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Embracing HR 4.0 Amidst Global Disruptions

Published date2 June 2023
Reading time7 min read
  • People Analytics
  • Culture
  • Industry 4.0
  • Analytics
  • HR 4.0
  • Generative AI
  • AI
  • Skills
  • Recruitment
  • Workforce planning

HR 4.0

Uncharted Waters in the Global Landscape

Our generation is currently navigating through the most disruptive and unpredictable era in history, with each moment unveiling a new aspect of global chaos. The ongoing Russia-Ukraine war and the tussle between USA and China for global dominance reflect an unstable political climate. Economic institutions like Credit Suisse and Silicon Valley Bank have faced unexpected failure, demonstrating how even the mightiest institutions can crumble.

Social inequality continues to intensify, stirring global unrest manifested in the form of widespread union strikes. Alongside this, global inflation and interest rate hikes are creating economic uncertainty. Socially, a backlash is emerging in the form of 'woke' and cancel culture, reflecting deep-seated societal tensions.

The Great Technological Shift: Industry 4.0

Concurrently, technology is changing the game, altering the skills required of workers. Generative AI, a disruptive technology, has been unleashed on the world, much like how the transition from Industry 2.0 to Industry 3.0 saw the rise of the hairdressing profession as a side effect of increased disposable incomes.

As we enter the era of Industry 4.0, we should anticipate similar unintended consequences. Work is shifting towards requiring high cognitive workloads, with repetitive tasks getting automated. Amidst this upheaval, there are skills that remain future-proof, including personal learning, problem-solving, and collaboration.

Future-Proof Skills for the New Era

Considering the rapid changes in technical skills, it's time for individuals to focus on 'forever skills.' These include:

  1. Creativity Skills: Agility, problem-solving, insight conversion.
  2. Communication Skills: Team building, influence, trust, translation.
  3. Control Skills: Self-control, order, resource management, implementation.

Moreover, emotional intelligence (EI), the capacity to be aware of and control emotions, is becoming an essential aspect beyond cognitive skills. For instance, four of the top ten skills required by 2025 are based on EI.

Transitioning to HR 4.0

Human resources, traditionally perceived as a softer business function, often relies on limited data or evidence for decision-making, resulting in a prevalent compliance mindset. However, we're now on the brink of HR 4.0, which involves adopting a technology stack focused on simplicity, efficiency, and automation.

In HR 4.0, UX/UI becomes critical for adoption, while people analytics using data, technology, and analytics are essential to make informed people-related decisions. These innovations are paving the way for the future of recruitment, talent management, and workforce planning.

Realising the Promise of HR 4.0

With HR 4.0, traditional recruitment methods are being replaced by AI, allowing us to overcome biases in hiring decisions and consider candidates who may not shine on paper but have the potential to excel in their roles.

By employing people analytics in HR, we can also connect employee outcomes to business outcomes, evaluate the impact of employee well-being on the company, and engage in strategic workforce planning.

HR 4.0 also brings measurable benefits, such as improved employee outcomes across their lifecycle, HR having a rightful place in executive meetings, quantifiable business benefits like improved Employee Lifetime Value (ELTV), and unlocking funding for additional HR

Use Cases

The Future of Recruitment

Traditional recruitment methods are becoming outdated, often disregarding talented individuals who might not shine on paper. In fact, 75% of employers admit to hiring the wrong person for a role, an expensive misstep. AI is revolutionising recruitment, debunking prevalent myths about AI bias. The bias is not inherent to the algorithm but resides in the data used for training, such as resumes, social profiles, past hires, and performance records.

When it comes to culture fit, it is captured within attributes. After all, most organisations share similar values. The challenge is to identify the most important ones. Moreover, essential metrics like headcount time-to-hire and candidate time-to-hire should be closely tracked to streamline the hiring process.

Connecting Employee Outcomes to Business Outcomes

Through HR 4.0, we can now comprehend the correlation between factors like manufacturing defects and customer satisfaction. In-depth data analysis reveals that these problems might stem from specific training requirements rather than the employees themselves.

Furthermore, well-being, encompassing mental, physical, emotional, financial, and social aspects, can be linked to business outcomes. However, designing a comprehensive measurement framework necessitates considerable thought and planning.

Workforce Planning

Workforce planning should not just focus on the short-term but should also anticipate the shape of the workforce in 2-5 years' time. As we adopt technologies like Generative AI, the workforce structure will inevitably shift, possibly requiring engineers with language model expertise or a greater emphasis on cognitive skills. Skills, not job titles, should be the currency for matching people to roles.

For instance, custom algorithms could match caregivers to children based on skills and needs. Unfortunately, current solutions don't adequately support short-term operational and long-term strategic workforce planning simultaneously. This requires a custom-built solution.

Team Structure Post M&A

Organisational Network Analysis (ONA), an analysis of employee interaction data, can provide valuable insights following a merger or acquisition. Using ONA, teams working on similar patent technologies can be merged to optimise efficiency and productivity.

The Benefits

Embracing HR 4.0 brings about improved employee outcomes across their entire lifecycle. HR can now have a seat at the executive table, contributing equally alongside finance and operations. There are quantifiable benefits to the business, such as improving the Employee Lifetime Value (ELTV) – HR's equivalent of the Customer Lifetime Value (CLTV) in Finance.

HR 4.0 allows for the demonstration of ROI from people initiatives, unlocking funding for further HR initiatives. It enables HR teams to focus on more strategic and creative work, replacing repetitive tasks with automated processes. Finally, it fosters more mature, productive business conversations, moving away from heuristics and gut feel.

Key Requirements and Skills

Leadership is critical for the successful implementation of HR 4.0. HR leaders need to take ownership and exhibit curiosity, while also securing the buy-in from the CEO, CFO, CTO, and other executive team members. The foundation needs to be set with the right data infrastructure and platforms, governance across security, privacy and ethics, training, change management, and the right HR team.

Data literacy skills are a must. Professionals need to unlearn outdated practices, adapt existing workflow processes, and relearn the new ways of working. Communication becomes even more vital, as it's essential to position AI as augmented intelligence, not a job replacer. It’s equally important to build a culture of inclusion and belonging. Augment any HR skills gaps with internal talent marketplace, specialist experts, gig talent marketplace or external consultants.

How to Get Started

Embarking on the transformative journey to HR 4.0 requires a proactive and strategic approach. First and foremost, HR teams need to extend their horizons beyond traditional HR confines and actively engage with various business units to understand their unique challenges and needs. This involves falling in love with the problem, investigating and comprehending the root causes, and formulating effective solutions.

One method to kickstart this process involves delivering short-term pilot projects that demonstrate substantial return on investment (ROI). Such initiatives not only unlock the confidence necessary for wider adoption of HR 4.0 practices but also secure funding for subsequent ventures.

To expedite this transformation, HR teams can consider adopting People Analytics Software as a Service (SaaS) platforms such as Culturate, which offer robust tools for informed decision-making.

However, it's crucial to note that this transformation isn't an overnight process—it might span several years. Even after the technology has been implemented, the journey continues as change management, arguably one of the most challenging aspects, can take up to three times longer than the initial tech delivery.

How can Culturate help?

Culturate is a new SaaS based platform which automates People Analytics for organisations. It streamlines data sources from HR, communication, productivity and financial systems.

Culturate has a range of features that allows organisations to realise the benefits of People Analytics.

  • Pre-prepared reports - Analysis of the most valuable commercial use cases based on industry experience and feedback.
  • Intuitive dashboard - Our software presents the data in a user-friendly interface.
  • Integrations - A broad range of systems across HR (HRIS, ATS, payroll), communication (calendar, messaging, emails), productivity (CRM, ticketing) and financial data can be captured.
  • Artificial intelligence - Leverages advanced data science and predictive algorithms to identify and predict employee turnover.
  • Security by design - ISO 27001 certified which is industry best practise.
  • Privacy by design - Has employee privacy at the core of its design so that personal data is anonymised and analysis is aggregated.