Challenges in HR Practices in the Fast Changing Tech-World

Published by MBA Skool Team, Published on June 14, 2016

The organizations are now facing major challenges with increasing globalization, technological changes and increasing competition. Added to this various organizational changes such as structure and hierarchies, changes in employees’ priorities, diversity and their demographic characteristics. These change have changed the role of HR in an organizations from workforce management to workforce development. Although the role of an HR is evolving for a long time but it has gained increasing importance after organization began to perceive their employees as resources. Earlier HR department was used to be static but now success of business in new locations having different culture and workforce capability depends on how flexible and creative the HR department is.

With the increasing encroachment of technology, people have become most critical factor in the success of the organization and so is the HR department which now have an active role in the organization. New product development and innovation which remains key for finding new solutions for the market become possible only when employees’ are engaged. Earlier, Attrition rate used to be the parameter to measure the effectiveness of HR but now engagement level of employees decides the efficacy of HR department which is main differentiating factor for the company.

Image: pixabay

Hence role of HR is now more about interaction than transaction. As many organizations are now growing with mergers and acquisitions which often results in multiple HR groups which may be complementary or duplicative. In case of duplicative, it may lead to downsizing and consolidation which is often painful. This makes HR department unable to serve all the areas of consolidated company which undermine the credibility of HR in the company. The approach to tackle this issue is to develop HR groups in different parts of the company as “centers of excellence” to serve the interests of larger company. This would make different groups complementary to each other and hence company would benefit from internal competition.

Some changes in the external environment and balance that HR would have to make are:

1. As organization are increasingly operates on flatter structure, cross-functional teams traditional top-down approach have to be replaced with agile management techniques.

“In the Forbes research, it was found that companies which set their goals for employees quarterly outperform those companies which set their goals annually by almost 30%.”

2. Companies are now having workforce which wants mobility and progress. This has put a challenge before HR to develop structures which provide internal opportunities and facilitates talent mobility. In future we would see that most of the senior employee would be promoted from company internally. The trend is evident in many companies in which they pick up young employee and nurture them in their “Global Leadership program” so they may become their future CEO.

3. One of the major disruptions is coming from “Talent management Software” whose market has reached $15 billion. These software performs the function of performance management, learning, compensation and applicant’s tracking. These software taking away the traditional functions of HR so to maintain their credibility HR would have to develop intangible skills which cannot be replicated through software and have to assume strategic role in the organization to remain relevant.

4. HR analytics, big data and workforce planning are emerging but their effective use would depend on the capabilities and experience of HR. As HR analytics is a new area so it would take some time for companies to evolve and develop strategies in Analytics. These new work on the philosophy of “wisdom of crowds”.

5. Now the workforce is becoming highly diverse in terms of ethnicity, gender ratio, age, physical ability, intellectual ability, learning ability etc. which calls for developing new engagement policies to monitor, measure and improve engagement which would otherwise impact their efficiency and efficacy.

6. In talent management, one of the major challenge that HR come across is to manage and develop skills of their own teams. As market place of talent management is going through rapid changes so organizations are required to invest in the skills of HR also. The research done by Forbes shows that companies which have forward thinking and progressive ladder for HR outperform their rivals.

Disruptions in HR Technology Landscape:

The HR technology is a $15 billion business scenario and is still increasing with modernization and growth. This has prompted venture capitalists and private equity firms to invest heavily in this space. As money enters the HR tech. so new ideas and smart people are also attracted towards this space.

1. Systems and software are now focusing on the level of engagement rather than system of records. This is the shift from traditional software which were used to store employee data, company policies, time and attendance. Now automation is the major area which is witnessing change and software are now being used by employees more than HR thus there is increasing trend for “self-service” software market. System run on mobile platforms are evolving and resume has been replaced by LinkedIn profile, so recruitment software which are easy to use are becoming increasingly popular. Learning software are also fully integrated with work and come with instruction modules so that employee may develop new skills and develop opportunities for them.

2. There are now almost 5 billion mobile devices and 1.5+ billion smartphones while laptops and desktops are only 780+ million and 740+ million respectively. Thus focus would be to build more and more mobile rather than developing mobile versions as it is more likely that HR would access your applications 2-5 times more on smartphones than they would likely to access on their PC. Some typical applications on mobile platforms are:

• Time and attendance

• Online Learning Apps

• Directory of employees

• Goal management and setting

• Communications with employees

• Job applications apps and companies also advertise openings through them

• Engagement of employee and feedback

These are the major changes which are changing the dynamics of HR in the present time. In the coming time with the increasing Internet of things focus of companies would be to make these applications more and more real time. Artificial intelligence would be also disrupting the traditional role of HR and to remain credible HR would have to increasingly focus on strategic importance.


This article has been authored by Vikrant Singh Gangwar from IIM Kashipur









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