Business Is Not Usual: Why Are Human Capital Practices Maintaining the Status Quo?

Business Is Not Usual: Why Are Human Capital Practices Maintaining the Status Quo?

Published 27th June 2019
Vijayan Munusamy & Michael Jenkins

Head of Research & Chief Executive Officer

Published 27th June 2019

The business environment we are in is anything but “usual”. If we are not in a “BAU” period, why should our Human Capital practices be proceeding “as usual”?

If this question resonates with you, you are not alone. Only 22% of employees believe that HR practices are adapting to the changing needs of their workforce [1]. Against this backdrop, we invite you to step back and rethink your human capital practices – even the well-established ones. As a starting point, why not reflect on some of the Human Capital practices below and question their relevance for the “business is not usual” environment?

Questions to ask when the Business Is Not Usual

We will share the human capital practices we found are needed for the “business is not usual” context, in our next article in the series. For now, let’s talk about the topic of “business unusual” and what has fixated business leaders for at least a decade – Disruptive Change. Just to underscore this - terms such as VUCA have been extensively covered in the media and no HR conference goes by without covering the topic of disruptive change.

New businesses spring into existence because of the changing business environment. Start-ups start because there are opportunities provided by changes in the environment or they manage to generate successful environmental change with the products they create. It is a virtuous cycle where businesses are shaped and influenced by constant change. Regardless of the maturity level of organisations, they will have natural deaths the moment they lose their ability to exploit the changing business environment.

Hence, the question of environmental change is not new to businesses: it is the very thing that determines their existence!

What is relatively new for them, however, is the increasing rate of change – the higher speed, the magnitude, and the fluctuating nature of it.

This constant change directly impacts and shapes human capital practices and can be attributed to two main factors – disruptive technology and demographic shifts.

Factor 1: Disruptive Technology

Innovation in technology has dramatically disrupted the business environment. Functions that existed before the advent of the internet or smartphones have been significantly enhanced by such technology. This has opened the door for innovation in sectors that were previously unaffected by the information technology sector – including the HR industry.

An example of this would be how digital learning has radically disrupted the university business model of classroom education. Quick-to-adapt universities often put up much of their content online to take advantage of scale and reach and for many, this remains a reliable and consistent revenue stream. In the same way, companies that acknowledge the disruptions caused by HR technologies and move quickly to align their human capital strategies in a manner that leverages their “human capital” - are far more likely to survive the ever-changing business environment.

Factor 2: Demographic Shifts

Business environments are also significantly affected by changing demographics. Low birth rates, coupled with longer lifespans in developed countries and vice versa in less developed countries, have brought about structural changes to the consumer and labour markets. This means that businesses targeting a specific demographic, need to account for the variability in those demographics. This is not exclusive to ageing economies but also countries with high levels of migration. In such countries, people of different cultures tend to change the consumer pattern of certain goods and services. Businesses operating in those spaces need to be aware of the variability of the environment wrought by the changes in the demographic.

There are various other ways in which the business environment today can be characterised as unusual. It’s an environment that has created – and continues to generate - plenty of opportunities for new and creative approaches to managing human capital.

But certainly not by deploying the “usual” human capital practices of the past.

This article is 4 of 12 in our Human Capital Prisms series.
Previous article. Next article. 


^[1] Global Human Capital Trends Report (2015) “Leading in the new world of work”. Deloitte. Retrieved from:

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