8 min read

The worst-case scenario: Losing a human resource.

“Every organization, company, your boss, colleague, or probably even your neighbor talks about Artificial Intelligence, Big Data, newest technologies, its possibilities, and limits. We all hear, read, and think about how it will change the way we live and work. It influences all aspects of our lives and businesses, whether we want it or not. Human Resources are not an exception.”

HRForecast & ESCP Europe Business School Study, 2019

The worst-case scenario: Losing a human resource
surplus and deficit of workforce

“Humanity needs to improve its mental and physical capabilities to deal with an increasingly complex world around and to face new challenges such as space travel,” said Stephen Hawking.

Skills in deficit.

It remains to be seen whether personnel management is on the same level of complexity as space travel. But the topic is certainly complex, especially if you focus on the dimension of ”skills” and what skill management involves.

The management of human skills and qualifications is in fact what is called skill management. It is directed at all those who are ready for change and who are willing to actively participate in shaping business success.  

Skills are determined by three variables

The labor market as an external influencing factor, innovation, and organizational modifications. According to these variables, the content of skills is changing. In the past, hard skills (technical qualifications that are imparted through studies, training and practical experience and are assessed through certification) and soft skills (social, communicative, personal, mental competence, leadership competence, implementation competence, plus hobbies, experience, interest) now are interlinked to the digital, technical and personal professional skills. 

lack of future-oriented skills

The most serious skill crime of all — the lack of future-oriented skills.

 

It is common these days to hear people talking about skill gaps. A skill gap is a gap between what employers want or need their employees to be able to do, and what those employees can actually do when they walk into work. But in the reality, the biggest and most dangerous skills gap of all is the gap between our employees’ limited or nonexistent awareness of themselves as economic units, and the reality of the world we are living in now.

More and more the skills are not in line with the demand or there are too few candidates with the right skill profile. Not only the small companies are feeling the changes in the employees’ structure, but also the largest corporations, which have never faced such challenges before. 

Frequently candidates apply without the right profile picture. This is also because the top-down concept does not work and the employee must be involved in the skill management process. A high degree of self-responsibility and motivation must be present in the personnel to develop with the working world.

For a business to succeed in the new world 4.0 it is critical to know the answer to the following questions: 

  • Do the existing roles and skills in the company correspond to the upcoming challenges? 
  • How does demographic change affect the range of roles, products and services, and the know-how process? 
  • How can the expensive purchases or enticements of external employees be avoided and assignments to key positions of external employees be filled by internal employees? 
  • How does the current career path change from employee to target profile? 
  • Does the company have the right mix of competencies in key projects?
  • Personalized learning journeys with Artificial Intelligence

As you see, every point is directly linked to the skills available in the company. The world 4.0 brings with it ever new technological developments, which in turn dictate fresh concepts in work. One such concept is a personalized learning journey supported by Artificial Intelligence. It makes it possible to make skills transparent, find employees with particularly future-oriented skills, reduce fluctuation, and provide the existing workforce with further training and retraining in a good time.

We at HRForecast have the authority to analyze millions of data, i.e. from HR-specific job postings, portals, patents, skill catalogs worldwide to examine how far HR is adapting to the changing business environment. We have seen that in a business landscape where digitization changes both society and the economy at an ever-accelerating pace, the effective use and application of big data, robotics, A.I., and Internet-of-Things (IoT) have become the key challenge for companies to drive sustainable and profitable growth. 

Hence, it is important both for the companies and specialists to recognize future skills and exploit the potentials from digitization together. 

skills at the interface between humans and machines

Future-oriented skills are the skills at the interface between Humans and Machines.

Most activities at the interface of humans and machines require that employees solve new tasks (e.g. train a chatbot). But they also require that the same tasks are solved differently, such as the use of a chatbot to improve customer service. So far, only a few of the companies pursue their business processes intending to rethink the collaboration and optimization of human and machine intelligence.

The lesson, however, is clear: companies that put A.I. first and foremost in order to replace the staff, give away large parts of the A.I. potential. Such a strategy is wrong from the start.

The leading companies of the future will be the ones who know how to combine the intelligence of people and machines and how to transform their operational areas, their markets, and the workforce.

What are the fusion skills examples?

  • Competence to delegate specific tasks to machines to create a “co-skeleton” that will support both parties. Thus we gain a rehumanizing time (more time to dedicate toward more “human activities,” such as increasing interpersonal interactions and conducting creative research) 
  • Competence to combine people’s strengths with those of machines to come to the results which are not in the power of neither single human nor machine. Holistic (physical and mental) melding. In the age of human-machine fusion, holistic melding will become increasingly important. The full reimagination of business processes only becomes possible when humans create working mental models of how machines work and learn, and when machines capture user-behavior data to update their interactions.
  • Competence to ask the A.I. agent a very precise question in order to receive the desired information. It’s imperative to have the ability to ask machines the right “smart” questions across multiple levels.
  • Competence to control that A.I. system is being responsibly used in a legal and ethical framework. Judgment integration
  • Competence to empower the bots. A variety of bots are available to help people be more productive and become better at their jobs. Prepare to embrace the power of A.I. agents to extend your capabilities, reinvent business processes, and even boost your professional career.
  • Competence to scale and farther forecast
  • Competence to discover the unknown or little known areas within a company or field
  • Mental acuteness, because even if we succeed in creating new working places, new working spheres, upskilling the workforce, a human itself should be emotionally strong and resistant to live in such endless transience.
workforce surplus

People in surplus.

Undoubtedly, the case scenario with skills loss would initiate the surplus of unclaimed workers, who abandoned the attempt to move with the times but claim salaries much higher than the level of skills they possess.

In a time of pressure from the job market, with its countless job titles and a global oversupply of training opportunities, employees feel confused and lost rather than well provided for. This can be illustrated with the following figures:

In Germany alone, there were 1.2 million jobs for which there were no suitable applicants in 2018; this corresponds to two unemployed people per vacancy. And there are also around 50,000 people per year who are retrained.

 ZEIT ONLINE 2018 ; Pilgram 2018

 Mai 2019

prevent losing top talents

Prevent losing top talents.

Buzzwords such as “shortage of skilled workers”, “war of for talents” and “demographic change” are increasingly appearing in discussions with managers. However, if one takes a close look at the respective companies, it can often be quickly established that systematic, targeted personnel development is rarely synchronized with the strategic objectives of the company. However, since the state of current in-company continuing vocational training still rarely provides the highly professional, modern, and time-saving further training or retraining opportunities, the motivation and commitment of employees drop drastically, and often the wrong or missing skills management is partly to blame.

The reasons why this might happen to even a big name brand

Even household brands – who have no trouble in attracting talent – fail to have a successful talent management strategy in place. Why it might happen?

43% of Millennials think that they will leave their current job within two years. A meager 28% plan to stay any longer than five years. Gen Z respondents expressed an even lower level of loyalty with 61% envisioning leaving their current job within two years.

Deloitte Study 

  1. Not listening to the individual. Poor flexibility or diversity

One of the biggest reasons for this desire to make a change is workplace culture. Respondents were seeking jobs with greater flexibility and better diversity. This is only amplified in a company where pay is not at the top of the scale. 

  1. Lack of career development and engagement 

Large firms can often mistakenly assume that a strong salary and benefits package is enough to engage their best talent. Of course, monetary reward is important, but it’s not the only type of reward sought. Most employees will want to know there’s a genuine opportunity for career progression and ongoing development in their role. Failure to provide a clear career path with the company can soon lead to disengagement.

  1. No quality benefits package

Well yes, employees want a quality benefits package. In fact, many employees will accept a unique benefits package in lieu of higher pay. From flexible work hours to extra vacation time to student loan repayment management, there are numerous ways you can retain quality talent with benefits that no one else is offering.

  1. Poor challenge-feeling 

Do you provide unique challenges for your employees? When someone begins to feel stagnant in their job and they see no room for growth, they will begin to look outside your workplace for new opportunities. Those with the most talent will be the least content in a job that offers no room for improvement.

From allowing an employee the ability to take on new tasks to providing ongoing training opportunities, it is vital that you give your staff a room to grow. If you realize that numerous positions in your workplace offer no ongoing challenges, look for ways to change that. While we all enjoy the easier aspects of our jobs, we also all need to be pushed a little to feel valuable and remain interested in our jobs.

  1. Ineffective leadership that is driving talent away

At every level, there needs to be robust leadership in place. A lack of strong, consistent management is a prevalent reason for an employee exodus. Organizations must ensure that their employees are equipped with good leadership, inclusivity, and communication skills – which may involve additional, ongoing training.

A big struggle for many business leaders is allowing employees to handle tasks that were once their own. Are you hiring talented individuals for duties you once handled and then overturning their decisions in that role? If so, your inability to let go will cause the best employees to leave. Someone passionate and good at what they do does not want to be micromanaged.

worst-case scenario for human resource

What’s the line on it?

The only thing that doesn’t change is change. It means (let us quote the woman who was far from HR but near to the business), “In order to be irreplaceable one must always be different” (Coco Chanel). If you want that job, go and learn for it. If you want to turn your career path around, go make it. If you want to become the top specialist, you must always upskill yourself. Just realize, there is no other way except for step forward, and a new one is always higher than the previous one, so the effort must be greater every single day. 

HR is a key player at the crisis management table.

The main task of HR is to fill the right people at the right time in the right place with the right skills and at the right cost. But in practice HR is perceived differently: it is generally seen as slow, outdated, or too administrative, sometimes even without any discernible added value for the business.

We at HRForecast are here to change the focus of HR towards (re-)qualification, further education, and skill management, where the real value is being created. 

As leaders in People Analytics, we support the working world with smart solutions for complex issues across the globe. We are here to answer all your questions on how your business can benefit from Labor Market Analytics, Market Intelligence, Talent availability in the context of Digitalization.

Get in touch with us and ask us about any challenges you are facing right now. Let’s shape the future together!

Let´s start the rocket!