Five Key Trends in the Changing Landscape of Human Capital Management
The human capital landscape is not only a moving target, but a fast one. As the global market continues to shift, so should your human capital strategies and plans. As we adapt for a tightening talent marketplace, solve skills gap and labor shortage problems, and work to become more productive as HR professionals and company leaders, it’s imperative that we continuously assess current methodologies to look for areas of improvement. Companies that will flourish in this market will be innovative and nimble, regardless of size.
Human capital trends start with trust
Across the globe, people trust business more than they trust government. The 2018 Edelman Trust Barometer reports that people worldwide place 52 percent trust in business “to do what is right,” versus just 43 percent in government. In the United States, trust in government has hit a four-year low, at just 33 percent. There is a widespread perception that political systems are growing more polarized and less effective at meeting social challenges. Citizens are looking to businesses to fill the void on critical issues such as income inequality, health care, diversity, and cybersecurity to help bring more equality and fairness to the modern world.
Employee expectation is placing immense pressure on companies while simultaneously creating opportunities. Organizations that engage with people and demonstrate that they are worthy of trust are burnishing their reputation, winning allies, and influencing or supplanting traditional public policy mechanisms.
Given the new employee relationship economy, there are five key trends every leader should know to successfully navigate the changing landscape of human capital.
Human capital trend #1: Using agile methodologies outside of tech teams
Agile process is a common practice in IT with the Harvard Business Review reporting over 80 percent of companies adopting them. Agile methodologies are typically used to build things in an iterative or incremental way. The idea is to build a small thing and try to figure out just enough to start moving forward and iterating. This can be used in many HR processes, including employee performance reviews, recruiting processes, technology implementations, and planning for events like team meetings or open houses for candidates.
In this fast-paced business world, talent is very critical to the profitability and functionality of an organization. Agile processes can be applied to help HR and recruiting teams organize, anticipate, and adapt to changes in the market, including the small markets and company locations where small nuances significantly impact a single facility’s profitability and success.
Human capital trend #2: Executive collaboration
Companies must work quickly. Senior leaders need to lead by example to expect their teams to be collaborative. Building relationships is key to collaboration, and it challenges business leaders to listen closely to employees, act transparently with information, break down silos, and build trust, credibility, and consistency through their actions. Doing so is critical to maintaining an organization’s employer brand and to attracting, retaining, and engaging key employees.
Human capital trend #3: HR metrics to move HR from cost center to revenue center.
In a podcast interview with Workology earlier this year, Natalie McCullough, General Manager of Workplace Analytics with Microsoft, said that companies have historically invested in measuring just about everything in their business, including key operational components. They have a lot of data about customers. They have a lot of information and systems around factory operations, R&D, cash flow, supply chain, real estate utilization, and so on. However, people decisions have not been very rigorous from a data perspective.
People analytics takes all the rigor of data analytics, prediction and research, and applies it to what everybody says is their most important asset: their people. McCullough said it’s this use of data about human behavior, relationships and traits that allows organizations to make strategic people and human capital decisions. She believes we are moving the people space into a place where many other parts of the business have been for a while, which is around true data-driven decision making.
People analytics, metrics and data can be the force that drives cultural, strategic, and process decisions for your organization, moving HR from cost center to revenue center.
Human capital trend #4: Social enterprise
Based on Deloitte’s 2018 global survey of more than 11,000 business and HR leaders, as well as interviews with executives from some of today’s leading organizations, it’s clear that a fundamental change is underway. Organizations are no longer assessed based only on traditional metrics such as financial performance, or even the quality of their products or services. Rather, organizations today are increasingly judged on the basis of their relationships with their workers, their customers, and their communities, as well as their impact on society at large—transforming them from business enterprises into social enterprises.
Companies need to get more involved in their community in a way that helps shape and change the world. Companies are being measured beyond financial performance, but also how they help communities and society. This is an expectation of millennials and an important part of effective retention and employer brand strategies that attract and retain our workers.
Human capital trend # 5: Digital divide
Those who don’t embrace technology are being left behind - it is up to companies to help train, teach and engage all workers by providing them the tools and gentle nudges to embrace technology. This is important in workplace collaboration, as well as technology adoption. As organizations add new tech and tools to existing workforce technology, we need to anticipate the training and support all employees will need in order to be successful. This could be as simple as a course on using LinkedIn, or training on virtual reality for employees prior to launching a VR training program in a division or across the company.
In Randstad Sourceright’s 2018 Talent Trends report, 68 percent of human capital and C-suite leaders said they believe technology has made recruiting simpler and more efficient, while 70 percent say it’s helped to make smarter hiring decisions.
According to research conducted by INSEAD, only 40 percent of members of Generations X, Y and Z around the world believe their employers have adequate digital competencies. While 30 percent believe virtual reality (VR) will revolutionize their work in the future, only 3 percent have access to it in the workplace. The study’s researchers suggest that, while companies focused on creating a simplified experience for front-end customers, they often neglect to do so in the back office.
As your company accelerates its digital strategy, does it include innovations aimed at simplifying and accelerating technology adoption? Do you have a strategy in place to make HR portals mobile-friendly? Can your workers easily learn how to use new tools so they can be productive? If your company hasn’t started to take on these initiatives, now is the time make them a priority.
Human capital trends require a shift in HR thinking
Finally, it’s important to acknowledge that adoption of these trends could be a huge shift for your company, depending on what current strategies you have in place and how long they’ve been in effect. Change requires a shift in behavior, but also a change in thinking. A combination of culture, leadership, and incentives must come together for effective collaboration and productivity to thrive. To do this, HR organizations must work with executives in every department to bring their expertise in team management, goal-setting, and employee development to the entire workforce and the company at large.
Jessica Miller-Merrell is a workplace change agent and author focused on human resources and talent acquisition. She lives in Austin, TX and is recognized by Forbes as a top 50 social media influencer. She's the founder of Workology.