During the post-epidemic period, CEOs and human resource leaders are encountering the six major human resource management trends that have gradually become AI, complementary strategies, and operations to achieve a suitable enterprise transformation.
AI Power = Talents x AI
New situations and new actions have changed before normality has formed.
The Covid-19 epidemic has severely hit the economies of many countries and accelerated changes in business operations, people’s consumption, and life patterns. Most companies have drawn up goals and budgets with a more active attitude to meet the trends of AI or AIoT now. A small number of companies are in chaos—very few companies who are not aware of the change. From the perspective of human resource management strategies and operations, CEOs and HR executives need to be familiar with the following six major trends and assist enterprises and HR departments in formulating appropriate practices through the transformation of the nature and content of HR operations.
In this article, you will not see the typical steps of the digital transformation of human resources management, because digitalization is already a necessary foundation, and the challenges on this foundation are issues that HR personnel must take seriously.
Trend #1, Employment Structure Change
Especially in technology, business, marketing, and problem-solving areas, the employment structure will change from a top-down relationship to a more two-way equal and mutually beneficial partnership between customers and service providers.
Companies’ needs and talent capabilities will be platformed and commercialized. The matching model of the traditional hiring website is going to evolve into: the achievements and performance of talents in the enterprise over the years, as well as a large number of evaluations on the Internet, will become essential parameters for evaluation. The advantages and disadvantages of entering a particular enterprise are no longer a secret, and both parties can access a large amount of data and information, companies and talents can understand each other’s situation, the matching is in real-time. A platform that can provide an accurate database and effective recommendation will win.
Some employment relationship that lasted for one or two years no longer exists (if you see the long-term relationship that associates with life-long employment or those with more than 5 years, please come back to reality first. That was 20 years ago and 5 years ago), it has become a shorter transaction relationship, but it may transform into a long-term project, especially non-core business or semi-core outsourcing business. (Semi-core business refers to short, medium and long-term outsourcing work that supports the company’s core business )
This change will accelerate the relationship between enterprises and talents and the top-down employment model. A two-way net-nested structure, as shown in the figure below :
Trend #2, AI Power Shake The Status Quo of Current People and Organization
AI Power = Talents x AI
Regarding the capital advantage, investors may not need to improve their skillset for AI. However, the power and influence of managers will be blurred. Especially after companies introduce AI to assist related operations, the work or service capabilities of Talent x AI will significantly jump to a phase that existing managers cannot understand and catch up, unless managers also have the same AI power.
Soon, most companies likely will not need to have traditional managers ( Supervisor ), management becomes a service provided by AI; the leader will combine the big data and suggestions from AI, also refer to the coaching feedback to have the decision-making.
Leadership is becoming more and more critical. Communication, coaching, conflict, exception handling, value judgment, customer-driven strategy, strategic thinking, talent training, vision, and values will become more superior skills for the new generation of managers.
The advantage of seniority will break entirely, and the higher possibility is to become an obstacle unless people can keep up with the overall learning speed of the enterprise and the pace of using new technologies.
The HR team should set a holistic learning plan for all departments in related perspectives of AI and digitalization to increase AI power for the team as more as possible.
The synergy of AI and talent is : AI Power = Talents x AI
Trend #3, C&B is dynamically linking to performance
The salary scheme is no more fixed. An individual is like a profit center, who manage the profit and loss.
Salary design will primarily shift from the traditional job quota + bonus approach to a profit center system for individuals and teams. Because every transaction or project can find the best benefits solution through big data and AI, is it profit first, the market is the first, or the revenue meets the target? What is the value of the person’s work to achieve these different business strategy goals? What is the cost of using internal resources? Both short-term and long-term contributions can be quantified. The time and extent of using other services of the company can also be quantified. The quantification combines individual and team benefits to maximize performance. It sounds a bit scary and similar to comprehensive monitoring. Individuals like myself do not want to work in such a company, but such practices have been implemented in several world-renowned companies, and it is not difficult to design and implement.
Trend #4, New laws, and new legal practices
- The complexity of managing online and offline talents across countries, including language, laws, and employment market differences, will accelerate the application of AI HR+Legal.
- A virtual currency and PayPal-like payment system will include in the payroll system.
- When work from home becomes a norm and attracts outstanding workers from all over the world, enterprises cannot and do not need to set up legal entities to pay employees’ salaries and insurance. Most countries will also propose corresponding tax laws for individuals and companies.
- The confidentiality agreements and management will accelerate HR’s coordination with legal affairs. IT team will develop new management models, or there will be more powerful third-party review and service agencies in the market to help companies protect secrets and prevent personnel from deliberately or accidentally leaking confidentiality.
- Evidence of the ability of talents will be easier to forge, and the difficulty of enterprise verification will increase considerably. But if its forgery ability exceeds the current level too much, maybe this person is a talent in a specific aspect of the company? And because the blockchain is almost impossible to tamper with, the characteristics of high authenticity, all kinds of talent certificates, work results records, salary payment records, etc. will gradually be transferred to the blockchain.
Each change will produce relevant applicable laws and regulations. HR must master and understand the content to deal with it effectively and correctly.
Trend #5, Fake ID + AI technology make interview traditional
AI technology speeds up and provides the efficiency and accuracy of corporate interviews, but don’t forget, the situation is like a mirror.
Through new technology, a job candidate can find detailed information about a job or corporate culture; To see the supervisor’s communication and management skills, or find various information in real-time to judge whether the interviewing supervisor is a good leader, is worth to follow.
Soon, Fake ID + AI technology will make it impossible for online interviews to determine whether they are candidates themselves. In the end, face-to-face interviews for critical positions will become a necessary “traditional method.” Or, there is a robust third-party checking system or technology to reduce this risk.
Strengthen the corporate management skills, leadership style, and ability, and the long-term survival strength of the company is the focus of the employer branding. Excessive beautification of marketing your company is unnecessary and ineffective.
Trend #6, Challenges in retaining AIoT talents
The recruitment or training of domain knowledge + AIoT professionals (who has AI power) is complicated and challenging. If no one takes over after an AIoT member’s leaving, the impact on the company is even more significant than other personnel. We recommend to establish an enterprise retention mechanism through the following methods :
- 1.5-2 times the workforce planning: Whether it is a chief with a deputy or two chiefs, one person’s workload performs by 1.5-2 people. It seems that personnel costs are high, but this 1.5-2 times workforce planning will let the company establish a knowledge base, problem-solving models, and learning cases in addition to performing daily tasks. Compared with the negative impact and risk caused by the loss of talents, this investment is extremely reasonable. When the business expands, someone can immediately support it. At this time, the 2 people-workload must share by 3-4 people.
- A reward for retaining talents: Remember, in addition to rewarding performance, rewards must also include the training for deputies and the establishment of corporate knowledge bases. The bonus is claimed in 2-3 years, not at once, similar to employee stock options.
- Technological development: Let talents develop more excellent skills and assist in enterprise development. In the future, internal or external entrepreneurship can create benefits for the company.
- An incentive for completion of resignation handover: We can create an environment where people are willing to stay, but we hardly have zero resignation. Therefore, a proper handover can minimize the impact of personnel changes. The labor laws of various countries stipulate that the company must be notified a few days in advance to leave the job, but these days are far from enough to prepare the next person to take over. An additional handover incentive can formulate by each individual’s specific needs.
When this system is well planned, let HR+AI take care of these talents!
Strategic thinking: the change of essence of “Human Resource Management.”
Six trends described above will shift
Human Resource Management evolve to
Organization Value Management. Because the value of the company will not only lift by “human” but by human + AI together (AI Power = Talent x AI).
Human Resource Development evolve to
Organization Value Augment. Some departments will be replaced entirely by AI, but new organizational types were born to increase the value of the enterprise. Similarly, new tasks are mainly executed by talents with AI power.
The current HR function, such as hiring, staffing, training, rotation, development, and retaintion,is transforming into Organization Value Management of
- The internal and external value chain of the enterprise,
- Digitization and AI,
- Establishment and maintenance of corporate code of conduct,
- Organization and performance reward design for “AI Power = Talent x AI”,
- Corporate culture and internal communication.
In other words, administrative operations, general management, and standardized services will be replaced entirely by AI.
For example, when I was a human resources manager of a company in 2005, the human resources division planned how to outsource HR administrative tasks from time to time, such as outsourcing various insurance operations, salary, welfare planning, training implementation, and production team members recruitment. We focused on more worthwhile projects. Now, these operations do not need to outsource. New technologies are more effective than outsourcing, faster and more economical, and can link an internal system to provide real-time information for decision making.
How to response the challenges and set the counter-strategy
Now HR team must plan for as soon as possible, in addition to the above tasks, which can be further “outsourced” to new technologies. For example, resume screening, preliminary interview, establishment of competence model, workforce inventory, competence/capability inventory, project tracking system, project talent adaptation optimization, basic organization design, basic process optimization, talent rotation analysis, salary planning, AI coach, talent career development, personnel management, basic internal communication, etc. Through these new era outsourcing models, new organizational types, new processes, and new operating methods collaborate accordingly.
What abilities should human resources team members have to respond to these trends and challenges?
To meet the above requirements and assist the transformation of enterprises, organizations, and talents, HR must have the following “five capabilities “
- Organizational design
- Process analysis
- Performance optimization
- Operate new technologies
- Statistic and Algorithm
To keep pace with the challenges and internal needs of the company, smoothly execute tasks under the six human resources trends, please refer to the following summary table:
CEO and HR director may think and prepare for it according to your company’s “Value”, “Methodology,” and “Practical Operation Procedures.” Alo refers to the six human resource trends and the corresponding strategies for the transforming essence of HR, to plan a suitable enterprise transformation strategies and practices.
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