What HR people need to know about the 4th Industrial Revolution

By Ian Dowd, director at NGA Human Resources

‘This day and age we’re living in gives cause for apprehension, with speed and new invention and things like third dimension’.  Sound familiar?  If so, you must remember this.  The fundamental things apply.  This blog looks at the implications of change on the corporation and the individual worker and asks what can we do to embrace that change?  What is the role of HR in the revolution?  And as time goes by.

According to research from the Work Economic Forum in Davos we have already entered a forth industrial revolution, where “Disruptive changes to business models will have a profound impact on the employment landscape over the coming years.” Further “Many of the major drivers of transformation currently affecting global industries are expected to have a significant impact on jobs, ranging from significant job creation to job displacement, and from heightened labour productivity to widening skills gaps.“

The WEF Future of Jobs report seeks to understand these changes by asking Chief Human Resource Officers how they think their industry will change by 2020.  So this isn’t as much a prediction of what happens next.   The revolution has begun.  It did a while ago.  It’s about how we respond and how we minimise the switching time and cost from the old ways to the new.

According to some the first industrial revolution came from steam power, the second electricity and the third IT.   To others it was mechanisation, followed by mass production, followed by automation. The fourth is from a diverse set of advances in technology that were discrete but have combined to create a multiplier effect.  From Big data, mobile technology, artificial intelligence and machine learning, robotics, nanotechnology and 3D printing to genetics and biotechnology.  Add to this an equally powerful set of ‘socioeconomic, geopolitical and demographic developments’ and you have yourself a significant, seismic, rapidly evolving and lasting change – a revolution if you will.

One difference this time around is Human Resources.  I’m serious.   Never before have there been so many people, employed formally in a profession whose primary goal is the productive employment of people.  To give two standard definitions HR is “the personnel of a business or organization, regarded as a significant asset in terms of skills and abilities” or “the department of a business or organisation that deals with the hiring, administration, and training of staff”.

If there were going to be a group of people, a department, an academic field, group of researchers, practitioners and business people who can help with this, it is HR.    To understand the current and future impact of key disruptions on employment levels, skill sets and recruitment patterns in different industries and countries we need the people who do this for a living to help.

Within corporations HR needs to be involved in identifying what roles can be automated or roboticised and what roles should be done by humans.  When and how do we make the switch?  Companies that don’t risk being left behind by competitors who gain competitive advantages in cost, efficiency, scale, standardisation and so on.

In identifying what skills are required of staff, how do we continue to develop people? How do we recruit? How do we retain key knowledge workers? –  HR departments will need to help their people adjust and stay relevant in the new world of work.

One prediction is a dichotomy in the labour force with an increased skills gap.  Here well educated workers with relevant soft skills – the art of persuasion, team work, collaboration, salesmanship, emotional intelligence and teaching others – will thrive.  Low skilled workers whose jobs involve routine work, repetition or are focused in a narrow technical area will find they are in less demand over time.

This trend if played out and if it continues could be serious.  If large groups of the population found themselves increasingly side-lined by the jobs market and marginalised in society, while wealth and power become concentrated in the hands smaller and smaller group of people there could well be a different type of revolution altogether.  An old fashioned one like that depicted in Les Miserables.  Or choose another – the English, Russian, American or French Revolution.

Either way, whether through progression or violent and literal revolution, there will need to be a place for people in work, or at least for them to have a stake in the wealth created through industry.  In economic theory there is no limit to the work that needs to be done, no cap on progress or productivity.  There have never been more people on the planet and never been more people in employment.  That is true event whilst we have entered the fourth industrial revolution.

What is required is that we minimise the transition time and cost from old to new.  To maximise the economic and social benefits and minimise the negative effects.

According to WEF: “By one popular estimate, 65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist. In such a rapidly evolving employment landscape, the ability to anticipate and prepare for future skills requirements, job content and the aggregate effect on employment is increasingly critical for businesses, governments and individuals in order to fully seize the opportunities presented by these trends—and to mitigate undesirable outcomes”. So if we can’t fully anticipate and prepare for future skills requirements with any great degree of accuracy we need to get back to basics.  Giving people the transferable soft skills that will always be in demand.  Some of the knowledge and skills that got us to this point in the first place in Science, Technology Engineering and Maths.  As well as the expectation and desire for life-long learning so that additionally required skills can be learned later on.

HR people need to define the core skills required by their organisation and then decide where they find or develop specific skills sets.  This may be through links to education and academia, apprenticeships, on the job learning or by supporting workers in the pursuit of their own personal or professional qualifications.