Could the traditional ROI give way to Return on Individuals?

We've all been part of the era where employers would often simply lay off workers with outdated skills or redundant roles and go out and hire new workers to fill new needs. But this is no longer an option given the intense inability to find the people with the right the skills to help companies compete and grow.

In a whitepaper published last quarter, Lee Hecht Harrison (LHH) proposes the concept of evolving human capital from 'replaceable' to 'renewable'. This is termed as The new ROI: A Return on Individuals, also the report's title.

Essentially, this entails abandoning inefficient and costly talent management strategies that lean on a “fire and hire” approach and adopting talent enablement strategies through investments that can take various forms. 

It could involve enabling workers to take on new roles and career paths in a world where automation will dominate, for example through reskilling, upskilling,or redeployment. In instances where individuals simply cannot meet the demands of new roles, it can take the form of a comprehensive transition programme that will help them find purpose in a new job in another organisation.

Overall, this calls for the creation of an entirely new talent ecosystem built from three distinct HR disciplines—hiring, learning, and restructuring—on a foundation of workforce analytics. For your brainstorming, we've laid out the six-step path to building a renewable workforce below, as shared in the report: 

Step 1: Visualise

Consider not only organisational design, but also future skill needs. To execute on future business plans and strategies, what kinds of people do you need, and where are you going to find them?

Step 2: Assess

Before looking outside your organisation, you need to take a hard look inside. This will involve assessing skills and adaptability of current employees. You need to know who is fit for the future and who is too far off-track to contribute to the future state of the organisation.

Step 3: Commit

A workforce transformation needs support from leaders and employees if it is to be successful. It is important to share the details of the future-proofing strategy to earn trust and combat the “hold-on-to-what-I-have” mentality that many employees demonstrate in the face of profound change. Ensure that workers understand that a future-proof workforce is one in which there is a lot of choice. The watchword is transparency.

Step 4: Execute

Ensure that continuous learning, reskilling, and creative exit options are prominently featured. An internal labour economy, where employees can apply and train for different jobs in different parts of the same company, is essential. We need to introduce new approaches to reskilling to produce rapid results. However, workers who cannot adapt may still need to be separated. Here the watchword is consistency.

Step 5: Rethink

No organisation is going to get future-proofing right the first time. It will be necessary to review and analyse all aspects of future-proofing to ensure that you are getting the correct outcomes. Be prepared to enhance efforts to promote internal movement with proactive job matching and intensive skill intervention. An objective review of existing policies and practices will help you find gaps that need to be filled and repaired.

Step 6: Improve

This will be an iterative and evolving process. Having analysed what’s working and what’s not, look for both quick wins and longer-term plays that will improve upon what you’ve implemented. Measure employee engagement and alumni sentiment as well.

The return on your investment in individuals will compound over time as you continue to reinvest in additional areas of development, and internal mobility will create new opportunities for your employees to expand their skillsets and move into new roles.

Photo / 123RF