novartis, Pepsico, Seagate & Standard Chartered discuss talent market places).
In reality, the skills technology is still maturing. Whilst progress is fast, no comprehensive skills ontology or taxonomy has emerged that fits every company, and, whilst some companies have had great successes (see Unilever introduces skills internal market), not all companies can operate an internal skills market.
Most L&D professionals already recognise the shift to skills-first thinking, as shown by Donald Taylor’s “L&D Global Sentiment Survey 2022”. However, it’s HR leaders that need to integrate the skills development with a wider HR strategy and every HR leader needs to understand this trend and develop a skills strategy. To help CHROs, Josh Bersin’s given some great advice on the importance and challenges involved, pointing out that building a company skills strategy is “Harder (and More Important) Than It Looks”.
The groundswell for skills management is so great that a plethora of companies are emerging with technology to support skills identification, inference, mapping, matching, deployment and development that are core to running efficient organisations. Several have become Unicorns (e.g.Eightfold AI or Phenom)
The challenge for CHROs is that HR has previously operated with the building blocks being jobs and departments and career paths. It is trtue that competencies was a focus at one point, but most companies (at least those over 500 people in size) don’t really know who has what skills and who has the potential and desire to develop skills that will be needed for future projects.
The good news is that learning technology makes upskilling relatively lower cost than it was previously. Investing in that technology enables organisations to be highly responsive, with in-built support for self-created knowledge transfer and self-paced upskilling at the moment of need. Training is, therefore, no longer an arm’s length service or a costly nice to have, a clear differentiator of high performing companies is a drive for improving their L&D services.
The biggest challenge is that the technology and needs are all developing so fast that internal learning departments are struggling to keep up with volatile demands in the business and to ensure that the training ecosystem is “future-proofed”. This makes it attractive to team a technology neutral outsourcer to manage, enhance and augment the in-house technology and service delivery whilst the in-house L&D professionals focus on embedding learning culture and identifying opportunities to align learning with workflows.
This trend won’t wait, it’s snowballing and you don’t want to be left behind — how are you driving your “ Workforce Enablement”.
4. Crypto rewards are being very heavily promoted and initial challenges with using them, such as tax treatment and transaction costs, are being addressed by investors and the transaction platforms. As well as the barriers to use being reduced, the awareness among International Board members, advisers and high-level consultants/freelancers is increasing and crypto-rewards can look especially attractive for those based in countries with volatile traditional currencies.
The trend (and the hype) will continue to spread. Many HR leaders are undecided on whether crypto payroll will lead to corporate digital currency adoption, but the currency providers clearly see that as the route to making their coins mainstream.
If you don’t already have a policy, what would trigger you to include this form of compensation? and, what will you say if a Board-member requests crypto payment?
The CHRO needs to be able to take an informed position on crypto-reward adoption, even if that position is simply to avoid the complexity. Be prepared to have an informed discussion on the following trends:
a. Crypto-payroll wholly or partially in one or more of a hundred cryptocurrencies. The market has moved on in the years since 2018, when Canadian speed skater Ted-Jan Bloemen received his sponsorship payments in crypto. It’s still a niche payment mechanism but momentum is growing.
Some serious companies like GMO Group, AirBnB, Uber, Meta, Google and others already offering employees cryptocurrency payment options for wages or bonuses and companies in the industry, such as Fortress Investment Group, M31 Capital, Nansen, and SuperRare Labs are apparently having paychecks deposited onto cryptocards that keep transaction costs down and make funds accessible to spend. According to Dash Fomina, even the US Navy have been trying crypto salary payments out for some time.
b. Non-Fungible Tokens (known as “NFTs” which are unique digital items that can be traded) are also rising in popularity and could be a great incentive for the digital native generation that is entering the workforce. These have the added advantage of being highly trendy (see: Premier League Football NFT, value $590 million) and you’ll almost definitely increase your employer brand exposure by publicising an NFT based incentive. Will you be an early adopter in this market to catch the eye of the new generation of workers, gain publicity for your employer brand and increase employee choice? or, do you need to rehearse the arguments against adding this complexity to your systems?
c. Crypto-compliance Risk: Cryptorewards are a fast-evolving arena which most governments have under frequent review. Compensation and Benefits decision-makers need to be aware of the changing landscape and this is especially true for those with a globally mobile workforce because you can’t predict how a country with a volatile currency might retrospectively treat this class of rewards.
All the major accountancy firms now have specialist advisers in place, ready to help you understand your specific situation and some ‘Big 4’ firms are even assessing their own employees’ exposure to crypto investment risks, which gives some indication of the rise in both use and perceived risk of crypto..
What is your policy on incorporating crypto payments into your global payroll and why? What would change your mind on that policy?
5. Homo Augmentus is a term that Nokia Bell Lab coined to describe the way AI and robotics are replicating, enhancing and augmenting human capabilities, enabling Homo Sapiens to overcome their physical and mental limitations.. The combination of human and machine is rapidly evolving, technology is dropping in cost and huge advantages are available to companies that move first to maximise the benefits from having super-humans on the team.
a. Super-humans: Which roles / people in your organisation would you like to supercharge or duplicate? Which human limitations (capacity, geographic availability etc.) are holding your organisation back? There are now opportunities to address both the upside and downside of human capabilities.
b. Diverse Talent Pools: For many roles technology could make the employee’s location, disabilities, physical strength, ability to crunch data and/or the languages they speak irrelevant.
Technology can enhance and support neuro-diverse and differently abled individuals in unprecedented ways. For instance, Natural Language Processing can transcribe and act on spoken instructions much faster than typed instructions, which means blindness, apraxia and dyslexia are no limitations in that regard.
In fact organisations are increasingly recognising distinct advantages from physical and neuro-diversity, like the UK’s GCHQ who actively source people with dyslexia for certain “Mission Critical” roles.
That being so, which new geographies, socio-demographic groups and diverse resource pools should you explore for talent?
Could specialist agencies help you tap into new talent pools (e.g. Autistic talent from ASPIeRATIONS or Neurodiverse employees from Exceptional Individuals ) to address growing skills shortages?
c. Make the most of your experts’ time: Continuous Active Learning (CAL) enables AI to streamline the triage of massive data sets, helping prioritise cases that need expert human assessment and automating the processing of simpler cases. This is already being used to great effect, focusing experts’ time where it adds most value and producing results faster in medical, pharmaceutical, forensic, customer services and legal environments (e.g. Conduent case study: Streamlining legal experts’ document reviews on a global scale).
By restructuring your experts’ workflow, you can multiply their productivity and take away the parts of the role that are less interesting — enhancing retention, engagement, satisfaction and output of skilled people that differentiate your company.
Who could this apply to in your organisation? Do you have limited expert resources that could be enhanced by automations with CAL?
d. Well-being: How will your company health and wellbeing processes change when employees start to notify you that their body monitors have detected high stress levels and/or pre-symptom signs of emerging disease (e.g Novel optical sensors that detect disease before symptoms are visible)? This is going to raise questions and risks and HR will be in the centre of debates like the following:
i. Is monitoring for stress an ethical necessity or an intrusion? Will either of those result in a legal risk, and if so, what are you going to do to mitigate that?
ii. Will you actively invest in monitors to maximise employee health, lower medical costs and reduce downtime?
iii. Will you need a different policy in different locations? For instance, in the US the insurance company might offer lower premiums if you monitor exercise regimes versus France, where the government are more likely to insist on anonymity and/or proof that no excessive hours or pressure are forced on employees.
e. Expertise replication: If unlimited expertise can be deployed anywhere, how will it change your organisation design and cost base, your knowledge transfer and training processes, and your workforce profile?
As well as cognitive replications (robot decision-making), machines can replicate the exact movements of a skilled artisan, anywhere in the world, multiple times. 3D-printing can produce items that are very difficult to create in any other way, without import taxes. Augment those physical actions with an understanding of complex decision-making, and expertise can be replicated by machine.
There will be innovations combining human expertise and automation in almost in every sector: Surgeons teaching or operating remotely with robot support are already more effective; all the bolts on your oil platform or wind turbine could be expertly tensioned whilst halving the berths or high seas access requirements; restaurants no longer “need” chefs.
The limits to replication of expertise are your corporate imagination, the skills to implement and maintain the solutions and the organisation design that ensures you have the right skills in place — so what is your future OD plan, given the workforce changes that will be needed to compete?
6. Salutogenic work environments (ones that positively impact health, wellbeing and productivity) are increasingly an HR rather than building manager concern. Employers are considering psychological and physical health impacts as well as physical safety, with a goal of maximising productivity and engagement through overall workforce wellness.
As a minimum, organisations are legally responsible for ensuring that working conditions are safe. However, the definition of what a safe working environment means is becoming more contentious and less easily restricted to health and safety checks on physical office.
HR now need to consider work-related stress and wellbeing factors beyond traditional Heatlth and Safety rules. Covid mitigations are still an issue, hybrid and home working are now commonplace, and psychological safety and privacy concerns related to virtualisation and social media are now becoming employer tribunal issues.
The potential for very expensive tribunals and court cases is growing As Seyforth’s 2022 Annual EEOC Litigation Report says: “The COVID-19 pandemic is likely to continue to define the workplace in 2022, as businesses start the year under the shadow of a healthcare crisis that has changed the nature, location, and manner of work for many individuals. The pandemic likely will continue to inspire class actions of myriad varieties and litigation over various types” of workplace issues. As employers continue to reopen their businesses, employers are apt to see workplace class action theories expand and morph”.
This cannot be ignored by HR as a growing body of evidence makes clear that holistically combining good physical design and positive organisational psychology factors results in improved health and well-being, reduced sickness and improved productivity. Conversely poor physical and psychological environments result in stress and physical pathologies, that increasingly result in litigation as well as time off and poorer productivity.
HR leaders should be central to a holistic approach to the worker environment but that doesn’t have to be overwhelming. HR leaders just need to be aware of salutogenic design factors that provide a “Sense of Coherence” (understandable, malleable and motivational) to both the physical and psychological environment. There is a growing body of evidence and expertise to help optimise working environments and practices.
In addition, organisations that promote productivity by adhering to recognised salutogenic design standards are actively demonstrating concern for their workforce through formal certification of offices to salutogenic standards. For example, hundreds of well-known companies have already formally certificated over 3.37 billion square feet of office space as being salutogenic to WELL standards, as listed at: Certified Projects Directory.
Workspaces and management practises that are designed to promote wellbeing and engender positivity (salutogenic design) actively make worker environments more healthy, reducing absence, health costs, litigation. In addition, leaders can use a combination of digital learning, community facilities and access to support to enhance resilience, stress-management enable individual development. All of which enables people to be at their most productive as well as happier in their work — what’s not to like?.
As many businesses define their “return to office” or “hybrid” work strategies, CEOs will expect HR to pro-actively lead the future workplace discussion.
7. Economic and Digital Nomads — As the world opens back up to unrestricted travel, the flexibility to work anywhere that has been accelerating since Covid precipitated remote working and the trend will result in a significant population of expatriate workers — some of whom will not factually be “based” anywhere.
Whether that’s because their organisation has moved to cloud services to support multiple global service centres and the manager travels between them or because individuals choose to work remotely from low cost / high quality of life locations (see 21 Countries With Digital Nomad Visas) but companies will need to ensure that they aren’t jeopardising their employer status by ensuring visa compliance (Digital Nomad Visa Considerations).
The HR, mobility and compensation teams will have to ensure compliance by tracking time in tax zones, managing work / immigration visas and support and this will result in more companies integrating business traveller compliance systems and support with the wider HR IT ecosystem.
The good news is that the IT is relatively mature and, as expat mobility volumes have been suppressed by Covid, now is a great time to negotiate a deal with tech/solution suppliers, such as Equus (PinPoint Global Compliance & Workflow Management) or even large consultancies like PWC (pwc-business-traveller-solutions-mytrips) or for EY’s Mobility Pathway Business Traveler).
8. Hybrid Realities (XR). Despite appearances to the contrary, the metaverse not just a toy for next year’s holiday season gift list. The virtual environment is already a source of major HR investment and activity, with applications throughout the employee lifecycle:
· Recruitment in the metaverse (HR Magazine)
· Soft Skills and Wellbeing Training in VR,
· 3D avatars collaboration and immersive meetings (via The Verge)
· 2022 Guide to Hosting a Virtual Conference
As hardware prices come down, standards become aligned and integrating platforms are developed to enable access to multiple sources of XR Learning Content and are integrated into LXPs, HR leaders need to be considering augmenting their HR technology ecosystem to accommodate XR including:
a. integration of the metaverse with HR processes;
b. AR work task enablement / training; and
c. supporting multiple channels for inter-employee communication.
It is highly likely that the next 24 months will see XR moving from an expensive option, limited by hardware logistics, to a mainstream business and consumer communication tool.
9. Digital Twins for organisational design. Digital twin technology is becoming more widespread. According to a Deloitte study, the global market for digital twins will grow at 38% CAGR to reach $16Bn by 2023 and in September 2021, a P&S Intelligence report, predicted that the market will balloon to $184 Bn by 2030.
By creating a digital twin of the organisation and work processes, it is possible to plan for a wide range of scenarios and prepare contingencies, not least in terms of building core skills that will enable your workforce to pivot and adapt to emerging technologies.
The difference from previous contingency planning models is that those used to be “owned” by Finance and mostly modelled from an accountancy perspective whereas the digital twins model the interactive impacts of organisation, culture and behaviour, workforce and costs using real time data and actual commercial performance to drive the analysis. A digital twin puts HR front and centre in driving the organisation’s strategy and feeds into the organisation design and the skills plan.
That ability for complex contingency planning could be a differentiator given the inevitable disruptions that are occurring with increasing frequency. Many of the major consultancies are now building their digital twin practices (e.g. Digital Twin: PwC) to enable the organisational agility and decision-making that the future market leaders will deploy.
10. Dispersed Innovation: The restictions on social proximity and the rise of remote working during the pandemic has limited the number of opportunities for teams and individual experts to meet, mix and engage in joint problem-solving activities.
Innovation and cross-fertilisatuion of ideas is not a passive process and HR can be pivotal in driving the social connections, culture and knowledge development required for innovations to emerge within a dispersed workforce.
Whilst the popular idea of serendipitous “water-cooler” innovations has been shown to be a misinterpretation (of an MIT study: The Water Cooler Effect, which actually showed that social cohesion drives productivity rather than innovation), it is true that that people with connections between teams (known as “nodes” in social network analytics) tend to spark innovations that involved the work of both groups or where techniques used by one group could solve a problem faced by the other group.
The dispersal of the workforce resulting in remote working has reduced those nodes (as evidenced in detail in Michael J Arena’s Adaptive Space) and this a risk for companies that need to innovate to stay ahead (Note: that’s pretty much every company!). — so how do you drive innovation with a dispersed organisation?.
HR needs to find ways to engineer increases in “network nodes”, the links between departments and locations, to enhance creativity and innovative interactions.
Bayer have taken this as a strategic challenge and Dr. Monika Lessl observes that “Innovation actually happens in teams, in cross-functional workshops, and through the involvement of many. It is also highly contagious.” Bayer, have developed a range of digital collaboration facilities: IdeasPool & We Solve, innovation networks that include 1,000 trained innovation coaches and innovation ambassadors to drive internal innovation, but they didn’t stop there and have expanded to include suppliers, customers and start-ups in a wider “open innovation network”.
Challenge your service providers and suppliers to bring a new idea to every quarterly review, even if it’s outside their current scope. They are experts in their field and can vastly increase your “network node reach” and therefore access to innovations in their market. They’ll love the idea that you will listen to them pitch innovations and your colleagues will benefit from free consultancy based on the suppliers’ experiences.
HR can, and should, host the innovation sessions (physical and virtual) with procurement driving the suppliers and wider innovation networks to contribute. I’m sure there are other ways that HR is already acting as a catalyst to keep those sparks of innovation flying and I’d love hear about them.
What’s Next?
That’s a subjective run down of ten of the big impact items that are almost certain to hit the CHROs desk soon, if they haven’t already.
Is there anything you think is conspicuous by its absence from the list?
If so, please let me know — I will look up!.
