The New Workforce and the Need for Human Capital Transformation
In the competitive and challenging talent economy of today, how does one maximise employee engagement and manage organisational growth with a new and evolving workforce?
Oracle OpenWorld Asia on 26-27 March in Singapore was an enormous event with 7,000+ attendees and hundreds of concurrent sessions on different topics: technology, robotics, AI, women in leadership, human capital management, talent insights, cloud technology, the Internet of Things… there was something for everyone. I was particularly interested in the conversations around the new workforce and human capital development and was not disappointed with the discussions brought up by the speakers at the event.
We have all observed the fascinating speed of disruption that fast-changing technology brings. The world was shaken when the internet and information technologies were introduced in the 1990s, and now again with the cloud, blockchain, AI and automation. What a time to be alive and witness such changes happen! Alison Sibree, SVP HR of JAPAC at Oracle, mentioned the examples of companies who underestimated the speed of disruption such as Nokia, Blockbuster, and Kodak. Many of us still remember when they used to be huge names in the economy, and nobody had ever thought that their growth would decline so quickly and so dramatically.
Only 12% of Fortune 500 companies from 1955 remain on the list today[i], and the same is true for less than half (43%) of the list from 1995[ii].
The market is brutal, technology is brutal, and they don’t discriminate. Those who are not prepared will drop out of the game.
In the past five years, the millennial workforce has been the focus of many workforce studies and debates with quite a bit of anxiety. The overall discussion tends to identify the generational difference between millennials and other generations and how to deal with a more demanding, purpose-driven, ambitious segment of the workforce. A report by PwC estimates that millennials will account for about 50% of the workforce by 2020[iii]. Even though millennials have different demands and needs for their jobs, they also want the same things as other generations, such as having great leaders, career growth and job satisfaction[iv].
While being concerned about the growing millennials workforce, business leaders often forget that customers are also increasingly comprised of millennials as well.
Together with global business transformation, human capital management has rapidly evolved in the last decade. Many administrative, process-focused tasks such as payroll and recruitment are now outsourced, which leaves more resources for in-house HR divisions to focus on human development, organisational skill sets, and cultural development. Improving the employee experience, especially around skills and retention, has been on the agenda of the new generation of HR professionals.
Employee engagement is at the top of HR’s priority list, especially in the talent economy where it is so competitive for companies to find the right talent.
In Singapore, where the unemployment rate is only 2.2%[v], top talent is snatched up in a blink of an eye. Many studies have pointed out that higher employee engagement means higher retention, and as a result, higher organisational growth[vi][vii].
There are four aspects where human capital management should transform to keep up with the new workforce.
- First, we need to revamp learning and development. The new workforce demands upskilling and reskilling, and training is moving from being corporate-driven to employee-driven.
- Second, HR needs to use data and analytics in talent retention and recruitment. Data is the language of business nowadays. Feon Ang (VP, Talent Solutions and Learning Solutions at LinkedIn APAC) notes that in the past 5 years, Asia has seen a 70% increase in HR analytics, which she calls “talent intelligence”. So if your HR division is not yet on board, your organisation may take the heat in the competitive talent market.
- Third, the HR function needs a major make-over in performance management. Employees need faster and more frequent feedback, not just once a year. They also want to have a clear path of career growth with the organisation.
- And lastly, we need to enhance employees’ digital experience. Employees want to work for companies that are technologically savvy; it means that these companies are less likely to lose out on the global trend of digitalisation. In the past 10 years, we have seen tech-focused companies dominating the Fortune 500 list[viii].
It is undeniable that a very challenging but exciting talent economy is ahead for those who are in the human capital management industry. Transformation is already happening and will continue to happen. Until now, we have never had a workforce that is so purpose-driven, agile, and willing to learn. Is your organisation ready to embrace the new workforce and grow with it?
Comments from Alison Sibree SVP HR of JAPAC at Oracle, and Feon Ang VP, Talent Solutions and Learning Solutions at LinkedIn APAC - at the Oracle OpenWorld Asia Event in Singapore 26-27 March 2019.
[i] AEI. Fortune 500 Firms 1955 v. 2016. (2016, December 13). Retrieved March 28, 2019
[ii] Murray, Alan. Five Things You Didn’t Know About the Fortune 500. Retrieved March 28, 2019
[iii] PwC. (2011). Millennials at work
[iv] World Economic Forum. (2019). Panel discussion on “Job Creation Strategy”, Davos 2019.
[v] Manpower Research and Statistics Department. (2018). Singapore Yearbook of Manpower Statistics. Singapore Ministry of Manpower.
[vi] Tower Watson. (2012). The Global Workforce Study: Engagement at Risk: Driving Strong Performance in a Volatile Global Environment.
[vii] O.C Tanner Institute. (2018). The Global Culture Report.
[viii] Tech firms dominate Fortune 500 list. (n.d.). Retrieved April 1, 2019