The drivers of HR disruption
The war on Talent is one of the first drivers of the HR disruption, putting the focus on recruiting and sourcing. Afterall according to research by McKinsey there will be a talent shortage of 10% by 2020. In other words, in less than two years there will be an open vacancy for every 10 members of your staff.
The Struggle for Skills is another driver of the HR disruption, with an initial focus on recruiting and selection and a second focus on L&D. According to studies of the WEF there is a skills-shift needed to follow Industry 4.0 and SAPnews confirms a skills shortage when it comes down to the Digital Transformation.
- According to research in Flanders (Belgian Region) about Strategic Competence Policies (ICO2020) published by the SERV 55.1% of companies with more than 10 employees answer sufficient to their criteria, which contains i.e. personal development plans, job rotation and/or strategic partnerships. This means a growth of 15% comparing to the survey in 2014. (in Dutch)
The Battle for Retention is a third driver of the HR disruption, because after you hired the right talents and skills, you want to keep them (engaged). This driver has an initial focus on culture and wellbeing and might be the biggest challenge of them all.:
- 15% of employees worldwide are engaged in their jobs (Gallup)
- Almost 25% of millennials have worked for 5 different employers (O.C. Tanner)
- 45% of employees reported having either changed jobs in the past 12 months or planned to do so in the next year; in 2017, 18% said they planned to switch jobs but 27% actually did (Randstad)
These statistics are from 2018 and they show that HR is not handling engagement and retention very well. With a pretty specific audience of employees entering the workforce over the upcoming years, this might become a huge problem. When you are already short by 10%, the main issue will be to keep existing employees on board.
The Consumerization of HR is the final driver of HR disruption and possibly the magic sauce. Because of the behavioural change in society, creating 24/7 consumers, the impact on HR is unavoidable and HR has to evolve if Business does not want to dry out.
When your workforce contains over 50% of Millennials who grew up being treated as a consumer, they have a different attitude and different expectations towards work. You do not want to send them back in time when they join your company, do you?
How HR Reacts
Defensive, but carefully looking further than they are used to. Trends are confirming the Disruption of HR is being handled in 3 stages:
Stage 1: Recruiting & sourcing
The blooming Recruitment Technology Industry, its investments and above all the increasing demand of recruiting solutions on a changing, more flexible and candidate oriented labour market are all signs that we are currently in Stage 1 of the HR disruption.
Today almost every HR manager, recruiter or business owner is confronted with the War on Talent and The Struggle for Skills. When you go to an HR or HR Tech event, you will probably be overwhelmed by solutions helping you to recruit the right talent.
Research from the Fosway Group at Unleash Amsterdam also confirms this trend:
- 51% of the HR respondents intends to change their recruiting / talent acquisition within the next two years
- 58% is looking for AI to adopt in their Candidate Shortlisting
- 76% is looking for AI in favor of Predictive Analytics
- 70% is looking for AI to implement Chatbots
The enterence of Big Non HR players in the HR Tech field because of this great demand in the HR market is proving that recruiting and HR Technology means big business. I.e. LinkedIn’s launch cascade of features in Talent Management and Application Tracking - clearly driven by Microsoft’s vision, Google with Google Jobs and Facebook’s interest in HR Tech .
- Also the closed (trial) RecTech Event we organize together with Federgon at the end of this month was booked within two days. The attention and traction forced us to start talking about a sequel, which is now already planned at the end of January! Recruiting is HOT!
Stage 2: Retention & engagement
Like said before, after you hired the right talents and skills, you want to keep them (engaged). So there is more than The Candidate Experience, there also is The Employee Experience.
Most organisations start tackling this problem later on the road, after they handled their recruiting and notice their new hires are leaving because of cultural differences or even feelings of discomfort.
Yet the attention for this stage is growing as HR is realizing that with the help of HR Technology and an employee-centric approach also Internal Communications plays a significant role in engaging and retaining Employees.
- 55% of the HR respondents intends to change their onboarding within the next two years
- 86% of the HR respondents says the Quality of End User Experience is a top driver to change their HR system
- 84% of the HR respondents also say Enhanced Self Service Tools are a top driver to change their HR System
“User experience is consistently the most critical driver when changing HR Tech.” - Fosway Group
Proof of this is the increased attention of investors and big HR players in feedback- and onboarding technology (internal communication from HR).
- SAP just acquired Qualtrics for an amount of 8 Billion Dollars!!
- One of our members: Spencer - a mobile workplace assistant, just raised 2.5 Million Euro’s for scaling up their activities
- Ultimate, Workday and Slack-acquisitions focus on productivity AND Employee Experience, just as the acquisition of Qualtrics by SAP has the same focus (according to HR Thought Leader Josh Bersin).
Stage 3: Learning & development
Logically this stage should be the first step to cover the skills gap, yet evolution decides organisations like to recruit their way out of that one.. Not realising the potential that is shining under the surface. Your own employees and their passions, their purpose and their goals. If you can help them develop themselves, the return of investment to your organisation will be positive.
It looks like HR also is realizing that recruiting for skills is not enough and is prospecting other solutions to improve their talent management and L&D.
- 48% of the HR respondents from the research done by the Fosway Group plans on changing their Learning & Development in the next two years
- One of our members, MobieTrain - a mobile (micro)learning platform, won the prestigious Startup Battles at Unleash
- HR Thought Leader Josh Bersin’s article on A new Paradigm for Corporates, handled Learning in the flow of Work.
Bringing it all together
Why not revolve, do all three at once and take the lead in the change HR is going through? By strategicly tackling all problems at once and not in three stages, a more efficiënt and more Employee-centric solution there can be build. Not saying everything has to come from one and the same provider, on the contrary; there are enough providers out there to help you tackle each challenge. It is up to HR to create an entire Employee LifeCycle plan, not only focussing on the candidate experience but on the entire Employee Experience and the needs of those Employees.