Human capital management (HCM) has witnessed a profound evolution driven by technological innovations, changing workforce dynamics and an increased focus on creating positive worker experiences. Organizations are now compelled to embrace a new era of HCM, transitioning from HR serving as a transactional partner primarily focused on tasks like payroll to an integral part of organizational decision-making.
As technology, talent expectations and business models continue to evolve, organizations are navigating complexities across various workforce solutions that involve sourcing, hiring, onboarding and paying talent with the right skill sets that meet their goals.
Driving Forces Behind the HCM Evolution
The evolution of HCM is driven by two key factors: advancements in technology and shifts in workforce dynamics.
Technical advancements of cloud-based systems, like human resources information systems (HRIS) and application tracking systems (ATS), have better centralized various aspects of the talent lifecycle. There is a growing demand that these technologies be able to speak with one another, particularly in the context of advanced data governance. The providers that offer accessibility to events and real-time data through API libraries are making significant strides in meeting these evolving needs.
Companies are starting to pilot point solutions using AI recruiting. We’re observing focus into predictive data analysis, worker liability risk, talent succession/engagement and general fixes to making operations more efficient. Digital platforms like Upwork have implemented an AI-powered job post generator, designed to create fully customizable job posts drafts in seconds and have begun some experimentation in value added areas for both our talent and customers.
Shifts in workforce dynamics particularly the rise of independent talent have played a significant role in the HCM evolution, prompting a reevaluation of how workforces are structured.
A recent survey by the Upwork Research Institute indicates that a staggering 38% of the US workforce, or 64 million Americans, performed independent work in the past year, an increase of 4 million total professionals from the previous year. As organizations continue to struggle to close skills gaps and access the skill sets they need, organizations are increasingly tapping independent talent to solve the talent shortage, with nearly 80% of hiring managers who engage skilled on-demand talent say they are confident in their ability to find the talent they need.
These forces, in turn, have evolved HCM solutions to support dispersed work environments and have adapted to manage a flexible workforce of full-time employees, independent talent and contingent workers.
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Complexities of Today’s Workforce Solutions
Complexities of today’s workforce solutions arise from the need to navigate a multifaceted landscape of diverse technologies, various work arrangements, regulatory considerations and more. Organizations are navigating an increasingly complex web of specialized tools and platforms designed for talent acquisition, onboarding, performance and workforce management.
Take for instance, almost all organizations are using recruitment ATS technology which streamlines the recruitment process from job openings to selecting and hiring candidates, and human capital solutions provide centralized platforms for managing employee data, payroll and benefits in addition to leveraging platforms like vendor management systems and managed service providers to manage a diverse workforce of independent and contingent talent and supplier management. Each system plays a critical role within the work ecosystem; however, there are challenges associated with streamlining and optimizing all aspects of managing the entire workforce ecosystem.
A Strategic, Adaptable and Technology-Driven Approach to Better Prepare for Tomorrow
The complexities in workforce solutions necessitate a strategic, integrated approach that acknowledges the intricate interplay between technology, talent and organizational objectives and goals.
Organizations can implement several strategic measures. One of which includes fostering the integration of diverse HR technologies. Collaborative platforms, like Upwork and SAP Fieldglass, are joining forces to deliver a more comprehensive and unified approach to workforce management. Upwork, in particular, has also extended integration capabilities with leading HRIS, ATS, procurement and recruitment platforms to enable businesses to work seamlessly across the entire workforce ecosystem, ensuring organizations have a holistic view of workforce data.
As organizations navigate this transformative period in HCM, the imperative to embrace a new era is evident. Meeting the challenges of today’s workforce complexities demands a strategic, adaptable and technology-driven approach for successful management and continued innovation.