Human Capital and the Virtual Enterprise: Reinventing the workforce of the future

Wagner Denuzzo, VP, Organizational Effectiveness, Prudential Financial

Human Resources is experiencing an essential transformation as a response to forcing functions impacting the ecosystem of organizations worldwide. In fact, most thought leaders on the subject are offering radical new ways of thinking about an organization’s workforce. From John Boudreau’s “Work Without Jobs” to Rob Cross’ “Beyond Collaboration Overload”, leaders focusing on work and productivity are envisioning the next phase of the workplace as an ecosystem comprised of skilled professionals in a dynamic composable workforce in which distributed power and collective leadership are the sources of value creation for a business. In the post Future of Work era, HR must reinvent itself to solve for critical organizational issues related to a hybrid/virtual workforce that’s distributed, dynamic, digital, diverse, and most importantly, discerning.

Skilled workers are conscious of their optionsand may choose to pursue alternative career paths to build their expertise while maintaining a healthy work/life harmonization. In addition, companies are realizing that recruiting full-time employees during high demand and relying on lay-offs during downturns is not an economically sustainable business strategy. In today’s global context, future-ready organizationsare embarking on the development of Human Capital ecosystems that can provide a wide range of solutions for key priorities, skills, and talent needs. In fact, the composable workforce is a responsive approach to the execution ofcritical organizational capabilities as a competitive advantage. The optimized workforce can be activated by an agile organizational design that’s connected to the company’s operating model, work design, and culture.

Organizations are complex systems where successful leadersexplore the environment with curiosity, act with resolve and courage, and seek to understand the impact the changing behaviors of their customers and workers, disruptive and innovative products from competitors, as well as how automation and AI powered tools are transforming how human capital creates value for their businesses. These leaders promote new ways of working to increase agility and rely on HR to design a strategic workforce planning that differentiates a high performing workplace. Within this ever-changing scenario, HR leaders must realize that static workforce management systems that rely on annual cycles and programmatic interventions may not be offering the agility required for the vitality necessary for a fully engaged community of people who are at their best when able to self-organize towards their mission, tangible outcomes, and business impact.

“Within this ever-changing scenario, HR leaders must realize that static workforce management systems that rely on annual cycles and programmatic interventions may not be offering the agility required for the vitality necessary for a fully engaged community of people.”

To start this transformation, leaders can invite all HR team members to offer their views and ideas on how to enhance the effectiveness of their functions. Use available technology to create a forum for everyone to express their opinions in a safe environment with no judgment. Allow for those who are closest to the business and the people to voice their opinions with the freedom of transparency and empowerment. HR leaders know that maintaining the status quo will not deliver different results for the business. HR professionals are ready to tackle these challenges with new thinking about workforce analytics, talent management cycles, performance management methods, learning and development as well as talent access beyond talent acquisition. It is time to let go of what we know to develop the knowledge that will take us to the future successfully.

In addition to letting go of past practices, HR leaders will need to assume their role as Human Capital experts, partnering in the execution of business strategies from the start. In the new context, Human Capital Management must be designed to activate organizational ecosystems for best business results. The advanced HR technologies available today are automating and eliminating work that used to be an HR professionals’ job. Direct access to services, processes and tools are creating the frictionless employee and manager experience necessary for this transformation to advance to the next level of maturity. Insteadof organizing HR in teams that representprograms and cycles, HR can be even more impactful by focusing on integrating the systems that drive business value and building the capabilities related to a workforce that’s adaptable, skilled, and flexible through just-in-time work assignments.

There are three foundational systems that must be part of this new Human Capital Management construct: Systems of Record, Systems of Insights and Systems of Engagement. Systems of record refer to an accurate data collection that allows for all kinds of working relationships to be tracked, that is, full-time, part-time employees, consultants, independents, free-lancers, and partners. A system of record can greatly help an organization build teams quickly, provide an easy on-boarding experience for non-full-time employees and create a dynamic composable workforce with the right skills, at the right time, and at the right cost, with agility and speed. HRIS must evolve quickly to allow for this blended workforce to co-exist and offer the opportunity for reports and dashboards that allow for the Strategic Workforce Planning, resource, and capacity management necessary for sustainable high performance.

Systems of Insights are the platforms and technologies required for the agile organization to learn about skills requirements, understand the supply and demand equations while producing descriptive, predictive, and prescriptive analytics for a business to manage its human capital with precision. These systems are mostly powered by machine learning and AI to ensure that skill gaps are identified, new roles and workflows are reflected in the workforce composition, and to allow for employees themselves to identify career pathways, skills’ growth, upskilling and reskilling necessary to remain competitive in the marketplace. Workforce analytics is a critical capability in Human Capital Management as it can be a diagnostic tool for attrition, anticipated skill gaps, and most importantly, support new work designs and role deconstructions and reconstructions. Human Capital leaders are digital experts and can offer business advisory services most critical for a company’s success.

Systems of Insights are most valuable when connected to source of data that’s accurate and accessible by those who need to have them available at their fingertips. These systems are becoming more sophisticated in building hypotheses for data scientists and behavioral psychologists to recognize patterns in their workforce, and predict drivers of innovation, productivity, and high performance. But it is critical for organizations to focus on creating a taxonomy of skills that’s adaptive to their industries and new work design so the organization can benefit from consistent language on skills, capabilities and Human Capital value across all functions and businesses. This system of insights is a rich combination of data, business acumen, visionary leadership, and a dedicated skills management unit.However the level of access and how business leaders interact with these tools is also a critical success factor in building a skills-based economy and culture within an organization.

Systems of Engagement are comprised of platforms, management systems and strategic initiatives aimed at integrating transparency, direct-access, and culture within the workplace as a community that’s vital for the sustainable human performance of a company. Talent Marketplaces are evolving to become a system of engagement in which skilled professionals access their own skills, understand the emerging skills, roles that may be adjacent to their current positions and so forth.  Talent Marketplaces are incorporating systems of insights, taxonomy, and ontology of skills, as well as bringing the marketplace in by providing a view of what’s happening within the industry of an organization. This kind of platform can become the central source of information for the workforce and greatly accelerate internal mobility, skills access for teams, and serve as a true career development system for all involved. A system of engagement is also the formal and informal methods Human Capital leaders use to design approaches to talent self-identification for top talent development programs, find hidden figures with capabilities beyond their roles, and engage the whole workforce as leaders of the future-ready organization.

By building a talent architecture around these three systems, Human Capital leaders will have more capacity to do high value work such as support the development of organizational capabilities, design the new organization, and redesign work within the full spectrum of skills and talent pools available to the organization. Allowing all members of the community to raise their hands for a spot as a top talent, and/or pursue leadership positions in product, distribution, or functional management, Human Capital Management becomes a shared accountability between organizational leadership and members of the workforce. These new ways of interacting with employees will demand new ways of thinking about Performance Management, Talent Management, Talent Acquisition, and other programs that may not be as dynamic as the new world of work demands. Employees are discerning in their assessment of the companies and leaders they work for as well as what roles will provide them with meaningful work and autonomy to exercise their talent and skills.

In summary, HR must assume the role of a value-driver in business and focus on Human Capital strategy and management as an essential capability in their organizations. To do that, functions will need to work in a more integrated fashion, apply critical thinking, sense-making and upskill on agile org design to become the advisors and strategic partners that combine digital dexterity and analytics while providing real value in composing the most productive workforce models for the goals of each business. The Human Capital Leader of the future will be an ambidextrous professional able to work at all levels of an organization with the ability to connect the dots that comprise a high performing community of people within a dynamic environment. Theformation of ecosystems, partnerships, new workforce models and strategic talent management systems will define winners of the new era in business. In fact, some of the roles already emerging in Human Capital Management are Head of Talent Access, Head of Digital HR capabilities, Head of Skills & Careers…just to name a few. If the half-life of a skill is between 3-5 years, we must think that we only have two-three years to engage and excite the workforce before they decide to move on to the next phase of their careers elsewhere. It is an exciting moment in Human Capital Leadership and there is plenty of innovation to explore. Explore, Experiment, and Empower your teams to achieve the next generation Human Capital Leaders.

The views and opinions expressed in this article are those of Wagner Denuzzo,LCSW and are not endorsed by, and do not necessarily reflect the views of Prudential Financial. 

Agile

Financial

Machine Learning

HRIS