This article talks about the future of Human Resource Management. It is about a new dynamic in the world of work, the Employee Experience, New Work, High Impact Teams and the new influence of a CHRO — Chief Human Resources Officer relating to the competitiveness of your company.
In case you are interested in digital transformation, you will find the impact and opportunities in different departments and areas of a company in our series "Digitalisation 2021".
The way I see it, Covid was a huge, year-long Super Bowl ad about how much companies need human resources.
Those are the words of Allan Jones, CEO of Bambee, a Los Angeles-based human resources firm. Also, a way of looking at the pandemic. But the circumstances prove him right. Virtually overnight, the way we work and where we work has transformed. This has ensured a different approach to finding, qualifying and hiring new staff and talent.
A key factor in maintaining and maximising this great new flexibility into the future depends on the new human resource management. Roberto Di Bernardini, Chief Talent Officer at Banco Santander in Spain, puts it this way:
There has never been a better time to be in HR. Issues such as flexible working, reskilling and upskilling, and digital transformation were important before—now, they are critical.
Dynamic work. Dynamic talent.
All of us have witnessed the relocation of our jobs to other places or directly to our homes, into home offices. At first hand, we have seen how resources have been dynamically redistributed and how digitalisation and, in the process, automation have received a significant boost. A more flexible and responsive model emerged, combining increased connectivity, automation and lower transaction costs.
This has made it clear that the principles of the organisation of the future have been heralded, and there is no going back. Existing basic principles of a company have to be reconsidered. These cannot keep up with the new flexibility and innovative capacity of this newly created working environment.
In this context, dynamic work goes beyond home office and remote work. It is about integrating a more agile and flexible work style into our culture. This includes flexible working hours and locations. Furthermore, it is also about rethinking how and where we recruit as a company, how we engage our employees globally in the company and how they can live the experience.
Increasing flexibility and allowing employees to work and live where it makes the most sense for them should lead to greater engagement, satisfaction and productivity. It should also enable companies to hire talent from a much broader and more diverse pool and thus achieve a greater diversity of skills. Dynamic talent, so to speak.
Companies become people-centric and the importance of human resource management is increasing. Research by McKinsey has shown that sustainable companies have three characteristics: They know who they are and what they stand for — purpose. They are focused on speed and simplicity — value. They grow through learning and innovation — culture.
The HR department can drive these areas forward by supporting employees in these and other areas. It educates about the purpose, values, and culture of a company and supports employees in this context. And hire new candidates who fit into this environment.
Human Resources and the Employee Experience
Now that businesses have unequivocally understood that their employees are the most valuable asset of any organisation, it is important to retain them. That is where the Employee Experience (EE) comes in. That means the overall experience for employees in the workplace and in the company.
While customer experience (CX) has long been the top priority for many companies, more and more organisations are recognising the positive interplay between employee experience and customer experience (see Figure 2). You could also say that employee experience is the new customer experience.
It is the satisfied and motivated employees who push forward with vigour and innovation. Because they have a genuine interest in improving the world and the everyday lives of their customers with the company, as they feel a deep sense of appreciation. In the same way, these employees represent their company, reflecting their satisfaction and positive experience, and act as great brand ambassadors. So don't neglect your employees and show your appreciation. After all, what better way to ensure the company's success than by creating a motivating and promising working environment?
And that' s exactly where modern human resource management comes in. The HR department is the intersection and point of contact for all employees, executives, and management. This department has developed from being a purely administrative department into a strategic component. It is no longer simply a matter of carrying out arbitrary tasks. It is about strong involvement in all important issues.
Reality so far shows that HR is only seen as an internal service provider. Moreover, there is a perception that HR only costs money, but does not add any monetary value. However, this mindset will radically change in the coming years due to the pivotal position of this department to the entire workforce as well as new talent.
As a result, the HR model will also change. New approaches include value-based HR management, a holacracy approach, a divisional structure of HR or the employee engagement approach mentioned above. Roberto Di Bernardini is right — there has never been a better and more exciting time for HR.
Beyond Efficiency — New Work
The Employee Experience is completely in line with the fundamental change of the new world of work: New Work. In order to improve employee satisfaction for optimal performance on their part, the New Work model is essentially about freedom, flexibility, self-determination, and community. In this context, New Work goes far beyond flexible working hours and workplaces, as we discussed earlier in the context of dynamic working. It is also about things like new leadership, corporate culture, innovation, learning, networking, collaboration, project organisation and flat hierarchies.
Focusing on the individual ensures that the company's own creative power of its employees is promoted. This is the key to creativity, sustainability, innovation, and sustainability. Companies need to experiment in the areas of leadership (new leadership), participation and culture in order to find their path for optimal and sustainable organisational development. A standard template does not exist here.
New Work vs. Work 4.0
New Work is often mentioned in the context of Work 4.0. However, it is important to distinguish between these two. The term Work 4.0 arose in the context of the fourth industrial revolution. It encompasses the process of change in the world of work in the digital age and solutions for managing the digital transformation.
Personnel management? Personnel development!
New Work is also fundamentally changing the demands placed on HR work. And that goes beyond the changed framework conditions. HR managers have the opportunity to actively shape this change. As we have already written, the importance of the HR department is increasing and developing into that of the strategic organisation development.
Furthermore, there is the exciting challenge of unlocking the potential of the employees. And it doesn't stop there. Employer branding, cultural fit, candidate journey management — these are all new areas for the HR department to shape the personnel future of companies in a sustainable and long-lasting way.
And not to forget, the decisive role in change management. HR managers actively accompany employees and managers into the new, flexible and digital working environment of New Work. They too are therefore “agents of change”.
HIT – High Impact Teams
A particularly noteworthy area of the new disruptive world of work and New Work are the so-called High Impact Teams or High Performance Teams. These teams achieve peak performance and superior quality benchmarks at work.
Again, HR plays the key role in promoting employee-centric functions by building competencies through training, or rewarding outstanding results and performance. And ultimately, of course, in recruiting the right talent to complete such teams.
Research has shown that organisations benefit from the diversity of their workforce in terms of productivity, as well as building a high-performing culture. Organisations thrive by harnessing the benefits of employee diversity. The management of this diversity is the responsibility of HR. This is precisely what Diversity Management is all about.
It is also about enhancing the capabilities of the workforce and continuing to empower them to make innovative contributions. With the right composition and mix of competencies, HR plays its part in linking High Impact Teams. If the concept of High Impact Teams is new to you, here is a checklist as a quick overview of what it is all about.
CHRO – Chief Human Resource Officer
A chief human resources officer is not a common occurrence in companies. But the historic events of 2020 have put the CHRO at the centre of management. And that means a big change. Because in the past, it was hard for HR to be heard of by management.
HR matters were of a purely administrative nature, primarily causing costs and not contributing to profit. This idea is now a thing of the past. Human resources moves into management at equal footing.
Modern CHROs manage comprehensive cultural and corporate transformations. They prioritise environmental, social and governance (ESG) issues while serving on the corporate board. As we further learn from this article, the complexity of HR is increasing. Not only in terms of the pandemic, but also in terms of societal and environmental impacts that our world can expect in the future. Therefore, it remains a challenge to accurately define the role of a CHRO.
Thanks to the new strategic importance of HR, however, the position of the CHRO has also been strengthened to act decisively in organisational development. Especially when it comes to the employee experience and selecting the right talent.
We can only echo the words of Roberto Di Bernardini - there has never been a better time for HR work. With the opportunities opened up by digital transformation, workers have unprecedented flexibility and a multitude of ways to adapt their work to their lifestyles, opening up a massive space for innovation through motivation to flourish. And we are just at the beginning.
It is a matter of seizing the potential in human resource management. This means discovering the appropriate talents, as well as promoting and retaining the talents of one's own workforce as a company. Employee experience is becoming the new benchmark for companies. And the strengthened position of the CHRO plus the new prioritisation of the HR department paves the way to the “brave new world of work”.
Embrace New Work, High Impact Teams and Employee Experience.
It's guaranteed to pay off.