Workforce Transformation is a strategic challenge for Human Resources Work. The Covid-19 pandemic has further accelerated this. In my previous article, I discussed two different approaches and made recommendations. There was considerable positive feedback in return. And a very old question arose: Is this the responsibility of HR? And: Do we have the relevant competencies? I want to evaluate those questions further in this article. As always with practical insights.
What requires Strategic Workforce Transformation of Human Resources?
It is nothing new: Workforce Transformation requires a look into the future, it makes assumptions for future competencies, roles, processes or even business models and draws them into the present to be able to plan. One looks at technologies and trends, makes scenarios and deductions, and develops measures.
A training manager has always paid attention to future competencies for his trainees. For instance, the rollout of CNC machines in the 90s was a quantum leap in digitalization of production. The building of a new production site in China had to be planned and went through. HR managed all workforce related tasks somehow well!
This time it is different …
Developments are faster and complexity is higher: Digital technologies (Artificial Intelligence, Blockchain, 3D/AR, mobile applications, etc.) reach deeper and they change business models of many lines of business simultaneously. They tackle higher qualified tasks now. A global competition regarding platforms and standards is raging. At the same time, mobile applications enable the divestment from sites, secured labor markets. Other societal trends like the demographic change, value change towards diversity or the already started restructuring of the economic system towards decarbonization amplify, enable and accelerate all those developments and are mutually dependent. For us Europeans the marginalization of many lines of business due to better/faster Asian producers and the increasing distance to American Tech-Giants is an added topic.
Those changes do not take place in slow, visible waves anymore, to which one can react when they have arrived.They are so fast that many of our established operational structures cannot react quick enough. Our labor and training markets are complex systems and thus slow. In the end, the only thing left to do is often to downsize or withdraw from the business or outsource the respective activity or employees.
One must find a way to predict those trends and their effects on competence requirements, roles, processes or whole businesses to be able to initiate measures early enough. An HR intuition’ or having a ‘nose’ for these things is no longer enough. Workforce Transformation has to become a core tool of HR that partly requires new methodological and strategic competencies. But those can be learned.
What new competencies does HR need?
Strategic Workforce Transformation is in the end nothing different to strategy work. Millions of consultants and business strategists do it. The implementation of insights in a People- and HR-Strategy is another thing. And then there is change management of course to ensure that the transformation is actually manifested.
- Awareness: As easy as it is to postulate here that no stone will be left unturned in many companies in the next 10 years, it is difficult to accept that. How do you create a sense of urgency? How does the business react when the HR manager, of all people, comes and talks about digitalization – and even demands resources for such a project. This positioning work in the management team needs good preparation and a good storyline.
- Project Approach: In the previous two articles, I introduced two fundamentally different project approaches. Good projects integrate qualitative and quantitative tools. Is it about an entire production process, a business model, or just a functional group for now? WFT is always a project and needs a project management method, which usually always includes agile and classic elements.
- Resources: Workforce Transformation is not just a workshop ‘on the side’. If you want to do it systematically, it needs resources in HR, the management and the specialist field. Possibly it needs consultants as well. Most quantitative resources require a tool and heaps of processed HR data. Here we talk about classic project-resources-planning (in agile approaches as well!) . And then, of course, a proper Kick-off.
- Trend Analysis: What are the relevant trends that will impact our business? As already said, many trends overlap. Here, one has to do some research and one has to be able to think and work in scenarios. That is an extremely creative process that is strongly connected to agile tools and Design Thinking. Further, it is a distillation process to derive decisive drivers and effective variables – also in order to be able to feed an IT tool with them later in a meaningful way. Strategists learn to make speculations to quantitative facts – Or at least to argue in an evidence-based manner. One can learn a lot from that.
- Impact Analysis: The aim is always to forecast how changes in technologies, markets, etc. will affect one’s own roles, processes, or businesses. In the end, HR employees always think in terms of roles and competencies. And that is exactly where you must go in the end. This is one level deeper than business strategists usually think. This translation work is, in my opinion, the very original contribution of HR. In the end, everything must be reduced to roles, skills and the necessary numbers behind them. With or without a tool.
- People Strategy: It has never made more sense to differentiate between a people and an HR strategy. More things flow into a people strategy than ‘just’ trend analyzes and their impact on jobs. Rather, a business may have plans for growth, strategy changes, regional development plans, new products regardless of this. To get all of this together into a meaningful people strategy that is coordinated with the business strategy for a period of 3-7 years – plus the commitment of top management. That’s the challenge.
- HR Strategy: At Breitenstein, we always differentiate between the people strategy and the HR strategy. A people strategy encompasses all aspects that concern the use of people in an organization. An HR strategy is a functional strategy that essentially supports the people strategy. But HR is not the only function that a people strategy has to implement – it is all. HR provides the tools for this. Workforce Transformation needs this distinction to make it clear that it is not a functional task of personnel organization but it must always be an essential part of the business strategy. And precisely because of this, HR can be strategically repositioned and the necessary resources can be more plausibly demanded than in the past.
- Controlling: It has never been as important as it is today. Once you have arrived at a quantitative planning (no matter how rudimentary it is with many uncertain parameters), you are able to define KPIs as controlling parameters. Far above the level of headcount and personnel costs. Giving up this strategic lead would be criminal. Especially since such trend-induced forecasts are volatile and you can only avoid falsification if you have several parameters to keep track of things. Then you can also sharpen the WTP in good time.
- Change management: As shown in the last article, one of the most important consequences of WFT is the pull effect of such scenarios as people understand them, predict their own future, and walk on it. Therefore, change management is a very important lever to present the (plausible and quantified) scenarios and measures. Why are we doing this reorganization now? Why is this seminar so important? Why do we need a new training course or a new trainee program? Here you must be able to sell the plans and scenarios properly. Strategic storytelling and a communication strategy must be developed.
- Scaling and iteration: It is very likely that you will start small with such a process – for example with a function family. You can see successes and learn for the next project. And with each additional one, findings and measures that can be scaled fall away. Possibly towards an increasingly consistent overall picture and vision for the organization.
We have experience and tools for such projects and offer curricula for skills development for human resource employees to set up and manage such projects.
If you are interested, please contact me or us directly!
CEO and Partner Breitenstein Consulting