Many people have heard of the ‘circular economy’. It’s the opposite of a throwaway society, defined as both a production and consumption model involving sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products for as long as possible.
But what if we could do the same with human capital? Create a ‘Circular Economy of People.’ It’s a notion we will need to explore and almost certainly embrace. Such a model stems from upending career paths driven by machine learning and technologies such as artificial intelligence (AI). The resulting shift in our working zeitgeist will have profound consequences for both enterprises and their HR departments.
According to a 2023 Goldman Sachs report, AI will displace or downgrade 300 million jobs over the next decade. Unlike the automation boom of the 1980s that put paid to many blue-collar jobs, this new tech tsunami will largely impact white-collar jobs. Lawyers, financial advisers, auditors, and even some software developers could lose their jobs.
It’s not all doom and gloom though. According to the Future of Jobs Report from the World Economic Forum (WEF), 75% of companies surveyed said they will adopt AI, with twice as many respondents believing it will lead to overall job growth.
What we should expect is job churn and fierce competition for the most sought-after disciplines, chief amongst them being AI and machine learning specialists, data analysts, and big data specialists. Also, according to WEF, analytical thinking and creative thinking will be highly prized, even trumping leadership skills in perceived value. Of course, if combined with leadership skills, you are onto a winner.
What does this new world mean for HR?
HR is a profession earmarked for profound change. For example, employee service centres will become smarter thanks to ever more advanced chatbots. Recruitment and talent acquisition will be transformed with AI removing human bias and increasing the accuracy of candidate assessment. I could go on and on, but the real revolution will be in the recasting of the HR department from career dictator to career enabler. ‘Learning and development’, barely on the agenda 15 years ago, will be elevated strategically beyond the HR staple that it is today.
According to the WEF report, 44% of workers’ core skills are expected to change in the next five years. Enabling the reskilling of people within a constantly shifting circular economy of people will be a major undertaking for HR professionals.
Linear career progression – so long the mainstay of HR – will need recalibrating. HR departments will become adept at helping workers to develop horizontal career paths, as people zig-zag from one discipline to another. That means when hiring team members, it is as important to assess an individual’s ability to learn and grow as the knowledge they amassed in the past.
If ‘learning and development’ is the new rock n’ roll of HR then ‘data’ is the record label. You should not have one without the other. The circular economy of people will be predicated on a deep understanding of business and organisational needs. Data analytics will be crucial to the early identification of talent gaps that need filling in accordance with those needs.
Enterprises will still have to attract, select, and retain the best talent. At the same time, they must grow, develop, re-skill, up-skill, and enable talent. We must shift to empower talent and give them more say in their career direction. That requires equipping them with tools to allow them to see the options and navigate their careers confidently.
When it comes to retention, the importance of ‘culture, values, and leadership’ cannot be overestimated. Alongside ‘award and recognition’, they are the twin pillars of employee retention. That’s because employees stay where they feel valued, motivated, developed, and fairly rewarded. Again, HR must be a key enabler for both pillars.
Smart organisations will embrace the circular economy of people and HR professionals have to be ready for it. That means adopting AI tools ourselves, strengthening learning and development capabilities, and focusing on our role as career enablers. Aided by AI, team members will automatically be recommended the most appropriate learning paths based on their historic inputs and other factors. Think of it like Netflix recommendations based on what you recently viewed but more sophisticated.
The trick will be to swim with the tide not against it, for change is coming. Expect a lot of noise with AI, but don’t get sidetracked by headlines about mass unemployment. In the circular economy of people, mass redeployment is the issue that we need to focus on.