Human Capital Management: the need to link people with enterprise processes in the “new normal” economy

If the pandemic taught us anything, it is that the future of work is already here, with many organizations needing to manage people in multinational hybrid environments. It is imperative, therefore, that managing people become an even more strategic component of an organization.

HCM is a necessary tool that enables traditional staff management plus the new skill development and project/organizational oversight that is crucial in an intelligent and dynamic environment unbounded by time or physical space.

In their latest Technology Spotlight, IDC attempts to show how modern HCM systems can be used to create competitive advantage. Here are some of the highlights from the report.

The five drivers of HCM technology in the post-pandemic marketplace

As organizations continue to regroup, they’re conscious of the need for a new level of agility – especially as pertains to their workforce. In a hybrid work environment, workers aren’t just in the office – they’re working both in person and side by side with “digital coworkers” – both their own remote colleagues and, increasingly, automated processes driven by AI and machine learning.

This shift presents some obvious advantages – but requites entirely new working environments, organization structures, and metrics for success. IDC believes HCM will play a critical role here: particularly thanks to these 5 trends:

1. Uncertainty.

The pandemic showed that the last generation of HR tools simply can’t cope with evolving market dynamics. Workforce management is becoming a real issue, especially as talent becomes more and more scarce and turnover rates rise.

2. The need for flexibility

IDC predicts that in the next 2 years, 75% of the G2000 will have committed to providing technical parity to a workforce that’s hybrid by design – enabling staff to work seamlessly together regardless of their locations. HCM will be a critical component of managing this new workforce.

3. HR transformation

The shift to a hybrid workforce demands new workstyles and skill sets. Managing these will make HR transformation just as important as digital transformation across other parts of the enterprise.

4. The shift towards outcomes-based leadership and organization

Traditional siloed and rigidly hierarchical structures that are function focused rather than outcome focused limit speed, agility, and value creation. Talent management must create an environment that helps invigorate organizations with agility, intelligence, resilience, and the empowerment of people.

5. Security, privacy, and trust

Managing security will be a key component of workforce management as long as the workforce needs to access resources. Organizations are also increasingly beginning to understand the importance of a well-managed and engaged workforce, and how trust can be built through technology that works well.

IDC predicts that by the end of 2021, 71% of organizations with mature employee experience programs will have returned to pre-2020 growth trajectories – compared to just 29% of those that don’t have such programs. This fact alone should underscore the importance of robust HCM solutions and strategies for the coming years.

Seven questions organizations should ask themselves when considering new HCM solutions and vendors

• Does your organization have an enterprise-wide strategy for people management that aligns with business goals? If so, what aspects of your current technology solutions help or hinder this strategy?
• Do you plan on integrating HCM into your other enterprise apps? If so, how, and to what extent? Can your current solutions provide you with the level of integration your business needs to operate efficiently?
• How important is staff expertise and experience to your delivery of services to customers? Does your current HCM approach allow you to manage skills effectively, and ensure the right staff are deployed on the right projects at the right times?
• How does HCM manage people in a hybrid working environment? Is it equally adept at handling remote, onsite, and work on the move? How does it function across multiple countries and regions?
• How does your proposed new HCM application handle payroll, tax, and compliance issues? Can it successfully manage these considerations in every jurisdiction where your people will need to work?
• How are your employees trained? How is their knowledge added to the organization to help fulfil its mission?
• How is your new HCM application going to be managed on an organization-wide basis, line-of-business basis, and per-project basis?