HR and Human Capital Trends and Challenges for 2015

By Wilhelm Crous, MD of Knowledge Resources

2015 will bring its own joys and challenges. It’s difficult, if not impossible, to forecast the future and to spot black swans in advance.

Who could have predicted the Ebola outbreak in 2014? The crisis in the Ukraine and the shooting down of the Air Malaysia plane? The meteoric rise of ISIS and Boko Haram? An oil price of $50 per barrel at the end of 2014?

Nevertheless, some trends are easier to forecast for 2015 than others. For instance, the lower fuel price will undoubtedly stimulate consumer spending and economic growth. Technology and specifically the digitisation of everything will continue to grow exponentially. Creating jobs will remain a worldwide challenge. And add to the crises in education and service delivery in our country will remain a challenge.

7 trends and challenges for 2015 you can’t afford not to know

There’s no question: The executives of today will have their work cut out when it comes to navigating the organisation through 2015. That’s why I’ve identified 7 trends and challenges for 2015 that the HR fraternity and businesses in general should pay particular attention to:

1. Expect the continued rise of the solopreneur

Writing for Forbes magazine, Micha Kaufman, stresses that with millennials now fast-becoming the largest demographic in the workplace, the growth in “solopreneurs” will drive the independent work revolution. The millennials (and many others) will want to pursue the work they’re interested, all the while maintaining flexibility. Kaufman quotes a recent study in the US that found 79%, of the respondents would consider quitting their traditional jobs to freelance.

In response to this trend, organisations will have to realise that flexibility is now key. Organisations will need to incorporate this trend in designing jobs for or attracting top talent on a more flexible and project basis.

2. Industrial relations will remain volatile (but not as volatile as 2014)

With the growth of Amcu, the split and turmoil within Cosatu and NUMSA’s move into the political realm, we can expect continued volatility in this arena. However, it is unlikely that the same turmoil experienced in 2014 will repeat itself in 2015.

From the conflict over the last few years, organisations have learnt they must invest in better relationship building, communication, working and living-conditions beyond the factory gate and provide training in financial-literacy. Furthermore, complying and adhering to the various labour laws is just the first hurdle to overcome.

Working proactively and continuously improving employee-relations and engagement will continue to be a primary objective for organisations in 2015.

3. Job creation will remain a top priority in 2015

For the last 30 years, job creation and unemployment has been a priority every year. Despite that, the long-term unemployment trend is just pointing one way: Upwards. The latest statistics soon to be released in our Human Capital SA 2015 report indicate that since 2008 more than 100 000 employers were eliminated.

In addition, only 325 000 jobs were created since 2008 while 3.35 million people were added to the job market!

What can be done? I believe there are three ways forward:

  • Companies should pursue organic growth strategies through innovation and export markets (especially in Africa). This will have the added advantage of kick-starting the economy.
  • Government should get out of the business of job creation. Governments all over the world, don’t create jobs in the most efficient and productive manner for the economy. Rather government should: Focus on creating an environment in which entrepreneurs and small businesses can thrive; ensure that the labour market is more flexible; reduce the tax rate for SMEs to zero for the first 5 years and eliminate red tape.
  • Municipalities need to work more efficiently and deliver on services. Maintaining and upgrading infrastructure can create a few hundred thousand jobs rapidly!

4. There will be a strong focus on developing women in 2015

Hillary Clinton, writing recently in the Economist’s World in 2015 states: “The evidence is clear that when women and girls have opportunities to participate (in the economy), economic grow and nations prosper. As a matter of fact the OECD (Organisation for Economic Co-operation and Development) recently found if we close the global gap in workforce participation between men and women, GDP worldwide would grow an additional 12% by 2030!

Although South Africa has made great progress in eliminating discrimination against women, much more can be done. Women are mostly underrepresented at the board and executive level. Developing women should be much higher on the agenda of HR Departments (even more so in other countries on the African continent!). The findings in our African Human Capital and Labour Reports, paints a dismal picture. After all, a country’s true human potential cannot be fully reached if the contribution of woman to society is under-valued.

5. The role of the HR director will change!

In two recent reports from PwC and Bersin by Deloitte, a call was made to HR Executives to take a serious look at the HR operating model and as Bersin has put it:  “Create a business-integrated HR delivery business model”. HR will then “drive the business plan for the future”. The same proposals were made in the recently-published book: The Role of the Chief Human Resources Officer, edited by Dave van Eeden. The only difference was these ideas were examined from a South African context.

To restructure and reorganise the HR department is a daunting task for HR executives. There is already more than enough on their plates! So where do they start?

I can make two suggestions:

  1. Start by answering the questions posed by Dave van Eeden in the Role of the Chief Human Resources Officer. Click here to access a copy online.
  2. Attend high-level events where HR leaders meet to discuss these issues and the future of HR. For instance, various speakers will address the present and future challenges for HR directors and executives at the upcoming HR Directors Conference in Cape Town. This will also serve as an ideal opportunity to discuss and debate different approaches with helping HR executives in commerce and industry. Click here to learn more about this event.

It is high time that the HR agenda play a bigger role in determining the company’s present and future strategy. This is however entirely dependent on the chief HR officers’ leadership and contribution to the organisation. The challenge for HR executives is also to invest in their own development as opposed to always looking after other executives’ development.

6. There will be a renewed focus on creating a more equitable society in SA

Apart from creating more jobs and a better education system, the level of inequality in South Africa must be tackled by government, corporations and civil society. It is now a matter of national urgency – a ticking time bomb.

How can profits be distributed more equitably? What about executive compensation in certain companies? Fighting corruption, unnecessary spending and wastage?

From government’s side greater consideration could be given to privatising parastatals such as Eskom, Post Office, SAA, etc. In doing so, a large portion of shares could be distributed to employees (to the lowest level) and a number of objectives can be met (i.e. the increase the net worth of employees, an improvement in the efficiency of the company) and in doing so they can become tax payers as opposed to being subsidised and bailed-out by taxpayers.

Will government take up this challenge? It remains to be seen.

7. Businesses will play a role in tackling the education crisis

If organisations want to thrive in a knowledge economy, the quality of our education output will have to improve dramatically. However, government alone cannot solve this complex issue.

Presently, companies are spending in the hundreds of millions on education through social responsibility programmes. These results are mixed at best. Therefore a better, more cost-effective solution with quicker results is required.

Part of the solution is quite obvious. It’s a known fact that the best intervention is at school principal level.

The challenge has always been how to develop an intervention that can be up-scaled to benefit the school, community and the organisation involved? In my opinion the solution now exists and it is already showing tremendous results.

I’m referring to Louise van Rhyn of Symphonia’s initiative: Partners for Possibility. This programme is delivering fantastic results, not only in the participating schools, but also the community it functions in. In addition, the companies involved are benefiting by developing their leaders through action-learning. Also, leaders are developing an appreciation for the realities and obstacles facing the underprivileged.

Read more about this initiative in: Partners for Possibility – how business leaders and principals are igniting radical change in South African schools. Knowledge Resources is the proud publishers of this book and as Trevor Manual recently said: “The Partners for Possibility programme is exactly what is needed to make the NDP real and take our education forward.”

Conclusion

We can’t predict all the factors that will influence the world of business in 2015. Nevertheless, I’ve outlined some of key the challenges that organisations will undoubtedly face in the coming year. And while the business environment will be tough in 2015, these difficulties also present numerous opportunities for companies who are willing to rise to the challenge. It is our wish at Knowledge Resources that this will be one of your most prosperous years yet!

Join us, this year at our upcoming 2015 HR Business Partner Conference, which takes place in Durban, Johannesburg and in Cape Town, we will address these and other critical issues to ensure you, as the HR Business Partner, will continue to be successful in your role. Please click here to have a look at the 2015 HR Business Partner Conference programme and to see the line-up of speakers:

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