Keynote speech Michel Stokvis, Senior Director Venture Capital & Strategy at Randstad
Two words characterized the first HR Technology Awards Night: analysis and tension. In a wide-ranging survey of the HR landscape, Randstad’s Michel Stokvis analyzed the challenges for HR, and made suggestions for how to deal with them. The tension built up when, attempting to win one of three HR Technology Awards, nine companies presented their solutions to some of these challenges, in two minutes each.
Michel Stokvis put it bluntly: the ‘war for talent’ has been lost. In the Netherlands alone, there are over 1.25 million vacancies. Left unchecked, the figure will grow to 2, even 3million. Worldwide, there’s a deficit of 85 million workers, costing the global economy over 8 trillion dollars – more than the German and Japanese economies put together. Seen in this light, integrating technology more fully into HR will prove a critical factor in many companies’ survival. As the biggest HR organization in the world, Randstad is strongly engaged with, and substantially invests in, HR technology start-ups. Randstad also needs continuous focus and all hands on deck to stay at the technological frontier.
Nor is lack of new talents the only challenge facing HR. Workforces are increasingly complex. For one thing, employees are becoming more and more culturally diverse.
Also, the ‘flex ratio’ is increasing, with more temps, gig workers and freelancers, groups that most companies fail to include in their HR tools, such as employee manuals and Christmas packages. Another big challenge is how to address employees’ mental health and wellbeing. And all of this at a time when 40% of people worldwide say they’re considering quitting within half a year, making employee retention all the more urgent.
The HR community should be keenly aware that people’s reasons for joining a company are not the same as those for staying. Career opportunities and the expectation of promises being kept are important at the start, but in the longer run, people value a meaningful job more than anything else, while also attaching importance to workplace flexibility and support in health and wellbeing. Therefore, Stokvis said, attraction and retention strategies, while both important, are not the same thing.
A useful concept to unify these strategies is the ‘irresistible organisation’, a term coined by HR thought leader Josh Bersin. Some of the main ingredients are the meaningfulness of employees’ jobs, a management style that is goal- and coaching-oriented as well as transparent, and a positive, flexible and inclusive workplace, alongside attention for employee well-being and a learning-oriented culture. Making the organisation irresistible in order to attract and retain people should be a top priority.
‘AI is as fundamental as the PC, the Internet and the mobile phone, and businesses will distinguish themselves by how well they use it.’ – Bill Gates
Returning to technology, Stokvis expressed his conviction that in HR, as in so many other fields, Artificial Intelligence will be the fundamental game-changer. He quoted Bill Gates: ‘AI is as fundamental as the PC, the Internet and the mobile phone, and businesses will distinguish themselves by how well they use it.’ Generative AI in particular enables a single employee to do the work of several skilled people, thereby reducing the desperate shortage of new talents. It will also create new jobs, as new technologies typically do. At the same time, many uncertainties surround the current AI technologies, and the potential pitfalls are huge. Since the systems are black boxes that even their makers do not understand – ‘they can’t explain their own magic’ – outcomes can be racist, sexist or otherwise biased, or just factually wrong. This is dangerous and potentially costly to companies, in terms of both money and reputation damage. And yet, Stokvis said, the time to invest in generative AI has come.
From among the audience, Pera CEO Rina Joosten emphasised that AI systems for HR can help correct rather than reflect human biases. ‘We overestimate humans and underestimate the potential of AI’, she observed. It’s pointless to ‘blame the algorithm’ and better to actively improve the outcomes, which is what her company works at. ‘I hope that in 5 years’ time, HR will be at the forefront of AI.’
The growth of Artificial Intelligence and other technological changes will roughly double the need for employees changing their skill sets, Stokvis claimed. Over the next five years, nearly half of all employees will need reskilling to make them future-proof. ‘Your training budgets need to rise fast’, he concluded.
Fortunately, there’s good news on that front: virtual reality (VR) technology is making it easier to train people efficiently. Compared to the traditional classroom, VR training is 4 times as fast. Participants become 275% more confident in skills learned through VR and they feel almost 4 times as emotionally connected to the content compared to a classroom situation. During VR training sessions, they’re 4 times more focused compared to a non-VR e-learning setting.
While VR-based training tools and the advent of AI open up new and somewhat daunting horizons, the more traditional elements of HR technology are becoming less complex. Currently, HR departments typically use almost a dozen applications. Stokvis signalled a welcome tendency to consolidation on four levels: recruitment, talent management, learning systems and what you might call ‘core HR’: organisational structure and payroll.