HR Landscape 2025: Transformation in HR Systems and Operations
World 2025
The world 2025 will witness competition between the equals. The champions of today, the 34 countries under Organisation of Economic Co-operation and Development (OECD) will be challenged by the fastest growing economies of the BRICS nations. Based on the Euromonitor International from IMF, the top 10 countries by 2025 will be China, USA, India, Japan, Russia, Germany, Brazil, UK, France and Mexico.
Image Courtesy: freedigitalphotos.net, danilorizzuti
What does this mean for Global organisations?
1. Build Local Talent
The firms will have to build local brands, have distribution presence even in small towns and cities of the above mentioned nations and hire senior local leaders with significant autonomy to drive the business in that country. The Mckinsey & Company’s Global survey ‘Five forces reshaping the global economy’ (2010) provides evidence of the strategies that would shape up the businesses in the coming future, the survey ranks Building local Presence, Developing partnerships/Joint ventures with local companies, and Recruiting talent from emerging markets as the top three forces.
2. Virtual Work
The technology ubiquitousness in the wired world of 2025 renders flexible working as a cheap, credible alternative like never before. For one, this offers cost-benefit which is hard to ignore. Moreover for the current generation of employees, who will be middle level managers by 2025, Virtual work will stride forward to become a mainstream choice than just an alternative as it is today. The Generation Y seeks work life balance and flexibility to the extent that they are ready to give up on perks and take pay cuts. This makes Virtual work could be a differentiating factor in Employer Branding. According to the Futurologist James Bellini, The future is a ‘connected’ age of virtual communities and online networking. Businesses that ignore the power of the ‘virtual resource’ risks profit margins and decline of its business.
3. HR as Facilitators
HR strategies will sit on the board room’s table, the 2025 world will witness increased leadership accountability and Broad-based participation. The formulation and implementation of the HR strategies will be recognised as the most important responsibilities of a business leader. HR department will play the role of a Contributor and Facilitator. HR will be in the periphery, critical in providing inputs to strategy, delivering services and in governance but will not driving the strategy. HR will be process-centric, delivering functional services - hiring, payroll governance, training, talent mobility, etc.
4. Shift in the Global workforce
Talent management is significantly impacted by ageing on populations. The factors to consider here are the population growth projections, Migration trends and fertility rates to arrive at the Replacement ratios. Apart from this, the workforce’s gender mix, generational shifts and proficiency (Technical & Management) of the workforce is required to determine the aggregate talent availability in a market. Such insights are required for a company planning on or have invested millions in growing business. Based on the World Population projections by Department of Economic and Social Affairs, United Nations (2010), by 2025 Europe and East Asia (particularly Japan, Korea) will face an economic speed breaker. The growing dependent population in these nations increases economic liabilities of the organisation. On the other hand, countries such as India, Malaysia, Egypt, South Africa, and Philippines will have average age of 26, which means the locations offer promising pool of labor for businesses in 2025. By 2025, both India and China will have enhanced their position as important growth engines in the global economy; this means an insatiable hunger for fresh management talent. India, when compared with China where management is still a new concept, offers a much larger pool of prospective managers.
5. Shift in Talent Management practices
Employment transaction has evolved leading to a foundational shift in the employment equation. On the one hand, employees become redundant at the first sign of economic turbulence. On the other hand, the stigma and the disincentive related to job loss, career shift or downshifting are historically low. This means one necessary practice in 2025 is shifting focus from hiring the best talent to hiring the right talent.
With increasing talent crunch, companies should seek unconventional ways to win the ’Talent War’.
- Cross-Profession hiring
Companies should exhibit increased flexibility with Employee Mobility allowing employees in positions as high as middle-manager level to experiment with their functions and roles. These managers have significant ‘transferrable’ skills, hence companies can gain access to some serious talent by investing a little in building proficiency.
- Returnships
Companies should open doors to employees with extended career breaks, particularly women who take a break to nurture family. Such candidates possess skills for the role but lack confidence or may be disoriented. With transition support and informal mentoring, such candidates offer credible talent.
- Open source talent
Technology has made the boundaries of an organisation porous to external talent. The concept of ‘Crowdsourcing’ is already a buzz in the business world. P&G already has adopted the process through its ‘Connect & Develop’ program. The researchers at P&G collaborate with the external talents gaining access to the best minds across the world. Amazon and Wikipedia have embraced the trend too.
- Poaching: As real as it can get
As mentioned earlier, employee mobility between organisations is on the rise and the trend is expected to continue in 2025. Hence it is absolutely necessary for companies to make internal mobility a virtue. Poaching from within is better than having competitors poach the precious talent.
6. Help Innovation thrive
In 2025, companies don’t have a choice but to be innovative. Unlike in previous decades, Innovation is not optimizing the existing process but ‘seizing the unknown’. Companies don’t just require employees with the right skill-sets but an appropriate environment that allows innovation to thrive. Taking cues from the most innovative companies, Apple and Google, companies need to offer employees an environment that is relaxed and informal without bureaucracy. The company must allow employees to make mistakes and encourage experimentation. Another imperative is non-Silo thinking, inter-functional collaboration is absolutely necessary to question the status quo.
This article has been authored by S. Priya & Dharini P. from Lal Bahadur Shastri Institute of Management
References
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- CLC Human Resources Executive Board (2009) Engagement research survey, 2009 employment value proposition survey (accessed online).
- Gupta, A K and Wang, H (2009) Getting China and India Right, Jossey-Bass, San Francisco.
- Hayutin, A (2010) Population age shifts will reshape global workforce, Stanford Conter on Longevity.
- Huston, L and Sakkab, N (2006) P&G’s new innovation model, Harvard Business Review, March.
- ILO (2011) Global employment trends, the challenge of a jobs recovery.
- McKinsey & Company (2010) Global survey results-Five forces reshaping global economy, McKinsey & Company.
- McKinsey & Company (2008) Making Talent a strategic priority, McKinsey & Company, January.
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- Stewart Black, J (2009) Waging and Wining the war for talent in Asia in Leadership in Asia, edited by Dave Ulrich.
- Tower Watson (2010) The new Employment Deal, Insights from the 2010 Global workforce study.
