The pandemic has accelerated many technological developments. Which trends will dominate in 2021?
That’s right, Corona has accelerated many developments enormously. There is hardly any area that has not been impacted by the pandemic. But not everything is new: in fact, technologies and trends that already existed have received a boost, or they have finally taken over. One of the most significant areas in this sense is the whole “As a service”- economy, e.g. “platform as a service”, open source platforms, and all services in the hybrid, multi-cloud, and 5G environment. Of course, 5G was relevant even before Corona. But again, 5G campus networks complement existing WiFi infrastructures. We can see another interesting development in voice control – keyword ‘voice user interface’ (VUI). Alexa was the initial example, but that technology is now being applied in many other areas. Crucially, sustainability is the meta-topic par excellence when it comes to all the business models surrounding renewable energies, including e-mobility as an innovation driver. Its significance can be observed in the valuation of Tesla shares. And finally, cyber security is once again a hot topic – not an innovation in the true sense of the word, but one that is increasingly in focus due to the IoT. All these technological developments are characterized by tremendous speed. On the other hand, beyond the purely technological aspect, consumer behavior is becoming more important. People have a newfound appreciation of topics such as sustainability, the environment and health, and a new interpretation of existing values.
“In the next ten years, there will be a new generation at the top level who are socialized quite differently, and who network and communicate differently.”
What does this mean for your business model as an HR consultant?
Our business model has already changed in recent years, in that the traditional application process is no longer in use and the demand for consulting services is increasing. In the past, the challenge was to find interesting candidates. This insider knowledge has become passé at least since the introduction (or rather the breakthrough) of social media, above all Xing and LinkedIn. We also see how in-house activities, i.e. so-called active sourcing in HR departments, are making parts of the recruiting market obsolete. This is especially true for specialists and technical positions all the way to lower management. This has substantially changed the business model of HR consultancies. And of course, there are even more ramifications for the executive level: networks are becoming even more exclusive. In addition to the most basic aspect of the business (finding suitable candidates) consulting services are becoming increasingly important. This means that the networks from the past –read: old boys’ networks – will still exist for a while.
But in the next ten years, there will be a new generation at the top level who are socialized quite differently, and who network and communicate differently. Transparency and trust will become more important. In the realm of executive search, this doesn’t just mean getting the best match of candidates and companies. It also includes integration into the company and organizational development aspects. In other words, our job is getting more complex and comprehensive in response to societal changes, and the demands have increased for consultants. Here, too, the pandemic has accelerated certain trends. Contrary to what one might think, the momentum has not slowed down at all. On the contrary, we are seeing that candidates, particularly in the IT sector, are quite eager to switch jobs.
“A global demand is emerging, and with it a more international competition among applicants.”
Let’s turn the question around: where can talents find the greatest opportunities, and what does this mean for the labor market as a whole?
Even if the pandemic has put the brakes on many areas of the economy, overall it seems that the global economy is growing again. Maybe less so here in the Western world; but China, for example, has already recovered very quickly. In other words, there are regions that are growing steadily. On the other hand, people’s mobility has increased. Especially among top executives, people are much more willing to change location. This means that executives trained in Germany, especially the specialists who are most in demand, are getting more offers outside the country. In Scandinavia, for example, there is a great demand for them. The markets there are very straightforward in terms of talent. So a global demand is emerging, and with it a more international competition among applicants. On a related note, human knowledge is increasing at breakneck speed. It’s doubling every twelve years now. This means, of course, that many new topics such as robotics, Industry 4.0 or Big Data are emerging. This leads to an ever-growing list of requirements in a candidate’s profile. Today’s talents have to acquire more and more knowledge in less and less time, which brings us back to the key idea of lifelong learning. All this has had a major impact on qualification, especially since the increase in automation is eliminating unskilled jobs, for the most part. On the other hand, a huge number of new jobs are being created for highly skilled workers. There are excellent opportunities for well-trained talents, especially those who are flexible and have a global mindset.
This also means that countries have to compete for the best brains. By all accounts, Germany is not particularly popular with expats. We have some catching up to do…
Yes, unfortunately. Other countries are much more attractive to potential employees. It starts with the language, but it goes beyond that. We have to make an effort and improve the migration of highly qualified experts.
Let’s go back to training. There is a theory that Germany trains too many specialists, but in the new job market, there is an increasing demand for generalists with interconnected thinking skills. Is this true?
What is certainly true is that, at the latest since the Bologna reforms, it has become more difficult for students to get a taste of other disciplines. This has truly impacted higher education in the past five to ten years. And as a result, graduates sometimes lack the ability to think outside the box and network. However, I still see the situation in a somewhat more positive light, because many combined studies (“Duale Studiengänge”) are bringing well-trained young people into companies. By the way, includes our own. Our recruits come in with an excellent theoretical foundation and practical experience gained early on.
“When I look at the venture capital and private equity scene, HR is one of the most important areas in recent years.”
Another criticism is that SMEs in Germany think too vertically, and not in terms of networking business models. Do we need a change of mindset more than anything else?
Yes, people are still too caught up in their comfort zone. Breaking out of it is difficult, especially if there isn’t enough pressure to do so.
Does that mean we are (still) doing too well? Does prosperity inhibit innovation?
I would agree with that, in part. There are always people in companies who don’t necessarily want to make drastic changes because they’re almost at the end of their careers, or even about to retire. As a result, perhaps companies are not implementing necessary adjustments and innovations. That’s one side of the issue. At the same time, I’m convinced that there are enough driven and innovative minds in Germany, who want to tackle these problems and make changes. If they can’t, it may be due to too many regulations and restrictions, among other things. So we can’t always blame prosperity for the innovation bottleneck. By the way, it’s interesting to observe what happens when start-ups meet corporates: they often clash. Usually it’s still the larger company that decides which way to go. In cases like these, some companies do understand the principle of collaboration. But this learning process is still in full swing.
Start-ups are an interesting topic. For example, Personio is a new unicorn that offers extremely effective HR software. To what extent do you find this surprising?
We always pay attention to where investments are going. When I look at the venture capital and private equity scene, HR is one of the most important areas in recent years, and there are so many patent applications in this field. To me, this is not a big surprise: it seems to prove that we are facing technological change in all areas, that human-machine interaction is becoming more important, and that all this goes for HR as well. Here, too, companies are being pressured to deploy appropriate software solutions to increase collaboration. When it comes to HR software development, I think that our progress is far from over.
Finally, what are the lessons we hope to learn from the pandemic and in its aftermath?
I think one of the most important lessons is that we have to get used to the fact that circumstances can change very quickly. And that we have to endure the incredible uncertainty that such exceptional situations bring. We have seen that the shift to online business was a key factor in terms of business continuity. We have learned that we can work much more efficiently with video calls and that remote working is possible. However, we have to be careful here, because this also involves the risk of overdoing it and burning out, or possibly losing our relationship with our company over time. We will have to keep a close eye on these psychological repercussions in the future. What else? In recent months, we have finally understood that digitization is not just a nice-to-have asset, and that it is high time that we start taking it seriously. We have also learned that we all need more of a start-up mentality to deal with new situations. This means allowing mistakes and learning from them, course-correcting if necessary. In other words, becoming truly agile. Clearly, companies that show this adaptability and agility are in a much better position now. In the end, it’s all about trying out new things, as well as being comfortable with the unfamiliar, being creative, and in my personal belief – just going for it.
This article is part of a content cooperation between FemaleOneZero (F10) and Hager Unternehmensberatung. The company, which specializes in executive search, has repeatedly been named one of the best personnel consultancies in Germany by the magazines WirtschaftsWoche and Focus. Hager Unternehmensberatung employs around 110 people and, in addition to its extensive know-how in the field of digitalization, is also considered a specialist in issues relating to diversity and innovation.