Agility in human resources (HR) is just as crucial as being agile in the information technology sector. According to a report by McKinsey, integrating agility holistically in all departments, across all units, and in the way you look at resources, such as labor, is crucial if you want to thrive in today’s global market.
Traditional HR is ownership-focused
The traditional view of HR is that it’s all about job requisition and talent retention.
The job requisition process looks like this: The job description and role qualifications are specified, formulated, and shared across recruitment platforms. Once candidates are chosen, they’re invited to interview and then passed along to hiring managers, who make the final decision.
This process takes 42 days on average, according to the Human Capital Benchmarking Report from 2016. After that, it takes about eight months for a new employee to reach their full productivity, according to a study from Harvard Business Review.
If you’re an employer, this gives you approximately nine to ten months before your new hire is operating at a profitable level. Many HR leaders recognize that this process is inefficient but argue that the process should be viewed as a long-term investment. Unfortunately, that’s the wrong way to look at it, considering the game changers we are currently experiencing in the labor market.
Technological developments are disrupting the traditional labor market
Automation, artificial intelligence, and robotics are becoming more integrated into our daily lives.
This trend is dismantling conventional employment, and creating a more disrupted workforce, focused on shorter and more flexible jobs. According to the IDC, in the next five years, 45 percent of all workers in Europe will be self-employed, either entirely or in combination with another job.
This trend is already prevalent in the EU, where the freelance segment is the largest growing segment, according to the European Federation of Inland Ports (EFIP). This trend, combined with the fact that almost 33 percent of new hires look for a new job within the first six months of being hired, makes traditional retainment-thinking unsustainable.
Combine that with the fact that 23 percent of new employees leave the company before their first anniversary, according to numbers from Harvard Business Review.
Agile HR as access-focused
I challenge HR leaders to think of recruitment and retainment as an agile process consisting of dynamic elements that can quickly adapt to new challenges and opportunities. In today’s world, HR is about accessing the best talent, not about "owning" them.
How do you do this?
You tap into the market trends and start thinking about how your company can benefit from the rise in the liquid contingent workforce.
For example, your company might need a software programmer for a new elaborate feature on the website or in demand of someone who can take care of the graphic design. Project-specific tasks can be completed efficiently by hiring qualified freelancers to do the job.
Hiring freelancers allows your company to scale up and down according to its business needs.
Agile HR is about adapting the hiring model to fit today’s market, not totally discarding traditional full-time employment. It’s about looking at your business’ needs and identifying how to solve them most efficiently.
Winning in this market is also about agile HR departments organizing themselves into small, cross-functional teams that mobilize quickly, are flexible, and can adapt to changes rapidly. Big annual plans act as constraints rather than enablers, and comparing work output to quarterly goals is no longer viable - an outdated method.
Instead, agile HR departments focus on how they contribute value to the company and the end-user in the fastest way possible.
There’s a true benefit to being agile in HR
Research from McKinsey shows that agile organizations have a 70 percent chance of being the top performers in terms of organizational health, the best indicator of long-term performance.
Thirty percent of European enterprises will, in the next five years, move from traditional talent sourcing strategies and models towards digital and task-oriented approaches, integrating online communities and platforms to acquire skills and temporary staff, according to IDC. The front-runners in agile HR will be the ones most likely to stay competitive over the long run.
Is agile HR part of your company’s strategy?