The fourth industrial revolution (Industry 4.0) is slowly changing the nature and shape of both our economy and our lives. Today, the potential scope for transformation seems endless, from cars that drive themselves to on-location production through 3D printing.
But while it’s clear that changes are starting to occur throughout society, there is still a lot of uncertainty over the future of work and the impact such changes will have on labor markets.
The Hive spoke to Silvia Hernandez, Partner in People Advisory Services, EY to ask how organisations can unlock the potential of people in a digital world.
Can small and medium enterprises compete in human capital investment against larger firms with greater resources?
“Companies looking to invest in human capital should look to technology, leveraging it to do things differently. Also Industry 4.0 helps businesses to create flexibility in how their employees are able to work, while implementing programs that support the development of the technical skills employees need. Companies are starting to realize the importance of incentivising employees to be creative, and there are now many different options that add to the employee experience beyond compensation.”
In certain countries, such as Germany and Austria for example, there are strong labor unions and work councils. How are these countries thinking about the transition of work at the moment?
“These countries are starting to look at technological advancement more closely, but their policies tend to not be that aggressive yet, and certainly not as flexible as they could be. It will most likely be hard for them to be nimble and flexible in the future. As digitalisation takes hold and we see technological advancement, I expect that there will be some more flexibility from the work councils as a result of external pressure, and as some of the big industrials might be at risk, I imagine hard expectations might soften as the realities come into focus.”
Do you feel that we are not investing enough in human capital? Not many OECD countries have seen a large uptick in this area since the financial crisis.
“We are not investing enough in human capital. In my view, there is a huge risk that we miss the opportunity to create the platforms necessary to help individuals develop a life-long love of learning. Technology is changing the face of the human resources function as well. In Central Europe, I have seen human resources act as an administrative body and an execution body, but not fulfill its role as a partner to the CEO. This Fourth Industrial Revolution is giving human resources executives the opportunity to really think strategically and become a critical partner in the execution of business strategy.”
“We are not investing enough in human capital. In my view, there is a huge risk that we miss the opportunity to create the platforms necessary to help individuals develop a life-long love of learning”
What positive examples have you seen of how businesses have developed ways of working with technology to attract talent?
“There are a lot of interesting examples of companies that effectively use technology to attract talent or match individuals to tasks. In my view these are relatively young companies and start-ups. Legacy companies or the industrials are starting to talk about this and are introducing initiatives to attract new competencies. I think a good number of these organizations are redefining their employee value proposition to tap into the newest skills that are different from what they currently have in their workforce.
What should be understood is that we are currently far from best practice in this field. In my view, we should think about the entire value proposition we offer our employees. We need to adopt a holistic view of this issue to create a well-articulated and compelling employee experience (that is differentiated for our employee groups). This applies to recruiting, on-boarding talent, giving them the ability to contribute and keeping them infused with the spirit of what the company does for as long as they are with the company, right through to staying connected once they move on.”
What skills do you feel will be critical for people to have by 2030?
“Creativity, empathy and the ability to inspire are skills that will be critical in 2030. These are some of the traits that will be needed in order to lead in a connected world. There are conditions in being human that are going to be fundamental in defining some of the things we do, as it is about combining human skills with what machines can be most effective at doing. It’s how we as humans, interact with those technologies to create new opportunities to add value that will influence how we progress.
“Creativity, empathy and the ability to inspire are skills that will be critical in 2030”
One thing that I think is starting to be discussed is that the curriculum of current leaders does not include these traits. We work with Oxford’s Saïd Business School, and we have discussed working topics such as philosophy, which does not fit into the traditional business education, into the curricula, as it could provide a perspective for students that will be critical for business leaders going forward. EY’s Global Leadership Forecast highlights how much more can be done in developing current leaders digital skills; this is a situation that should be addressed as quickly as possible.
I think it is important that business leaders are capable of thinking about the big questions such as issues within capitalism, climate change, radicalization, and the ongoing challenge to democracy. Private sector organizations will have a huge role to play in managing these issues, as they are too big for governments alone. We are already beginning to see this happen – for instance, the Coalition for Inclusive Capitalism has established a number of initiatives that bring together leaders from some of the world’s most powerful companies to begin addressing these issues.”
Have you seen any evidence of a trend toward cross-sector employment, where one sector will employ individuals from another, with a non-traditional skillset?
“There are a lot of opportunities to use talent in different environments, particularly as technology creates a platform for us to connect skills with jobs. These types of informal platforms also create work opportunities for older members of our society that might not be able to work otherwise. There is a huge opportunity at the moment for organizations to think about talent in new ways and to really connect people with tasks. I think we will certainly see growth in this area, as technology enables people with skills to be further connect to those who are in demand of their services.”