The impact of external forces will be felt on organizational leadership, on company structures, on corporate culture, and Human Resources practices. Actually, the way work is done is already transforming itself. The strategic role of the Management of People is changing towards the creation of a humanistic culture.
Author: Rita Cunha | Reading time: 3 minutes
Managing People in the next five years will be marked by three inevitable factors:
Technology, particularly the Cloud technology and Artificial Intelligence (AI);
Increased globalization, namely from the emerging markets;
Demographic changes, especially related with the ageing of the population in the Western economies and the generation Y (and already gen Z) workforce.
The impact of these external forces will be felt on organizational leadership (value-based and transparent), on company structures (project-centered, virtual teams, cross-boundary joint ventures), on corporate culture (focus on collaboration, relationships with customers, employees and contractors) and Human Resources practices (particularly on staffing, talent development and flexible working).
Actually, the way work is done is already transforming itself:
technology increases productivity but also leads to the replacement of low and medium-skilled jobs by robots;
globalization means the labor market must now be considered at planet scale;
the ageing of the population and the Millennial generation (Gen Y) lead to changes in career management, the drivers of work engagement, the design of work and flexible working conditions, for both men and women.
The HR departments are starting to become familiar with the so-called e-HRM, basically the application of information technology (IT) for networking and supporting employees, managers and HR department, in their shared performance of HRM functions. Some companies may use technology merely for Operational goals, i.e., the automation of administrative HR tasks; more sophisticated ones are using technology for Relational purposes, allowing easy connection of line managers and employees to increase collaboration and service level quality, whereas others may use it in a more holistic way, the Transformational/strategic e-HRM, enabling the creation of corporate value through recruitment, development, performance management and compensation, via IT.
Being in their infancy, some practices still raise concerns, namely ethical ones, such as the search on job candidates’ background through cybervetting, i.e., covertly gathering information from informal, non-institutional online sources via social media and search engines, to help decision making. On the other hand, some validity challenges can be added, e.g. the predictive capacity of online interviews by avatars, or the replacement of traditional performance evaluations by real-time online feedback systems.
The global labor market is an opportunity for multinational companies (or internationalizing ones), but also a challenge for domestic companies, because of the increased competition in the war for talent. Diversity management to create an inclusive culture is a priority in the organizational agenda, reinforced by the demographic changes. Companies with people from diverse cultural backgrounds, in terms of nationality, gender, age, religion, sexual orientation, etc., need to embrace the differences in order to become more innovative and effective.
The strategic role of the Management of People, therefore, is changing towards the creation of a humanistic culture — using technology to attract, develop, retain and engage people; the support of line and top managers to develop a culture of innovation; the guarantee of a reputation of integrity, where employees feel respected and valued; the design of a trusting and supportive internal environment of meaningfulness, where people feel they can make a difference for a compelling future.
As in any period of profound change, this is an opportunity to seize this new ecosystem and transform the HR function to gain relevance, and make a real impact.