How HR is changing
HR transformation ahead: run HR as a business
Brave new post-pandemic world
01. HR transformation ahead: run HR as a business
The HR function is transitioning from a process to an experience-oriented talent model with technology as a key enabler for improved experiences, (cost) efficiencies and personalized services. However, before planning a HR transformation, rethink your talent function through a business lens to build a sound foundation for future HR (technology) initiatives.
- Jessica Molina, Director HR Strategy & Transformation, Tata Consultancy Services
Intelligent talent management is a continuous process of attracting, developing and retaining high-quality employees. The primary purpose is to create a skilled, motivated and healthy workforce to drive business and personal growth. Technologies, like RPA, AI, and blockchain, glue all HR activities seamlessly together and contribute to value realization like personalized services through self-enablement, increased efficiency and costs benefits, and improved experiences for stakeholders. Such a digital transformation must be accompanied by a redefined talent strategy tailored to what ultimately matters to the business and people. Otherwise you risk the ‘garbage in, garbage out’ principle, and lose the value impact that a HR technology transformation can have.
Talent Model Canvas
But how to redefine your talent function successfully? A useful tool is our Talent Model Canvas. The model consists of nine building blocks each articulating an essential aspect of the business. This tool helps to map your thoughts into a plan on a page for a flexible talent function aiming to gain competitive advantage and optimized experiences for different stakeholders. The Talent Model Canvas is easy to use and gives you a good framework for summarizing your footprint and ambitions in a crisp and concise way.
It's your north star in planning your digital transformation. The model is derived from the Business Model Canvas, which is used by successful companies like Netflix, Uber, and Tik-Tok. As these companies realized, mapping your thoughts is an important first step to empowering your journey. The Talent Model Canvas enables you to focus on key aspects of a future fit dynamic talent function.
Nine building blocks
The nine building blocks of the Talent Model Canvas are built around three value realization drivers: (a) offer an attractive and engaging talent experience, (b) make the talent function digitally enabled and effective, and (c) improve talent cost ratios to (more) competitive levels. The introduction to each building block ends with a guiding question to help you get started.
1. Customer segments
An effective talent service delivery requires understanding of the customers (e.g. talents, leaders, and service partners). Customer segmentation involves grouping customers into specific target groups. These groups can be narrowed down by gender, interests, age, habits, and/or demographics. Personas are often used to understand emotional and behavioral triggers, which are further categorized into ‘journeys’. This categorization helps to define experiences to be provided via services and technological tools.
Guiding questions: what are the most important customer groups of the talent function, and what value do you offer them?
2. Talent value proposition
The talent value proposition answers why your customers buy from you. Let's take the customer group 'talent' as an example. Attracting and retaining skilled talent is the first priority for many companies. Of all the factors in the Talent Model Canvas, your value proposition answers what you have to offer to talents and what you ask in return. It's about defining key differentiators in setting your organization apart as an employer. Your talent value proposition is essentially the promise you as the employer must keep in exchange for the time and performance employees invest in the organization. It should serve different talent segments based on age, cultural background, and/or functions, but also the type of workers (view some good examples here). As we move towards a labor market scarce in terms of skills and experience, being clear about what you have to offer, not only attracts the right skills, but also helps to retain them.
Guiding question: what value do you deliver to each customer segment?
3. Communication channels
The way in which talent services are offered to cusomers, has evolved rapidly due to changing communication needs and technologies. For the talent function, perhaps the most significant step outside of its traditional role or silo is its ability to create a continuous communication flow, often summarized in the slogan: anyone, anytime, anywhere on any device. Technology is more and more used as the first channel for communication. For example, AI bots answering employee questions on benefits. There are different communication channels to use and companies may choose to work with external partners. Identifying the best ways to communicate requires finding the right balance in human/artificial interactions. Choosing the right channels gives an opportunity to partner more with corporate communications. This can be a vital step in creating the foundations of an adaptive talent function.
Guiding questions: what are the preferred communication channels to reach customer segments? How do they support the experience you want to provide?
4. Customer relationships
Transforming your talent function is about understanding the type of relationships your customers are looking for and how to get, keep and develop these. Relationships are established through different channels. Integrating these channels in the talent service delivery model is a good way to increase experiences and improve relationships. Technology facilitates creating personalized experiences through digital process flows with self-service features. At the same time, it can increase effective personal quality time with HR business partners who can focus more on their advisory role. Examples of categorizing relationships are: personal and advisory assistance, self-services, automated services, communications, co-creation and communities.
Guiding questions: what type of relationship do you wish to have with customers, when to use personalized or personal enablers, and how does this relationship support company culture?
5. Revenue streams
HR usually gets a budget to ensure the deployment of the right people at the right place at the right time. There is a metric called the Return on Investment per Employee. It’s a simple calculation that divides annual company revenue by the average number of employees. It measures how efficiently a company is unitizing its employees. Look at metrics that measure the materialization of added value. What is the investment versus the delivered output? How many days does it take before a new hire is fully up to speed to deliver on target performance? Apart from this, it’s interesting to look at correlations between metrics e.g. does a higher percentage in employee engagement lead to a higher ROI? Does technology contribute to lowering the overall costs of the talent function? How does a technology transformation impact the HR FTE/employees ratio?
Guiding question: how does your talent function bring (financial) value?
6. Key activities
The current economic challenges increasingly emphasize the need for performance management. Technology in particular has become a huge accelerator in the way that HR delivers talent experiences. The key activities are influenced by the current context of the business and economy, but also by new technology which allows to reinvent service delivery activities and the roles of talent teams, talents, leaders, and service partners. This year, 2021, will be the year to re-imagine the talent service delivery processes and to understand which technology solutions can improve the talent cycle and deliver seamless workflows across the HR domains.
Guiding questions: what are the key activities to make the talent function work, and how does a (technology) platform come into play?
7. Key resources
Think about tools, platforms, third party contracts, and internal human resources (FTE). Ultimately, a decision is needed on how much to invest in these key resources to operate a sustainable talent function. It begins with listing current resources and identifying optimizations through leveraging e.g. technology solutions or the restructuring of work.
Within the framework of new roles or skills, the talent function should be able to analyze (potential) talent behavior and connect it accurately to performance to identify present and future key resources.
Guiding question: what are the key assets needed to run a talent function that drives your ambitions?
8. Key partners
Healthy partnerships are key in making a talent function succeed. Partnerships apply to both the internal as the external environment. There are many reasons for organizations opting for partnerships. We see an increased emphasis on key partners in the area of technology and (global) talent services, including shared services and outsourcing. These can be impactful models who can accelerate strategic ambitions via the technology enabled services. One should be mindful of creating a unified talent service delivery experience across the whole value chain, from start to finish. This requires a seamless process and working agreements aligned with the talent strategy and its value drivers. Frictionless experiences should be the new normal of output from the talent service delivery model.
Guiding question: which partnerships are critical to an effective talent function?
9. Cost structure
A critical look at the costs of running the (renewed) talent function is essential: what are the costs of offering a personal versus personalized experience, and what is the payoff? But also, to what extent can the talent function, for example, be complemented with a hybrid workforce model, with both flexible professionals, and permanent contract employees? This could include business opportunities for a global business service model, outsourcing and/or shared services. COVID-19 forced companies to also take into consideration the costs of offices. It fueled the demand for new digital infrastructures as digital connected teams became part of the new way of working.
Guiding question: what are the current and future costs to operate the talent function?
02. Brave new post-pandemic world
The post-pandemic world introduces new ways of working, with many employees working from home and supported by enhanced digital solutions. The demand for roles and skills will change, requiring additional and flexible training programs.
- Girish Kumar, Senior Consultant, Tata Consultancy Services
While the pandemic mandated lockdowns followed by a global recession have created a ‘VUCA’ environment in the labor market (volatile, uncertain, complex, and ambiguous), it has also accelerated new ways of working. Jobs requiring physical proximity stand a greater chance of disruption in a post-pandemic world. Medical care, other care professions as well as on-site customer interaction jobs in banks, leisure, and travel will all continue to be impacted significantly.
Some of the work performed by frontline workers in retail, banks and post offices has already been migrated to e-commerce; a change in behavior which will likely continue in a post-pandemic world. Outdoor production and maintenance work including construction, farm labor/agriculture etc. has largely continued unimpacted by the virus. The office work arena which requires only moderate physical proximity became remote within weeks of the first lockdown, testimony to the technologies already in place at the time. To the relief of many, remote work and virtual meetings are predicted to continue, but with less intensity than at the peak time of pandemic.
Online as the default
According to a McKinsey report in August 2020, companies are planning to reduce office spaces by 30% which will in turn affect restaurants, public transport and other supporting systems. In the last year, virtual transactions like online doctor’s appointments, online banking and entertainment streaming have grown significantly. For example, in India, the medical appointment-making app, Practo grew by more than ten times between April and November 2020. This shift in digital transactions has accelerated growth in delivery and social media jobs. In the Netherlands, Takeaway.com was named the fastest growing service in the Netherlands in 2020. The food delivery company has subsequently adopted the golden growth formula ‘the winner takes all’ and continues to take significant market share in the broader European market.
New work model
Already in March last year, TCS announced its 25/25 Model for Remote Work to move 75% of its employees to work from home by 2025 . Under this model, a projected 25% of the workforce will need to be in the office to achieve 100% productivity, 25% of any project team can be distributed across geographies while only another 75% may need to be in a single location. In this endeavor, Microsoft has played an important role in driving virtual collaboration through MS Teams. MS Teams saw a huge uptick in adoption rising from 20 million users in 2019 to 115 million users by 2020. TCS for its part set up the Microsoft Business Unit to help customers accelerate their Business 4.0TM transformation journey by providing solutions around Microsoft technologies. Technology adoption will continue to grow exponentially in the post Covid-19 era.
Changing demand for roles
Blockchain, cloud computing, encryption & cyber security, robots, and drones will all form a significant part of the technology space by 2025 according to The Future of Jobs Report 2020 of the World Economic Forum. In this new technological ramp-up, organizations will adopt various new strategies such as modifying the composition of their value chain, reducing or expanding workforces in synch with technology integration, expanding the use of contractors doing task-specific work, modifying the location of operation, etc.
“Organizations will need to target and develop crucial new skills in their workforces to navigate the future”
In the Netherlands, it is predicted that there will be a spike in demand for roles like data analysts, scientists, AI/ML specialists, big data scientists, information security analysts, food scientists, food technologists, organization development specialists, IoT specialists, FinTech engineers, digital marketing specialists, and business development managers. Conversely, there will be a decreasing demand for such roles as data entry clerks, accountants, bookkeepers, payroll clerks, assembly, factory workers, business services/administration managers as well as cashiers and insurance underwriters. Organizations will also need to target and develop crucial new skills in their workforces to navigate this future.
Skills in 2025
Analytical thinking, innovation, active learning, learning strategies, complex problem solving, critical thinking, creativity, leadership, programming, emotional intelligence, negotiation, persuasion, and resilience are listed as the most prized skills of 2025 in the Netherlands, according to the WEF survey.
Businesses and policy makers are already taking steps to support additional training and education programs for workers. They are taking measures to improve the digital infrastructure as internet access is the default for the remote way of working. According to the McKinsey report, almost 20% of workers in advanced economies in rural areas lack internet connectivity.
Under the Pact for Skills established during the pandemic in the European Union, companies and public authorities must invest €7 billion to enhance skills of 0.7 million automotive workers.
Upskilling a new generation
A great many of the conversations at the World Economic Forum in Davos 2020 revolved around how to upskill a billion people successfully by 2030 against a fast-aging global population. Leadership, diversity, inclusion, and collaboration are considered as key to achieve this milestone. CEO’s with more advanced upskilling programs cite improved engagement, innovation, and agility due to fast changes in technologies.
From a societal stewardship perspective, TCS has invested heavily in STEM educations to ensure future generations are ready for this new world of work. TCS Ignite My Future in School (IMFIS) program has reached 1 million K-12 students, 20 000 students and 353 school districts in the US.
GoIT is another TCS’ flagship community engagement program that increases interest in STEM and computer science through design thinking, mobile app development, and mentorship from TCS employee volunteers. Since its inception in 2009, TCS’s flagship goIT program has reached 13,000 students in 54 cities across North America. We have also carried out similar programs in Sweden and Finland. At tertiary education level in The Netherlands, TCS is cooperating with a leading private university on the topic of the future of the workforce.
Are you ready for the future?
2020 has been a practical demonstration of the need to embrace technology and for future generations to be able to hit the ground running when they leave formal education. The question remains: are you enabling your workforce to function in a post pandemic technology-driven world, or will you be left on the hard shoulder of the information highway?