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The ‘Radical Reinvention’ of Human Resources

January 13th, 2021

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Now is the time for a “radical reinvention of human resources,” declares a report from IBM’s Institute for Business Value.

Businesses are adapting to the rapidly and dramatically changing world, says the report, prefacing the findings and recommendations from a survey of more than 1,500 HR executives from a variety of industries.

How they engage with employees must also change. “Enterprises now must become inherently humanized, build engagement with remote employees, foster trust in uncertain times and cultivate a resilient, diverse workforce capable of facing whatever the future may hold.”

This, says the report, is HR 3.0.

HR thought leader Josh Bersin, who collaborated with IBM on the report, explains what that means in his introduction:

“Traditional HR 1.0 departments focus on compliance, administration, and highly efficient service delivery.

“HR 2.0 teams move toward integrated centers of excellence, and focus on training and empowering business partners to deliver solutions at the point of need.

“HR 3.0, which only 10 percent of companies have achieved, turns HR into an agile consulting organization, one that not only delivers efficient services, but also practices design thinking to push innovative solutions, cognitive tools, and transparency into the organization.”

The report found substantial agreement among the surveyed executives on the key ingredients of HR 3.0, but uncertainty among them about how to evolve their operation. Providing that guidance is the essence of the report.

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After studying multiple HR practices, Bersin and IBM identified 10 “Action Areas” drawn from what the most successful companies are doing. “Our analysis has identified ten priority Action Areas critical to the HR 3.0 model. The Action Areas span the breadth of the human resources function, in some cases wholly reinventing traditional people practices.”

These 10 are:

  1. Measure employee performance continuously and transparently
  2. Invest in the new role of leadership
  3. Build and apply capabilities in agile and design thinking
  4. Pay for performance — and skills — in a fair and transparent way
  5. Continuously build skills in the flow of work
  6. Design intentional experiences for employees
  7. Modernize your HR technology portfolio
  8. Apply data-driven insights
  9. Reorient and reskill your HR business partners
  10. Source talent strategically

Though few companies are on the path to 3.0, those that don’t begin to evolve will be left behind.

“Even as leading companies transform their HR model, it’s clear HR 3.0 is not a destination, just a way station. The world is changing too quickly to allow even a hint of complacency,” the report concludes.

“As we continue to face unprecedented opportunities to build better businesses and a much better world, an HR 4.0 will evolve as a model to help us keep doing just that.”

Image by David Mark

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