Maximizing human capital in a digital age
- By Eugene Clark
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E-mail China.org.cn, September 22, 2017
One of the major resources of every country is human capital. If we are to maximize our chances of meeting the world’s challenges, it will be important to develop, as far as possible, the human talent capable of discovering solutions.
That means doing a better job in ensuring that individuals find meaningful and sufficient work so that they can become productive members of society. The reality is that there are major gaps between our human potential and the reality experienced in many workplaces around the world. To understand future trends and get a picture of which countries are doing it best, I would recommend two important reports.
The first is Deloitte’s annual Global Human Capital Trends report published earlier in the year, which contains a rich source of data and analysis that organizations should consider. The report includes a number of current trends it says should be on the agendas of organizations and helping to shape its decisions and strategic directions.
It concludes that, already, we are seeing the emergence of new forms of organization that will shape our future. Advancements such as mobile and cognitive computing, the Internet of Things and cloud and cognitive computing mean the boundaries between home and work, between public and private, within and outside organizations and between people are shifting and in some cases becoming blurred and even disrupted.
A second trend is the growing role of lifelong learning. This doesn’t just take place in a university, but will be real time, 24/7. A third trend relates to cognitive recruiting which involves organizations deploying social networking, analytics, and cognitive tools to find, attract, train, place and retain the best talent.
A fourth trend is the increasing importance of workplace culture and employee engagement. A fifth trend is greater sophistication and data analytics applied to performance management. Over the last few years, organizations have been experimenting with new performance management approaches and systems that focus on continuous feedback and coaching, reducing the focus on an annual appraisal.
These approaches have great potential to enhance performance and change organizational culture. Other trends include the growth and power of big data analytics, greater efforts to promote diversity and inclusion, increasingly sophisticated digital HR platforms and systems and the use of AI and other technologies to augment the existing workforce.
Finally, we are seeing the emergence of a new form of leadership, often termed e-leadership. Organizations need leaders who understand digital disruption and the way that technology makes traditional leadership structures flatter, less hierarchical, more cooperative, distributed and interactive.
The second report is the World Economic Forum Global Human Capital Report 2017 which presents information and data compiled and/or collected by the World Economic Forum (WEF). WEF is the Switzerland-based not-for-profit foundation that is famous for the Davos conference.
The Global Human Capital Index 2017 ranks 130 countries on how well they are developing their human capital on a scale from 0 (worst) to 100 (best) and five distinct age groups or generations – 0-14 years; 15-24 years; 25-54 years; 55-64 years; and 65 years and over. In this way, it seeks to reflect the full human capital potential profile of a country.
Human capital is measured across four thematic dimensions: 1) capacity, measuring the achievement of educational levels across the age spectrum; 2) deployment, covering skills application and accumulation of skills through work; 3) development, which reflects education level; quality of education system; on-the-job training; skill diversity; and 4) know-how, which involves the breadth and depth of specialized skills use at work. This includes an assessment of the economic complexity of a particular country and availability of opportunity for middle- to highly-skilled positions and availability of people to fill these roles.
The WEF concludes that, on average, the world has developed only 62 percent of its human capital potential, thus indicating large wastage of human potential. Only 25 nations have tapped at least 70 percent of their people’s human capital potential. At the other end, 14 countries remain below 50 percent.
The top 10 countries in terms of developing human capital are dominated by a group of small European countries (1. Norway; 2. Finland; 3. Switzerland; 5. Denmark), plus large economies such as the U.S. and Germany).
Overall, China ranked 34th of 130 countries assessed. In the sub-indexes, China was 62nd in capacity, with a score of 70.3 percent. In terms of deployment of its work force (participation, rate of unemployment and under-employment, gender gap, etc.), it ranked 19th (74.1 percent). For development, it ranked 47th, and in know-how, 44th.
Overall, these results are a substantial improvement over the 2016 Report where China ranked 71st overall or in the mid-range of overall index scores, but, even then, was ahead of all other BRICS economies except for Russia. This improvement is exemplified in China’s rapid adoption of new technology, for example, in the field of industrial robots.
It also reflects the reality that China has taken far less time than other countries (e.g. Singapore) to upgrade its economy into higher value and complex sectors.
Eugene Clark is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/eugeneclark.htm
Opinion articles reflect the views of their authors only, not necessarily those of China.org.cn.
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