A proliferation of new social networking and database technologies is transforming the way people look for work. As importantly, technology has changed the way companies and recruiters must now engage in seeking out and recruiting passive candidates. A new generation of independent, transient, and globalised workers in the burgeoning knowledge economy is creating new rules around hiring and engagement.

 

Then, as McKinsey warned us at the Turn of the Century, there’s been an ugly demographic shift, and the traditional supply/demand equation has been irreversibly turned upside down. After all this, there is unprecedented pressure on HR to lift its game, and become more aligned to the key strategic drivers of business performance. Measurement of HR performance is shifting and becoming more demanding, requiring practitioners to demonstrate their contribution to high-level corporate goals, not just operational output.

 

These forces are converging, at an alarming velocity, at a stage when many corporate executives who look at HR, think its job should be relatively straightforward: “With so much talent in the market, why is it so hard to attract, develop, and retain the right people?” These are the key imperatives facing the HR profession worldwide. This is not simply a short-term cycle, but part of a longer-term trend that is shaping the fundamental way that people think about work and interact with employers, families, and communities.

 

 

The march of globalisation has spread across a range of markets as diverse as motor vehicles, natural resources, energy, and food. Labour is the latest ‘market’ to be engulfed by the tide of

globalisation, as human talent becomes truly fluid and exchangeable, an asset which flows across international borders.

 

The concept of globalisation often attracts bad press. The image of hooded protesters hurling objects through the plate glass of McDonald’s or Starbucks at a G20 summit is the ugly face of the trend. Globalisation, as a phenomenon, has been advancing at a hectic pace in recent decades, fueled by greater international mobility, prosperity in the developed world, and a communications revolution that has transformed the exchange of information and ideas.

 

Across virtually every sector of the economy, we are now intertwined with the global community through trade in goods and services, a complex web of banking and financial flows, and a growing exchange of intellectual and scientific information. There is no question that the world today is more like the global village that was first seen in the 1970s. 

 

This has profoundly transformed the way that goods and services are transacted between parties in different locations. In the 1700s, the ‘producer’ made horseshoes, and the ‘consumer’ lived no further than a horse could walk. In 2010, the producer is a knowledge worker and so is the consumer.

 

In labour markets, distance is no longer the obstacle it used to be, even in the pre-digital era. In many industries, a trained professional in, for example, Guangzhou, can easily supplant a similar professional in New York or Dubai. In certain industries where skills are highly transferrable, there is little to stop workers from being recruited for assignments in any location around the world. In our knowledge economy, the tight geographical binds between producer and consumer are gone, permanently.

 

It is worth remembering that while the language of globalisation is relatively new, the concept itself has been around for centuries. The search for better food, shelter, pastures, and territory has occupied the minds of our ancestors from the Sumerians, to Marco Polo, to the Inuit.

 

 

One of the most important chapters in the evolution of HR concerns the way it is being driven to move closer to the centre of organisational strategy. This, of course, is a double-edged sword; it’s great news for those ready and bad news for those who are not.

 

We have seen HR undergo an evolution from the model that prevailed in the post-WWII era, what I call HR 1.0, through to HR 2.0, which has dominated until recent times. HR 1.0 was a model forged in the late 1940s that had its genesis in the massive influx of former military personnel from the Second World War. These were very talented and experienced people. These people, these HR ancestors, were focused on transactional excellence in areas such as employment law compliance, payroll processing, and recordkeeping. 

 

HR 2.0, as I call it, emerged sometime in the late 1970s and carried on for almost three decades. HR professionals were required to move beyond transactional tasks into areas such as employee relations, performance appraisals, training, and recruiting. It represented a move upwards along the value chain, an encouraging sign that HR would move closer to the corporate ‘centre.’

 

These were halcyon days for some of the most competent people in the HR field. These leaders paved the way for untold numbers of HR people to shape how their own organisations delivered HR. In far too many organisations, the people involved weren’t the right fit for the new era of heightened corporate focus and accountability. There was an emerging interest in the use of Information Technology and how it could liberate HR from routine processes, freeing up professionals to concentrate on higher-value tasks. In short, the target had moved. 

 

Now we are getting a glimpse of HR 3.0, and the next wave of activity that promises to give HR a ‘seat at the table’, if we’ve earned it. Frankly, it hasn’t followed the trajectory that some had anticipated. The fear that IT would swallow a critical mass of HR tasks has not proven correct. In the era of the knowledge economy, the application of human judgment and reason still prevails over the finest technology. It remains clear, however, there is a big part that HR plays at the forefront of integrating its systems with IT.

 

 

The way that we view the world of work is evolving. Actually, it’s becoming more simple: if the work is located away from the talent, do we move the work or do we move the talent? It all depends, of course, on the nature of the work. If mining engineers are needed in the Pilbara region of Australia, we certainly can’t move the work. However, we can move engineers from Canada or Russia to Pilbara. On the other hand, if we need software engineers, they can be located in Atlanta, Adelaide, or Amsterdam.

 

This is truly revolutionising the way that we locate and deploy talent. There are still clearly many jobs that require a specific locality. There are an increasing array of jobs, and elements of jobs, that can be tasked to individuals in any part of the globe. E-health, as an example, means that diagnostic tools can be accessed by patients and health professionals remotely. In construction and manufacturing, standardised CAD techniques mean the design elements can be outsourced to wherever they can be performed competitively. 

 

In the growing knowledge economy, there is virtually no limit to the breadth and scale of functions that are open to globalisation. This ‘workforce virtualisation’ is something quite new, wholly enabled by accelerating technology, but only delivering results to those select firms that understand this sea change. It opens up a new set of challenges around the recruiting and retention wars that are unfolding in this era.

 

Companies realise the potential of tapping into a vast global labour pool, especially at times of a talent shortage. They are heading in this direction and will need their HR partners to show them the way. HR will be expected to become proficient with a range of technologies and platforms that support an ever-broadening set of functions. They will also need knowledge of labour markets, cultural differences and similarities, key recruiting methods ,and labour laws in a variety of different jurisdictions, requiring a level of expertise that many HR departments have never before been called on to provide.

 

All this presents a unique challenge for the HR profession. In a relatively short space of time, it has moved from a comfortable position in which the boundaries of its work were defined by distance, to one where the talent pool is literally global and may be sourced from anywhere.