The fourth industrial revolution. 5 ways in which it will affect the HR department

15 October 2019

To a large extent, success in business depends on understanding the trends and adapting to the new elements in the environment that we operate in.
The present moment is marked, not only on a business level, but at the level of the entire society, by the transition from the third industrial revolution, digitalization, to the fourth, that allows technologies to be combined through artificial intelligence, data analysis or ”the internet of things” in order to create new products and innovative services, with major implications for society as a whole.

In 2016, Klaus Schwab, the founder and executive chairman of the World Economic Forum, was already saying that “a technological revolution is underway that is blurring the lines between the physical, digital and biological spheres.“ As such, the subject of the fourth industrial revolution became sufficiently important to be chosen as this year’s team at the annual meeting of World Economic Forum in Davos in 2019.

All of these changes will definitely influence the labor market as well. The human resources department will play a crucial part in identifying the current HR trends and supporting the employees in adapting to the changes in the environment by accepting the new paradigm.

The current stage

We can say that, at the moment, in terms of human resource management, most Romanian companies are in the process of digital transformation. Some are still at the basic but essential level of transitioning from traditional paper to electronic systems, others are more advanced – they have specific expectations, they already see things in an integrated way or they have clear objectives in terms of automation and optimization of their activity.

In any of these stages, the use of cloud-based HR software that is natively open to integration with other applications is one of the solutions that facilitate the evolution of HR towards the digital business environment in a professional manner.

Cloud technology allows the replacement of traditionally downloaded or stored software applications or software on the computer or on the company’s server, with internet applications that allow instant access and modification by the enabled persons. We give you more details in this article.

The next step would be the analysis of the existing HR data in order to retrieve information that would be the basis for a complete picture of the status of human resources within a company. Based on this information, a human resources strategy can be developed and dynamically adjusted to the market realities and the company’s needs. Human resource management would be facilitated by the existence of an HR Analytics component integrated in the used software platform, allowing for the identification of trends amongst the company’s employees or more detailed analyses of various problematic situations in order to identify the true causes, that are often multiple, and initiate solutions.

Thus, we could say that, in the human resources area, we are in the middle of the digital transformation age, or the third industrial revolution, but it’s important to look to the future, to this fourth industrial revolution or Industry 4.0, that is already bringing with it deep change for companies and the world we live in, especially given the very high speed at which they are spreading.

The fourth industrial revolution: what it’s about

The idea of a fourth industrial revolution was first mentioned in an official context at the meeting that took place in Davos in January 2016.  Klaus Schwab, the chairman of the World Economic Forum, is the one who first used the term when speaking about a radical change in terms of the extent of the modifications that it would give rise to.

This new industrial revolution is based on the third industrial revolution, the digital one, and it will redefine the way that industries work, by interconnecting the data, as well as the persons and machines that are used. The technologies of the new industrial revolution have already started to change the way that people work and interact. It’s enough to mention social media platforms for learning, connecting with others and exchanging information, autonomous machines, the biotechnology revolution and the appearance of personalized medicine, artificial intelligence that is already performing numerous small everyday tasks. We can go on with augmented reality, genome editing, robotics, blockchain or 3D printers, even though the large-scale use of these technologies is still in its early stages. The result will be a large-scale transformation of society, from how we communicate to how we learn, have fun or work.

How the fourth industrial revolution will affect the HR department

The fourth industrial revolution is characterized first and foremost by a major paradigm shift, but also by the very high rate at which all of these changes are occurring.

In this context, the role of the HR department will be crucial, since a proactive approach to these changes at the level of the organization can contribute to the maximization of the positive effects and the minimization of the negative ones. In terms of HR management, engagement, people-orientation, transparency, supported by internal and external communication, will be more necessary than ever. The larger the magnitude of the changes, the more attention will need to be given to the employer brand; it shall pay a vital role in the quick provision of new resources that are more suitable for the new challenges that the company is ready to take on.

More than ever, the human resources department will need a coherent strategy and a mindset oriented towards a future where it’s certain that not everything is very clear. Future-oriented companies have already understood the importance of changing the role of the human resources department from a functional to a strategic one. The essential characteristics of the HR department of the future should include embracing change as the only certain constant, along with a higher level of tolerance for uncertainty, both backed by very good knowledge of the markets where the company operates, constant connection with the company’s external environment – not just in the field of human resources– in order to be able to anticipate new trends and never before seen situations and a reconnection with the human component. In troubled times, employees will turn to the human resources department for guidance, answers or solutions. So how do we do our homework?

In Industry 4.0, the human resources departments should be on the first line in order to understand and anticipate as soon as possible the future challenges, the skills necessary in this new world and the changing expectations of the workforce, the new business models, and come up with human resources strategies that take all of these new factors into account.

The disappearance of certain jobs. Managing possible redundancies

The fourth industrial revolution shall give rise to deep changes on the labor market. It will be possible for many jobs to be performed by robots or redefined, so that people have tasks that are integrated with the robots’ tasks.

Implicitly, certain jobs will disappear and companies operating in fields where people can be replaced by robots may face a series of redundancies.

At times like these, the role of the human resources department will be crucial: in addition to the administrative management of these issues, it can propose new options and detect new opportunities for the persons in question. This is another aspect where the difference between organizations where the HR department already has a strategic role and organizations where its role is merely functional, oriented towards the administrative component of the staff, will become apparent.

1. Change management

Traditionally, the HR department has played an important strategic part in change management, from its initiation to its implementation and monitoring.

Given the important changes that are going to take place as a result of Industry 4.0, the human resources department will need to be prepared to support all of the changes that will occur at the level of the organization, by adapting to the new environment that will be challenging for the employees, but rife with opportunities.

2. The need to acquire new skills – increased importance of training programs

The learning and training component will be one of the most important in the context of this new industrial revolution. Employees will need new skills, especially digital ones, while new jobs, that can be filled by new or existing employees, will appear. These employees will participate in a series of training programs based on the new needs.

The organizations’ training programs are not the only ones that will need to be adapted to the new requirements. The entire education system, from schools to universities, will have to be reconsidered based on the new jobs that appear, while many others disappear from the labor market.

3. Data-based decisions and management

Data are playing an increasingly important part in the decisions made by companies and the data regarding the employees are some of the most important. Digitalization has already taken the first steps in this direction. Thus, amongst the HR trends of 2019 and the previous years are workflow automation and data digitization, especially facilitated by a cloud-based software platform, that may also contain an HR data analysis component as a business intelligence tool.

In the new Industry 4.0, decisions will be based more and more on the analysis of the existing data. There will be an increasing tendency to quantify and measure everything in order to analyze and obtain precious business insights. The companies that are quick to do this will be one step ahead, since the knowledge and information that they gain access to will help them to progress exponentially.

4. Increasing flexibility

Flexibility already exists, more and more companies are allowing their employees to work from home on certain days. In addition, companies are increasingly using collaborators, hiring staff for certain projects, adopting flexible working hours. Cloud-based HR software can offer precious support in this regard, as the work can be monitored, regardless of when and where the employee is performing his or her duties.

With the advent of Industry 4.0, it will be possible to eliminate the spatial and temporal barriers for many jobs, with digitalization playing an important part in this respect. Organizations will be able to make working conditions even more flexible if they want to and if it’s possible and we will probably witness the disappearance of the traditional 9 to 5 job.

So, what role does the HR department play in the new Industry 4.0, where so many changes that will deeply affect the world as we know it are taking shape?
The existence of a human resources strategy becomes crucial, with the department being responsible for quickly understanding the new requirements and recruiting the right people, with the necessary skills, based on the new context. Adapting to the new world will be a lot like learning a new language, that we need in order to manage under the new conditions. The HR department will need to understand and accept all of these changes quickly and act as a driver and supporter of change in order to be able to help the employees navigate the process of adapting to the new paradigms.

Companies that can adapt quickly, that have already understood now, during Industry 3.0, how important change is, will have the upper hand. In Industry 3.0, that we are in the midst of, this means transitioning to a digital mindset, where data digitalization allows for the automation of the workflows. As more and more areas of the company embrace the digital approach, due to the new resources, capabilities and increased execution speed, the company can undergo a radical change in terms of its business model, size or the markets where it operates. In such situations, a cloud-based human resources software that is natively open to integration with other applications used by the company will not only facilitate the execution of various tasks, but it will allow human resources to take its rightful place as one of the top priorities of any company.

© 2019 Sincron HR Technologies Inc.