Redefining HR Value Chains: Driving Business Competitiveness in Emerging Markets
Phebean Amusan (MCIPM, HRPL, CPCC)
People Strategy ? Workforce Management ? Certified Professional Career Coach ? Future of Work Advocate
The word “Emerging Market’ was originally coined in 1981 by then World Bank economist, Antoine Van Agtmael. This word is used to describe countries or economies that are in a transitional phase between developing and developed status. [1]
Going by World Bank Country classification, these countries are termed as 'low-income' and 'lower-middle income' [2]. Around 80% of the world's economy falls within this category, including, the five major emerging market economies - BRICS- Brazil, Russia, India, China, and South Africa, as well as some other countries [3]. These emerging markets have their own share of social, economic and political challenges including corruption, heavy dependence on commodity exports, market volatility, currency risk, nationalism, and trade war, etc. which affect the ease of doing business; [4]?
Therefore, Organizations and businesses within these markets need to work thrice as hard as their counterparts in the developed markets to overcome territorial challenges and ensure that they remain ‘a going concern’ and globally competitive, most especially in the era of the 4th Industrial Revolution.
The 4th Industrial Revolution is characterized by technology advancement including Robots, Thinking Machines, Artificial Intelligence, Automations and other emerging technologies which are gaining adoption across different sectors and industries and disrupting business competitive landscape.
Recent happenings from global pandemic, political instability, regulatory and compliance, technological advancement to climate change, have further reinforce the ‘VUCA’ (Volatile, Uncertain, Complex and Ambiguous) characteristics of the business landscape.
As business uncertainty mounts on, there is a growing concern for businesses to quickly adapt to rapid changes, think 'outside of the box', and harness the capabilities of internal Human Resource (HR) function to deliver sustainable optimal business results and drive business competitiveness by hiring and retaining skilled and specialized talents that can build strategic business relationships, introduce innovative solution to peculiar challenges and develop cutting edge ideas into competitive products and services while leveraging emerging technologies.
HR, as a distinct unit or department within an organization, has a reputation for effectively providing support and services needed to get things done through people, aligning HR practices to the business strategy while anticipating general business trends and proactively meeting requirements of both internal (employees, management) and external stakeholders (customers, vendors, investors, regulatory/government agencies, communities).
Though, HR roles vary across different organization and markets, including emerging and developed markets, however, there are overarching responsibilities that every HR function must be efficient in.
As documented by Michael Armstrong in Armstrong’s Handbook of Human Resource Management Practice, 11th Edition; the three-legged stool model for HR function in any organization proposed by Dave Ulrich’ work in the 1990s highlighted HR as a Centre of Expertise- specializing in the provision of high-level advice and services on key HR activities- training & development, recruitment, employee relations; HR as Strategic Business Partners- working with line managers to achieve corporate goals through effective strategy formulation and extension; HR as Shared Service Centres- handling all the routine transactional services across the business- hiring, absence monitoring, leave application, etc
Over the years, the role of the HR function has significantly evolved and transformed from the administrative and impassive Human Resources style to a more sophisticated, effective, tech-enabled and business-oriented- approach to drive the achievement of sustained competitive advantage.
Smart organizations are investing sufficiently and leveraging an empowered and tech-driven HR to drive business by developing key strategic capabilities in Staffing and recruiting, Compensation and Benefits, Employee Engagement, Diversity and Inclusion, Employee development and learning, Succession and talent planning, Leadership and high-potential development, Performance Management, Change management, Organization Design, Industrial and Employee Relations, Employment law and government regulation. Etc.
From the RBL (Result Based Leadership) report on 30,000 surveys rating the competencies and performance of more than 4,000 HR professionals from more than 1,500 organization units all around the globe, it was concluded that ‘Because competitors can readily match access to capital, strategic intent, and operational excellence, CEO surveys increasingly point to businesses winning through differentiating themselves through organization and people’ [5].
Most importantly, in this era of technological advancement and globalization, every player across emerging markets, with long term strategy of engaging with global markets, should look inwards to re-strategize and redefine the inherent capacity of its HR function to create the right organizational capabilities through strategic hiring, training, development and continuous engagement of specialized talents/people with exceptional skills to drive leading edge business growth agenda, amidst fierce competition. ?
However, with technology and innovation becoming critical for business growth and sustained competitive advantage in the face of globalization, demographic shift, rapid urbanization, Resource Scarcity & Climate change - transforming the workplace, the workforce and the work itself, we cannot overemphasize the importance of the HR function being adequately resourced in response to these new business realities and dynamic business landscape.
In a recent White Paper on HR4.0: Shaping People Strategies in the Fourth Industrial Revolution by World Economic Forum, one of the contributors, Ravin Jesuthasan, Managing Director, of Willis Towers Watson, commented that ‘The Fourth Industrial Revolution and its significant implications for the future of work present the HR profession with a unique opportunity to redefine its mandate and further advance its mission-critical function by shifting from being a steward of employment to being a steward of work, while ensuring the continued relevance of the global workforce through the creation of a culture of continuous learning and reskilling [6].
There is a growing need for HR functions to be redefined and transformed in order to deliver competitive business goals in line with global best practices. One of the ways to achieve this, is by ensuring full integration of a technology-driven HR function into business strategy, service offerings and people-process design.
Automation and digitalization have been considered critical tools for driving improved employee engagement which has a domino effect on increasing productivity, revenue and market competitiveness. According to ‘research conducted on 120 organizations, those with high-performing employee experience outperform sector average returns on assets by 2%, return on equity by 3% and gross profit margin by 12%. Over the mid-term, they outperform the sector average three-year revenue growth by 4% and the three-year change in gross profit margin by 4%. In short, high-performing employee experience is a predictor for financial performance in the short- and mid-term’- Willis Towers Watson [7].
?An empowered HR, through its different value chains, can drive optimal business results and help businesses to remain globally competitive. Therefore, organizations within the emerging market economy should consider these sets of actionable practices towards redefining the Human Resources function across these 7 HR value chains;
1.?????RECRUITMENT, SELECTION & PLACEMENT
The recruitment landscape is becoming increasingly competitive with changing job market demands and rapid urbanization. Organization can leverage its recruitment capabilities to win the ‘Talent war’ and be positioned to attract, engage and retain best talents. The recruitment function can be transformed thus;
AI-Driven Recruitment- Artificial Intelligence (AI) can be deployed to drive automated candidate sourcing, headhunting, screening, interviewing, and hiring. This will free up valuable time for hiring managers to focus on more strategic roles.
Diversity Hiring- This will ensure that recruitment is neutral without bias for gender, race, ethnicity, religion, age, nationality or sexual orientation. The Job Description will be carefully worded to accommodate and attract diverse candidates and it will be illegal to specify gender in job vacancy announcement and advert in line with global best practices.
Candidate Experience- A lot of thoughts will be put into ensuring that candidates are kept-warm throughout their interaction with the company -from application to interview and onboarding of successful candidates. Attitudes of hiring managers or recruiters would change towards ensuring that job seekers are treated with utmost respect and humanity, ensuring effective communication and feedback at every stage of the application process. It’s about creating a great experience for the candidate, thereby presenting the organization as the employer of choice.
Talent Sourcing- This is about taking proactive steps to build diverse and robust talent pool for the organization by identifying, connecting and establishing relationship with potential candidates before the need arises.
Flexible Workforce- Remote working and work flexibility is a growing approach to engaging workforce. Though this new trend was triggered by the global pandemic, yet it has gained acceptance across different sectors and industries. The world of work is shifting towards the Gig Economy, talents are engaged on a short term or flexible working arrangements to ensure a win-win for the employee and the company.
Social Recruiting: Social media recruiting will help the organization to effectively identify, find and hire great candidates.
According to a 2016 survey by Society of Human Resources Management (SHRM)- 84% of companies are using social media for recruiting purposes [8].
Collaborative Hiring- Hiring managers are collaborating or working together with the business team to fill a vacancy. This could include conducting the job interviews with members of the business team in attendance to ensure the new employee or candidate is a good fit for the team. Thereby, working together to drive corporate goals and agenda.
2.????LEARNING & DEVELOPMENT
The learning & Development function is critical to developing the capability of employees to deliver on assigned roles and responsibilities. It’s also a great tool for driving employee engagement. This role can be redefined to deliver corporate growth agenda through the following practices;
AI-Powered Learning Platform- The learning platforms are becoming more sophisticated with the use of AI & ML to handle the entire learning management cycle from conducting training needs analysis for employee, to recommending training interventions based on individual employee performance and job functions, delivering highly engaging training sessions, evaluating learning impact and collating feedback for the L& D team. Chatbots can be deployed to deliver orientation and training programs for new hire and ensure a smooth onboarding experience, further shorten the learning curve and accelerate achievement of business agenda. ?
Data-Driven L&D: Since learning thrives on data ranging from employee data to learning modules and course details, among others. Big Data technology can be used to analyze huge amount of data and design customized training programs and course curriculums for staff.
Just-In-Time Learning- This approach is currently gaining wider acceptance. This concept can be used to provide needs-based training solution for staff, making it readily available when it’s needed and delivering it exactly how it’s needed.
Gamification- Game-based elements, point scoring, reward-based activities and competition activities can be integrated into learning modules to ensure an engaging, participatory and fun approach to learning.
Mobile Learning- Learning is going beyond the traditional set up of the four walls of classroom. The focus is shifting towards adopting Mobile learning (mlearning) solution to connect with employees and deliver learning contents to mobile phones and devices, regardless of geographical location or time.
In-The-Flow-Of-Work- This new approach to learning believes that learning should be an integral part of employees’ everyday work. This can be achieved by providing employees with easy and quick access to find information, insights or answers to burning questions. It can be with the aid of technology (search engines) or guided learning experience from peers, office buddies or mentors at work. This will help employee to complete tasks or deliver project quickly and efficiently.
Augmented Reality /Virtual Reality (AR/VR)- Virtual reality can be applied to drive immersive learning experience for employees by superimposing objects into current surrounding real life or by recreating tasks in high-risk environments and allowing learner to practice in a controlled environment to ascertain how this will be handled in a real-life situation.?
AR enhances learning by turning training modules to immersive experiences with the use of gamification to capture learner’s interest and drive engagement.
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3.????PERFORMANCE MANAGEMENT
Performance Management is a great way to assess employee skills to identify competency gaps and ensure HR provides all the support needed by the employee to meet and deliver on key success factors.
Continuous Performance Management- This practice will ensure that performance review isn’t just done quarterly or once-in-a-year practice, but on an ongoing basis, with frequent check-ins and feedbacks, including regular one-on-one meeting between the manager and the employee.
Coaching-Based Performance Management- In this approach, managers will wear two caps- The Manager’s cap and a Coach’s cap. Regular feedbacks and check-ins casual conversations will be matched with regular coaching where one-on-one meetings will become more meaningful with a focus on supporting the employee to uncover strength and operate at the optimum.
The Employee Experience- This is given more importance to the overall experience of the employee while working with the company. The approach is to ensure management designs job appropriately, provides working tools, develops employee capacity through training and provides all the support needed by the employee to meet, exceed and deliver on pre-agreed objectives in a safe and favourable working environment.
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Individualized Performance ratings- This approach is gaining more traction as the globalization increases and workforce becomes more diverse than ever before. It is only logical that performance management system should be personalized to suit individual employee rather than the traditional one-size-fits-all- system. The rating system should be designed and customized to accommodate individual uniqueness, skills and strengths required to deliver business objectives.
Tech-Driven Performance Management- As flexi-working or remote working becomes more popular, AI can be deployed to ensure objective and effective way of monitoring employees across multiple locations, managing diverse teams, collating feedbacks, providing tailor-made performance management system and providing support based on individual differences.
Quality and Impact-driven performance Over efficiency- Performance rating is taking a turn from measuring efficiency ONLY into weighing the quality and impact of employee performance on business objective and growth agenda. Performance management is not and shouldn’t be a box-ticking activity, it is a critical factor in ensuring adequate and relevant support is given to employee in alignment with strategic business imperatives.
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4.???COMPENSATION & BENEFITS
If Compensation is strategic, flexible and competitive it will help the organization to effectively attract and retain great talents, as well as be positioned as a great place to work.
Flexi-compensation- The current workplace is multi-generational with baby boomers, generation x, millennials and new entrants of centennials with different needs and approach to life. HR should be well-equipped to accommodate the interest and preference of multiple generations.
Variable Compensation- In this new approach, pay for performance will be based on variable pay practices where employers will rely on bonuses to reward actual goal attainment or outstanding performances rather than increasing salary which could increase fixed costs.
Fair & Equitable Pay programs- Forward-looking organizations are ensuring that all employees receive fair and equal treatment in terms of pay. This approach eliminates biases or discrimination arising from gender, ethnic, age or other social or cultural differences in line with global best practices.
Emotional Well-being Benefits- The focus of this approach will be to ensure both financial and emotional wellness of the employee by designing personalized benefit package. This may include; student loan repayment plan, tuition assistance programs, increasing access to healthcare package, on-site childcare, car insurance, work-life balance initiatives, etc.
Total Rewards- The focus of compensation shouldn’t be cash-driven only. Consideration should be given to holistic approach to compensation including monetary elements and personal development initiatives. In addition to base pay and incentives, other intangible elements can be introduced, such as, recognition, Paternity leave, retirement plan support, pet insurance, club or gym membership, professional membership payment, sponsorship to global conference or summit, etc. This approach will significantly improve employee engagement and participation in driving corporate objectives.
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?5.????INDUSTRIAL & EMPLOYEE RELATIONS
HR needs urgent transformation in order to fully develop the expertise for identifying and building the required ecosystem/people capabilities to relate with and deliver value for both internal and external stakeholders.
Workplace Safety- This approach can be adopted to support Employees openness about sexual harassment and any form of threat to safety at the workplace. New initiatives to ensure a safer working environment should be explored to encourage whistle blowing and ensure misconducts are reported.
Multi-Generational Workforce- With baby boomers almost reaching retirement age and inflow of millennials and centennials into the workforce, changes are coming to the workplace. New entrants come with different perspective to work ethics, they are questioning long standing policies and do not even believe in trade unionism or collective bargaining.?ER (Employee Relations) experts should be empowered to craft new and all-encompassing policies to drive engagement and accommodate the excesses of multiple generation of workforce.?
Pay Parity- Pay policies should become clearer and more transparent in order to close the gender pay gap.?HR should have the capacity to ensure fair and equal pay for employee handling same job responsibilities and in the same location, regardless of gender, colour, ethnicity or social background.
Metrics & Analytics: As ER becomes more data-driven, there is a growing need to leverage technology in analyzing data, monitoring trends and evaluating data that will drive business process continuity. Also, Big data technology can be used to assess employee behaviours, monitor engagements, analyze complaints and grievances and predict/prevent issues from escalating to litigation.
6.???ORGANIZATIONAL DEVELOPMENT & CHANGE MANAGEMENT
Organisational change is one of the most effective ways to achieve a competitive advantage. The change can be cultural, structural or technological, all with the focus to deliver better value in comparison with other industrial players [9].
Agility & Resilience- There should be a major focus on building agile and resilient workforce that can easily adapt to the changing and dynamic needs of customers, employees and the marketplace and help the company remain competitive in a dynamic business environment.
Job Redesigning- Deliberate action should be taken on job description restructuring to match the dynamic nature of technology, business ambiguity and ever-changing job-skill requirements and promote effective organization of job responsibilities, tasks, duties and activities into a productive work unit.
Redesigning the Jobs of the Future- Deliberate action should be taken to adopt a proactive measure of redesigning work responsibilities, tasks, duties and activities and organizing it into a productive work unit to match the dynamic nature of technology, business ambiguity and ever-changing job-skill requirements as well as ensure the organization is fit for the future of work.
Robotic Process Automation (RPA)- With the aid of software robots, routine processes and procedures are automated to run seamlessly with little or no human assistance. RPA should be adopted in a bid to reduce time spent on repetitive tasks and free up time for employees to focus on strategic business objectives.
AI-Change Management- With the increasing rate of adoption of Artificial Intelligence across different sectors and industries, there should be a focus on exploring the most effective way of helping the employees across different levels in the organization, to adopt and embrace Artificial Intelligence. AI has been identified as a critical business driver.
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?7.????DIVERSITY & INCLUSION
The concept of diversity and Inclusion is gaining popularity and acceptance in the business world. Every future-ready organization is building a diverse workforce without preference for ethnicity, beliefs, gender, age, religion, race or nationality. This practice brings diverse viewpoints and perspectives to the company and helps in developing great products and service offerings to meet customer demands and drive market leadership.
Use of AI to remove unconscious Bias- AI are deployed to prevent unconscious bias in organizational practices such as recruitment where all hiring tools are configured to ignore elements such as; age, gender, race, marital status, nationality in shortlisting candidates and ensure minimum bias in the recruitment process.
Sensitive HR Communication- Several HR communication materials, such as job description, vacancy announcements or job adverts should be scrutinized to ensure every document is worded in a way to prevent the use of genderized or discriminatory words/phrases.
Multi-cultural Project-Based Teams- As we all embrace globalization; deliberate efforts should be made to ensure project-teams, cross-functional teams and ad-hoc committees give preference to a diverse team formation. As well as ensure that all categories of workers get equal representation and equal access to information.
Equal Employment Opportunity (EEO)- EEO is gaining traction as organization embraces diversity and inclusiveness and ensure all employees are given equal treatment. EEO approach should be adopted to ensure all applicants have equal right to work in the organization and shortlisting is merit-based and void of social prejudice.
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Future-ready businesses within emerging markets that want to become globally competitive should empower and redefine HR to assist in creating the right organizational/workplace capabilities, an enabling environment for innovation to thrive and the appropriate people-process-technology intervention that help deliver business strategy.
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