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Top Ten External Human Resources Transformation Drivers

Top Ten External Human Resources Transformation Drivers

By: Ciopages Staff Writer

Updated on: Feb 25, 2023

External Human Resources Transformation Drivers

What are external Human Resources Transformation Drivers?

The external human resources transformation drivers, as the name suggests, are the critical macro factors that are necessitating a rethinking of HR operating model, a reimagining of the HR service model, a re-engineering of HR processes, and re-platforming HR systems.

You may also want to learn more about internal imperatives driving Human resources transformation.

Top Ten External Human Resources Transformation Drivers:

The external Human Resources transformation drivers are the key trends that are necessitating a rethinking of HR operating model, a reimagining of the HR service model, and a re-engineering HR processes and re-platforming HR systems.

  1. Employees as the most valuable Asset: In this information driven, digital age, workers have emerged as the most asset of an enterprise. Hence, managing these resources is no longer a back-office record keeping and administrative function. But instead, human resources function today has become the strategic driving force of a firm’s success.
  2. The Scarcity of Talent: The shortage of talent and the war for some skills and competencies are at the front and center in most industries. This is true for many STEM (Science, Technology, Engineering, Math) disciplines as well as skilled vocations in many other industries. As the availability of talent is a matter of life and death for companies, the need to manage HR functions and processes more efficiently and effectively is helping drive HR transformation endeavors.
  3. Globalization: The globalization of business has significant implications for business. HR needs to adopt to a “Glocal” model, which is global in nature for certain processes and functions, and local in nature for the rest. While some of these are based on cultural nuance and social subtleties involved in a local geography, others may be more substantive, based on the law of the land.
  4. Dynamic Business Environment: The pace of change in business is breathtaking, and HR needs to be at the table to support the change in business models, organic and inorganic growth, shifts in demands for company’s products and services, and rapid redeployment and retraining of employees necessitated by all these changes. So, Human Resources teams cannot be passive participants but must become active drivers at the vanguard of proactively managing change.
  5. Changing Expectations of the Workforce: The Millennials have emerged as the largest and most technologically adept demographic cohort. The social and cultural mores, the expectations from work and life for Millennials are different. Hence, companies the world over are scrambling to make their workplaces, and hence HR processes in line with the changing expectations, or rather rising expectations of the millennials. Combine this with the aging baby boomers, another vast and important demographic cohort, whose skills and knowledge needs to be transferred to the next generation, the challenges for HR are significant and hence the need for major HR transformation.
  6. The Rise of Contingent, Contract, and Freelance Workforce: After the great recession, a global trend has emerged regarding contract, contingent, and freelance workforce. Whether it is designers at 99Designs.com, or oddball services at Fiverr.com, the car owners who double as Uber drivers, or the masses of the delivery workforce for the e-commerce distribution, the trend is clear, present, and relentless. Human resources team are ill-equipped to deal with the rise of the contingent, contract, and freelance workforce and this is another factor driving HR transformation.
  7. The Emergence of Automation: Robotic process automation and other AI/machine learning type technologies are making some jobs obsolete, and in some cases, the role of humans is to work alongside these systems. How do the new HR policies and procedures the (Wo)man and machine interaction and interplay? Indeed, it is time to reimagine.
  8. A new generation of cloud-based HR Systems: Hitherto, Human Resources Information Systems were primarily record keeping and administrative systems, with a clunky user experience. That has changed in recent years, thanks to the new wave of cloud-based SAAS solutions, which have made the user experience as the centerpiece of their software, and ease of use a primary feature. Companies that have not embraced the benefits of the HR cloud systems need to rethink.
  9. Increase in regulatory and compliance mandates: In addition to the existing regulations, a plethora of other provisions and compliance requirements are adding to the burden of HR departments, who in turn are throwing consultants at the problem. Instead, an embedded compliance approach may make a lot more sense.
  10. Growing diversity of available talent pool: The variety of the talent pool – language, region, religion, education, gender and identity, sexual orientation et al. – is mind boggling. Given this unique and diverse talent pool, companies need a cohesive and yet flexible way to manage the different resources, around a set of common converging principles. Doing it is not easy, and businesses need a transformation in their thinking and approach to accommodate the needs of each and channel the energies in the right direction for achieving the corporate goals.

What other external human resources transformation drivers did we miss? If you have any such key drivers, please feel free to share.

Please check out CIOPages.com HR Transformation Resources and the Human Resources Transformation Toolkit for additional insights and resources to help you in HR transformation efforts.

You may also want to check out Deloitte’s list and Dave Ulrich’s post on HBR.

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