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Enabling Productive Human Capital

  • July 2014
  • 22 pages
  • Frost & Sullivan
Report ID: 2267546

Summary

Table of Contents

New Methods and Tools Help Companies Cope With Changing Workforces, Work Environments, and Regulations

Human capital management (HCM), encompassing human resources (HR), is evolving. Companies are hiring more workers than they shed as the economy emerges from the downturn. There are changes in demographics, in employee expectations, in how and where work is conducted, and in laws and regulations that impact employee benefits, management, and recruitment. Fortunately, technologies and methods have been evolving that can help companies meet their HCM needs.

Introduction
Human capital management (HCM), encompassing human resources (HR), is evolving. Companies are hiring more workers than they shed as the economy emerges from the downturn. There are changes in demographics, in employee expectations, in how and where work is conducted, and in laws and regulations that impact employee benefits, management, and recruitment.

In order to enable a productive workforce, companies must figure out how to orient their HCM programs, HR, and site selection strategies. Fortunately, technologies and methods have been evolving that can help companies meet their HCM needs.

But HCM practices have a larger impact beyond individual companies, and by the same token, shifting trends affect companies’ HCM policies, performance, and outcomes. HCM is impacted by most of the key Mega Trends identified by Frost & Sullivan, notably social trends, but also including urbanization, connectivity and convergence, “smart is the new green”, and the future of mobility.

HCM Trends There are several trends that are affecting workforce availability, composition, compensation, and career planning in North America. Consider the following:
More Hiring and More Applicants

Companies are recruiting to fill new positions that have been created from a slowly rebounding economy. Many of the positions, they are filling were held by retiring “Baby Boomers” (individuals born between 1946 and 1964). Meanwhile, stronger employment prospects are encouraging more applications from new workforce entrants, laid-off re-entrants, and individuals changing jobs.

Smaller Labor Force
According to sources, the volume of exiting employees is surpassing the volume of workforce entrants, resulting in a smaller labor force. At the same time, the population is increasing at a slower rate than in the past, and the population is aging, both of which have led to a decrease in the labor force growth rate.

Limiting Headcount
Companies are buying automation hardware and software and workforce management solutions, which are becoming more feature-rich and affordable, through cloud computing, simplified design, and contract manufacturing.

Consumers seeking greater convenience, speed, and service are also helping to drive the automation trend. Examples include ATMs, electronic toll collection, kiosks, self-service checkouts, ticket vending machines, and automated chat, SMS/text, and mobile and Web customer service. A recent Frost & Sullivan research report ranked Web self-service as having the highest level of customer satisfaction, ahead of service provided by customer care personnel.

Companies also continue to offshore IT, manufacturing, and less culturally sensitive customer service jobs. While some companies have repatriated their manufacturing and customer service, they have employed automation to contain the number of “new” hires.

These trends, combined with a slow growth economy, will trim labor demand. For example, Frost & Sullivan forecasts that the total contact center seats (agent positions) in North America will slightly decline from million in 2013 to million by 2018. Attitude Changes Regarding Careers The massive scale of layoffs and corporate reorganizations that occurred amidst the downturn disillusioned many existing and would-be employees. Most employees no longer expect to work for one or two employers for their entire careers, or even expect advancement opportunities.

Instead, more employees see themselves as contractors, and they are taking more control of their career paths and development. Employees will “fire companies” if they find employment with other employers that offer more compensation, a better work environment, more interesting work, and greater flexibility.
Employees also have learned to pay closer attention to corporate changes that could affect their jobs. They use the Web and social media to find desirable employers, see which companies are sinking and which are rising, and find out about possible mergers and acquisitions (M&As). Accordingly, employees are continually updating their resumes, social profiles, and their contact lists, and the savvy often apply for new positions before their present positions disappear. There also are changes within the workplace that are affecting many aspects of HCM:

“Workplace” Redefined
Work is becoming more information-oriented, with more tasks that can be accomplished through computers and wireless devices. More employees are able to work from home (telework), while mobile (from the field), and in dispersed teams located in formal offices and in home offices. Frost & Sullivan reports that approximately 30 per cent of respondents to a recent survey work from home at least part of the time.

Companies are adopting remote and dispersed team working to improve productivity, ensure business continuity, and above all to attract and retain quality talent, but without the labor market barriers of location, commuting distance, and long commute times. Some work teams are globalized in order to tap a wider pool of expertise, and to obtain added national or vertical market contacts and knowledge.

There is a growing array of technologies and practices that facilitate remote and dispersed working. These include residential broadband and VoIP, smartphones, browser-accessed software, secure remote access software, and unified communications and collaboration (UC&C) applications. Managers now use performance management and workforce management applications to supervise and schedule staff, regardless of their location. Managers also have learned to involve remote workers in all corporate and team communications, including meetings through conferencing.

More Continuous and Virtualized Training Career training has evolved into continuous virtualized training before and while working. This practice enables companies to maximize the value from personnel investments and reduce staff churn. Enabling continuous training has been the rise of Web and video eLearning, including through YouTube and other downloadable clips, and remote instructor-led training. These solutions minimize the need for individuals to leave their desks or homes to attend classes as required with traditional training.

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