Agile HR is just as important as being agile in IT. Why? 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 marketplace. Read more about it in this blogpost Why Organization Should Integrate Agile Holistically.
This also goes for HR.
Traditional HR: Ownership-focused
However, right now the traditional view on HR is that it’s all about job requisition and retainment. The job requisition process looks something like this: The job description and role qualification is specified, formulated, and shared across recruitment platforms. Once the candidates are found, they’re invited to interviews, and then passed on 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 8 months for a new employee to reach full productivity, according to a study from Harvard Business Review.
If you’re an employer, this gives you approximately 9,5 months before your new-hire is at a satisfactory level. Many HR leaders recognize that this process is inefficient, but argue that the process should be viewed as a long-term investment in retaining employees’ skills within the organization. Unfortunately, that’s the wrong way to look at it, taking into consideration all 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 a more and more integrated part of our daily lives. This trend is dismantling the traditional employment, and creating a more disrupted workforce, focused on shorter and more flexible employments. According to the IDC, in the next five years, 45 percent of workers in Europe will be self employed, either completely 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 EFIP.
This trend combined with the fact that almost 33 percent of new hires look for a new job within the first 6 months on the job, 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: Acces-focused
Instead, HR leaders must think of recruitment and retainment as an agile process, consisting of dynamic elements that can be adapted quickly 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 workforce. For example, your company might need a software programmer for a new elaborate feature on the website. Or, your company may be in demand of someone who can take care of the graphical design of a new campaign. Or, it may need a professional text-writer to do an e-book on an industry-specific topic.
All of these problems are time and project specific, and can be solved efficiently by hiring a qualified freelancer to do the job. This allows your company to scale up and down on staff according to its business’ needs.
Agile HR is about adapting the hiring model to today’s market – not about discarding the traditional full-time employment. It’s about looking at your business’ needs and identifying how they could be solved most efficiently and with the greatest value-add.
But agile HR is not just about looking at resources. It’s also about how it mobilizes itself. Agile HR departments organize themselves into small, cross-functional teams that mobilize quickly, are flexible, and able to adapt to changes quickly. Big annual plans act as constraints rather than enablers. Comparing output of work to a plan that is no longer viable is pointless and an outdated method. Rather, agile HR departments focus is on how they contribute value to the company and the end user in the most efficient way.
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. Further, such companies also gain greater customer centricity, faster time to market, higher revenue growth, lower costs, and a more engaged workforce.
30 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 also be the ones who are most likely to stay competitive over the long run.
Is agile HR part of your company’s strategy?