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“Going Digital” – the Impact on Human Capital Policies

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Referring back to the table that we put together based on the article “From Job-based to Competency-based Organization” by Edward Lawler III in 1993, one thing came to mind – this is going to have an incredible impact on Human Capital policies!  And are we, IT and HR, ready for this?

Human Resource policies are formal rules and procedures that dictate how certain matters should be addressed in the workplace, including employee rights and duties.  They serve to prevent or clarify misunderstandings between employers and employees, which have to do with rights and obligations in the workplace.  Employers are expected to develop and maintain a comprehensive set of HR policies.

HR policies are designed to promote communication and understanding between managers and their subordinates, and to give employees guidance and direction if there are any questions about office processes or expectations.

HR policies are, generally, tied to employment law.  Therefore, to avoid non-compliance and penalties from the government, employers must adhere to HR policies.  To avoid disciplinary action from their employers, employees should comply with HR policies.  It is fair, therefore, to say that HR Policies are “compliance driven”.

Each HR policy addresses a specific workplace issue and is incorporated into the organisation’s policy manual, for example:

  • Labour relations management – standard time, overtime, work schedules, paid and unpaid time off layoffs and terminations, discrimination, employee conduct and disciplinary measures.
  • Recruitment and Selection processes – includes interviewing, hiring, performance evaluations, employing family members, reference and background checks, immigration, physical and medical examinations, rehires and new-hire orientation.
  • Compensation and benefits
  • Workplace diversity
  • Health, safety and security
  • Talent Management
  • Training and Development
  • Performance Management
  • Workforce Planning, etc.

Each organisation will tend to have its own collection of HR policies depending on its needs, strategies, etc.

With the advent of Agile and Competency-based organisations and the “new world of work”, many of these existing policies will be challenged and are likely to be found wanting.  Just as organisations are having to respond to customer expectations around the ‘on demand’ economy, so too are they having to meet similar demands from their younger workers.  In this context, the biggest challenge for leaders – likely to be baby boomers or GenX – is to not assume that other generations share their values, attitudes and expectations.

These leaders are going to have to make an effort to understand what makes the new generations ‘tick’ and adapt structures, leadership styles, processes, policies for organisations to attract and retain talent in the new world of work.

HR policy areas that will take the greatest strain are:

  • Political, social and economic change – the term VUCA (volatility, uncertainty, complexity and ambiguity) is used to describe both the global political and economic landscape and the environment in which businesses operate. Organisations are increasingly having to ask themselves what the future might hold and having to adapt their planning horizons accordingly.  Becoming more agile and flexible is now a business requirement!  Organisations are radically rethinking their entire approaches to structure, leadership and employee engagement.
  • Expotential technology change – whole industries are being disrupted by the pace of technological change and the disruption this is causing. Customer and employee expectations have changed, with the ‘right here, right now’ attitude permeating all areas of life.  Technologies are changing the work environment – permanently.
  • Traditional employment model – for the new generation, ‘work’ does not necessarily mean the traditional employment model. They are far more open to the prospect of freelance or contract work and portfolio careers.
  • Employee communication – new generations don’t know life without the internet, email, Google, texting and social media. Their preferred method of communication is email, not face-to-face, they build social networks online, demand instant access to bite-sized information and consume information from a variety of sources online.
  • Work/Life Balance – the new generations work is a significant part of their lives but the boundaries between work and life are blurred. They value remote work – at home or local coffee shop, and expect the workplace to have some of the “comforts” of home.
  • A sense of purpose – they do not necessarily see work in terms of being successful and making money. It is also about working somewhere that aligns with their values, where they can identify with the social and environmental benefit of their work and feel part of the positive impact their employer is making.
  • Experience rather than career paths – younger generations struggle with the concept of a career path based upon progression by job title. They think in terms of a sequence of experiences and look for responsibility early on in their careers.
  • Learning and development – new generations want real-time, on-the-job, always-on learning that allows them to build their knowledge quickly, remotely and on their own terms. Aligned with this is a strong preference for regular, informal feedback over more structured annual appraisals – which don’t work anyway!

As we have been highlighting in our series on “Going Digital” (you can see all articles on our ITHRGuru Blog), new types of organisation are emerging, and traditional organisations are contemplating how they can mutate into this new form.  These newer organisations are going to be flatter, more agile, aligned around a common purpose, and where flexible work environments, capabilities and competencies, employee empowerment and collaboration are the norm.

Are your organisation’s HR Policies going to be ready for this?

To discuss the different issues that we have been highlighting, please email us and we will get right back to you.