For years, the core focus areas of HR departments was limited to ‘hire, pay and manage administrative tasks’. In the recent past we have seen the evolution of HR technology and intelligently designed applications to manage multiple HR workflows, succession planning, employee performance analysis with HR analytics, onboarding, etc. In a nutshell, a radical shift in the employee and employer relationship is underway. Modern HR technology is gradually establishing itself as a pivotal tool for companies to augment employee engagement and mitigating risks.
The latest report of I4CP, Beyond Uber: Driving the Evolution of Work, also supports this observation. It explains how technology has impacted the employee-employer relationship, which is gaining momentum and here to stay. The report is based on the interview of 80 prominent business executives and two key findings of the report are:
- 95% of the executives interviewed are already using more nontraditional (and non-employee) skilled workers.
- 95% of executives interviewed for this study cited government regulation as the primary barrier/inhibitor to this evolution of work.
Evolution of nontraditional workforce
Uber’s success story and the idea of sharing economy have inspired many budding entrepreneurs, who are now heavily reliant on contract workers or non-traditional workforce that includes millennials and Generation Z. This workforce demands a new style of HR workflows, focused-on personalization and customization of work and the workplace. This new workflow also includes elements such as mobile work spaces, dynamic career paths, rewards and incentives.
These developments signal and nurture the new trend of self-employment and self-management, and require constant monitoring by lawmakers. You can learn more about this nontraditional workforce in our last blog, ‘Sharing Economy’ vis-à-vis Labor Laws.
Unconventional Factors Driving HR Workflow
According to the I4CP report, top five unconventional factors, driving the HR workflow, include the economy, demographic and lifestyle changes, technological advancement, skill shortages and government regulation. The report further explains three characteristics of economy which are driving HR workflow:
- The starving economy, which is also referred as the sharing economy. Some HR leaders argue that people are looking for freelancing jobs because they can’t find full-time jobs that provide the standards of living they seek. Subsequently, it germinates the concept of “sharing economy”.
- The gig economy, where the word “gig” is coined because workers can potentially create a living through a patchwork of contract “gigs”. It is indeed an unleashing innovation, but is simultaneously igniting debate over the definition of full-time employees and contract workers.
- Winner-take-all economy: This concept is based-on the observation that no one works at the same organization for life, and there is much less loyalty between employers and employees than in past decades. The lack of job security indirectly creates incentives for the most talented employees to take their talents elsewhere. The result is a winner-take-all economy.
Regulations as a stumbling block
On one hand, the U.S. government has made it easier for workers to be part of the growing nontraditional labor force with the passage of the Affordable Care Act and access to other portable benefits, such as retirement plans and health savings accounts. On the other hand, new regulations make it harder for employers to utilize this source of talent.
Almost every executive, interviewed by the i4CP report, mentioned growing co-employment regulation as the biggest stumbling block threatening to inhibit organizations’ effective use of nontraditional workers. They further said that the current regulatory environment prompts them to be cautious in how and why they tap into this growing nontraditional labor force.
In many companies, the HR team is working closely with both the finance and legal departments when contemplating any move to utilize more contingent or contract labor.
Solutions for evolving HR workflow challenges
Evolution in the HR processes is set to redefine the HR functions – more focused on rigorous workforce planning to drive talent strategies and take purposeful action to mitigate business risks.
HR leaders shall certainly be the catalyst for optimizing organizational and employee performance. To ensure success in this new strategic role, HR leaders must work effectively with the business to accurately define business goals and associated workforce needs. This requires projecting future skills and staffing needs. This reimagined approach, while still encompassing the supply/demand projections, forecasting and gap analysis, takes the process to new levels.
The collaborative and strategic role of HR professionals is set to take center stage in 2016 with the evolution in HR workflows. For example, instead of forming a team that is fixed to a place, the organizations may allow their employees to be more distributed. Employees may have greater freedom to work from home and may evolve new ways to measure productivity, activity tracking and time and attendance management. As a technology provider, we are keenly following these developments and are building innovative solutions to map these new ways of working.