In light of economic uncertainty, global talent crunch and rapid advancements in technology, these changing times call for HR professionals to propel their endeavours and reconstruct the human capital framework, while circumventing strategies to navigate through the complex future of work and workforce demands.
In an exclusive interview with Edward Houghton, Research Advisor for Human Capital Metrics and Standards, CIPD, we at HR in Asia seek to understand the nuances of human capital framework, HR analytics and need for human capital metrics, risks and opportunities presented by the technologically gripped future. Read on…
HR can step up to the workforce analytics challenge by investing in building internal analytics capability, and ensuring that the right technology is being implemented across the function. HR professionals have a crucial role to play in enabling organisations to make effective decisions by using people data.
Only by ensuring that the function has the capability in place and is producing business relevant analytics insights, will HR meet the complex needs of future workplaces, and deliver meaningful insights for business decision-makers.
Edward Houghton, Research Advisor for Human Capital Metrics and Standards, CIPD
Asia-Pacific faces an unprecedented challenge to leverage regional expertise and continue to drive the aspirations of global organisations that operate across the region. Given that the economic outlook across the region continues to be uncertain, with areas of high-growth slowing down, the human capital potential of the region still remains high.
Education levels across the region show that there are many high-calibre individuals entering the workforce, and so the region has the opportunity to create value by leveraging their expertise. There are however continuing issues regards access to education and sustainable employment: low-skilled labour across the region continues to mean many individuals are not reaching their potential. There is a risk of missed-opportunity if organisations do not make the most of individual talent.
Creating human capital dashboard that is produced on a quarterly basis is one way by which the key performance indicators that describe human capital can be transparently communicated throughout the business.
The dashboard is also an effective way to hold senior leaders to account, to demonstrate their awareness of the key human capital risks and opportunities in the business, and to demonstrate to the workforce, how HR practices are making a difference to the business.
Quarterly communications, including a narrative that describes the change over time of key human capital data, can be a good opportunity for employers to demonstrate, what they are doing to mitigate against human capital risks and leverage any opportunities that are presented to them.
As the nature of work is changing, there is a need to evolve the human capital framework to one that is fit for the future. A technology enabled and facilitated workplace will radically change the way organisations approach human capital management. In this future HR must continue to be a strategic function that uses its expertise to drive effective people management practices, and acts as a knowledge-partner in the business regarding human capital terms.
An updated human capital framework is needed to help steer organisations towards a more ethical and sustainable approach to people management: one which ensures that the knowledge, skills and abilities of individuals are fully measured and understood, and that promotes the empowerment of the workforce to deliver value through their work. Important constructs such as health and wellbeing should be central to this framework.
See: What will be the Future of Human Capital Management?
It can be difficult to know how to apply human capital measures, particularly if you are operating in a complex and rapidly changing environment. HR professionals are important custodians of people data, and as such should look to formalise their approach to human capital metrics, and where possible standardise the organisation’s approach to do this.
This is why we have created the Valuing your Talent initiative, a programme developed to help HR, finance and business professionals better understand the importance of human capital data, and to provide them with the resources and expertise to apply effective measures in their business.
With various resources detailing different approaches to human capital measurement and reporting, the Valuing your Talent programme also includes the Valuing your Talent Framework, a tool developed by the CIPD in partnership with CIMA and Lancaster University. This tool details the measures that HR professionals should take to develop the approach to strategise human capital management.
The framework includes standard definitions, examples of measures being used in practice, as well as links to other resources from partner organisations such as McKinsey, which shows how different tools are being applied across the HR profession to develop new approaches to people measurement and reporting.
A major barrier for many organisations is technology, which is operationalised in many organisations as a piecemeal and in a highly fragmented way. Many organisations struggle because they don’t have systems that capture and standardise data across the business. Also often HR professionals might invest in a system, only to find that it is the quality of the data itself which is hampering the production of useful business insights.
Our research Evolution of HR analytics: perspectives from Singapore, Hong Kong and Malaysia illustrated that there is lack of capability in the region. HR functions across the region should look at investing in individual capability, as well as solving the technology challenge.
The Valuing your Talent Framework details various measures that organisations can use to understand the quality of outcomes, resulting from their recruitment and retention practices. It also offers measures that can be applied to understand the quality of hire while mapping the quality of skills required to those, which result from recruitment practices.
Particularly useful data may also come from new-hires who have experienced the process, conducting focus groups with new hires as they complete the recruitment and on-boarding process is one way by which the employee experience can be measured and potentially improved for efficiency and quality purposes.
HR professionals in Asia are in a fantastic position to be part of an evolving profession, which will be central to the success of many organisations. As the economies of the region continue to become more knowledge-based there will be need for strategic HR to step up and drive high-quality human capital management processes across the board.
For those high-turnover environments in retail and manufacturing, operational capabilities are likely to be augmented with technology. This will help make the role of HR professionals easier and more effective. There are many key issues that will affect the region, such as the challenging nature of work on a global scale, growth in technology, globalisation, and the ageing workforce. HR professionals will have to utilise their professional skills to address these challenges and enhance the opportunities available for the organisation and its people to perform.
HR can prepare for the changes that are going to impact their organisation by ensuring they stay up-to- date on the developments within their organisation, as well as macro-economic issues affecting the region.
Working across the network of HR professionals, such as those which the CIPD provides, is an excellent way for HR professionals to remain up-to-date of the developments in the profession. Through added qualifications and membership, HR professionals can improve their ability to operate in complex and challenging environments.
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Also read: Top 7 Priorities for Optimising Human Capital in Financial Services
