Five major transformations changing the world and HR
Thirza Tooes, November 17, 2017
This is a challenge for all of us and also an opportunity to really think differently about what these changes will imply. Will full employment really be impossible or will we just have to redefine ...
Read More Sonia Gavira
November 17, 2017 11:01
Five key shifts that will define the global landscape, and consequently HR
“We’re undergoing massive transformation socio-economically, and that affects the currency of your work: people. [It affects] the ways in which they interact with and understand the world of work, the opportunities that are available, the fears that people have, and the opportunities that confront all of us,” said Alexander Betts, Oxford professor in refugee studies and forced migration.
Speaking at the CIPD annual conference, Betts explained that companies, and the people they employ, will have to navigate a world of great opportunity for markets but one that is increasingly polarised and socially divided. “The big changes we’ve seen over the last 18 months – Brexit, the election of Trump, rising populism, nationalism – are indicators of underlying structural changes that affect all of us,” he said. “These shifts are changing regulation, changing the picture of politics from one of a divide between left and right and between tax and spend, to one of globalisation versus nationalism.”
HR occupies the middle ground in that it deals with both the global and the local, sometimes simultaneously. While recruiting and training highly-skilled workers who benefit from globalisation, HR also has to consider people at the other end of the spectrum: low-skilled workers who are part of a declining wage economy and may be afraid of losing work to globalisation. “You will be navigating the fault lines that define contemporary politics and society,” said Betts.
Betts five major transformations are:
Betts spoke about Brexit and the huge educational, generational, and geographical divides present between those who voted to leave and those who voted to remain. He explained that the major emotive issues of the referendum – access to labour, immigration, globalisation, and quality of life – could also be seen in the US and French elections.
“This is a pattern that we have to navigate; a sense that we may be leaving people behind. People who identify as educated elites are not engaging deeply enough and vertically enough within our societies to recognise those challenges,” he said.
“We cannot arrogantly assume we can leave people behind, we have to engage people that don’t recognise and identify themselves with that global structure of interconnectedness. HR has to reach deeply into societies and overcome tensions rather than risk exacerbating that sense of competition.”
He urged HR to consider which tensions are being exacerbated, and which mitigated, by the ways it engages with surrounding communities. Betts also stated that to ensure no-one gets left behind after Brexit companies will have to work collaboratively; both internally and with each other.
Betts explained that around 3% of the world’s population are migrants (that’s 230 million people). He said migration is truly global, and happens for a variety of reasons including work, family, education and lifestyle. This affects HR because it affects the war for talent, particularly for countries with highly restrictive visa and settlement legislation.
“I think we should really be very concerned about countries that are imposing greater restrictions on high-skilled migration,” he said. “It’s a reflection of politics being privileged over economics. The economics tell us that high-skilled migration is unequivocally good for society. Low-skilled migration is a more mixed picture; it tends to benefit businesses but have mixed social effects.”
He suggested HR will have to focus on ensuring UK organisations remain as or more attractive than other countries. Again businesses have an opportunity to work collaboratively to petition government for mobility-friendly legislature, he said.
Many OECD countries are seeing their ageing populations getting much larger (a trend that will only continue with declining birth rates). Betts described it as a “population time-bomb” that will affect the tax contributions and social responsibilities of both employees and employers.
“One estimate from the UN Population Division is that by 2050 in Europe there’ll be just two working-age people per elderly person,” he said. “Some 43% of people in the UK have no pension at all. Eighty-eight per cent have less than £30,000 in their pension pot. And this creates a huge challenge for how we think about retirement and pensions planning.”
He said HR will have to think harder about responsible pensions policies, not just relying on the statutory background, as well as how to support a range of generations in the workplace, and how to ensure the skills of older people are not lost.
While technology enables globalisation and collaboration, it threatens many people’s ability to sustain their current jobs. Betts pinpointed the Internet of Things, the sharing economy, robotics and AI as being transformative for the world of work. However, he warned that these developments will inevitably make full employment impossible.
“If we’re to confront the emerging tensions and divisions in our society we need to ensure that those that have lost work through the collapse of labour-intensive manufacturing have alternative opportunities,” Betts said. He suggested it will be down to society to make sure everyone has a decent standard of living in a world without full employment, perhaps through a Universal Basic Income.
Regarding HR more specifically, he said: “If only a proportion of our societies in the future will be able to sustain productive viable work we’ll need to think about contributing to those safety nets that allow people to participate in productive life in a broader sense than just the traditional idea of being human capital applied to physical capital.”
Throughout all this change people’s values and motivations shift. One area currently extremely divided is people’s attitudes to the economy.
“With austerity, with polarisation politically, more people are seeking a ‘tax more spend more’ economy. We see that in increasing support for the Labour government and particularly the politics of Jeremy Corbyn. It shows a demand from people who feel alienated by the economy for a society that can support them and offer a safety net,” explained Betts.
HR and business more widely needs to take this seriously if it doesn’t want an environment that’s over-regulated.
What people want from work has also changed. Job security is more important in a world of increasing employment precarity. HR can help people navigate multiple careers over a lifetime. Stress is higher and the quality of the work environment has more impact on people. These are of course all areas HR can influence and improve.
Betts finished his session by issuing a challenge to HR: “People live in a very different world today and they face very different fears and challenges in their work. You sit in that space that’s defining politics – between those that embrace globalisation and those that fear it. And I think it’s important that you think creatively and innovatively about how you are going to plan the future for the area you work in and the sector as a whole.”