Career

HR Trends: Learn What's Shaping The Human Resources Space

22 July, 2019
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"While new HR technology trends and evolving values are disrupting talent management and changing how companies operate, the workforce is still people-centered."

Learn about fascinating HR trends that are emerging in the human resources space in 2019 and beyond.

We live in the age of disruption, guided by emerging technologies, public policy developments and shifting cultural values. While every industry, job and organization races to keep pace with rapid changes, the human resources industry is on the front line of responding to movements in how we live and work. HR professionals, armed by new technology amid a deluge of innovation, are charged with implementing solutions across all phases of talent management while also agilely accommodating the evolving expectations of employees and job seekers.

According to Mercer’s Global Talent Trends 2019 report, a staggering 73% of HR leaders predict significant industry disruption in the next three years—up from just 26% in 2018. For example, more than half of the HR departments surveyed believe that artificial intelligence automation (AI) will replace one in five of their organization’s current jobs. However, AI and automation will also create 58 million net new jobs by 2022, according to estimates from the World Economic Forum, which will keep recruiters and hiring managers busy for years to come.

The unprecedented restructuring of the workplace—powered by smart technology—presents boundless opportunities for the HR industry, well into the future. But the shifting workplace and a widening skills gap also demand that a company’s HR team aptly respond to emerging trends to stay ahead of the curve. Organizations that fail to implement new workforce strategies will fall behind the competition when it comes to talent management and meeting human capital needs.

The following HR trends are impacting companies of all sizes across various industries and represent tremendous opportunities for HR leaders to adapt, plan and strategize for the future of work:

1.    Organizations are increasing their employee engagement spending to create experiential workplaces.

Employee engagement—the level of emotional connection, involvement and commitment that an employee has with their organization—is a critical tool for maintaining a healthy bottom line. Dedication and enthusiasm grow when employees feel valued and empowered in the workplace. In turn, employee engagement also increases employee retention, enhances performance and maximizes productivity.

Companies suffer when employee engagement is low and unfortunately many companies currently suffer from poor engagement. As Gallup reports, only 13% of over 31 million respondents worldwide are truly engaged at work. HR professionals are observing the problem with 43% reporting low or declining employee engagement as a top concern for their organization, according to Mercer’s Global Talent Trends 2019 report.

It is expected that organizations will respond to these concerns by ramping up efforts to boost employee engagement. More specifically, these efforts will be aimed at redesigning the employee experience. Organizations will strive to create a company culture that people want to contribute to and be an integral part of each workday—not just a place where they report to so they can receive a paycheck. Some examples of this effort might include regular pulse surveys and transparency reports, employee-centric events, experiential onboarding programs, rewards programs, thank you cards, employee-led teaching sessions, wellness programs, social media campaigns, personal coaching, and stay interviews to retain top talent.

The added investment in employee engagement will likely pay off for companies, as experiential organizations have more than four times the average profit and more than two times the average revenue.

2.    Organizations are leveraging artificial intelligence (AI) technology to eliminate unconscious bias.

While many companies want to remove unconscious bias from the hiring process, it proves to be difficult because these predispositions operate automatically and act without our awareness. Furthermore, there are far too many biases to manually remove them from our decision-making processes.

Unconscious bias is an ingrained human trait and some experts therefore suggest that the best way to overcome biases is via non-human solutions. A notable feature of AI is its potential to mitigate the effects of unconscious bias in the hiring process. With AI, candidates are sourced, screened and filtered through large quantities of data. The programs combine data points and use algorithms to identify who will likely be the best candidate. These data points are looked at objectively, completely removing the biases, assumptions and oversight that humans are susceptible to.

AI for human resource systems can be also programmed to automatically disregard a candidate’s demographic information, such as gender, race, and age. It can take a step beyond protecting the basic demographic information and also ignore other details that may indicate racial or socioeconomic status, such as school names and zip codes.

AI offers the opportunity for human resource professionals to cross-check results with the processes in place, identifying where unconscious bias may exist. Unlike traditional methods, the results of AI can be tested and validated by creating a profile based on actual credentials of successful employees, providing hard data that either validates or disputes beliefs about what qualifications to search for in candidates.

3.    More companies will use virtual reality-based sexual harassment training.

Though training programs are widely in place to address sexual harassment, it still remains a pervasive problem in the workplace. Historically, sexual harassment has been viewed by companies through a legal and risk mitigation lens. With many companies still drawing from content that focuses on how to avoid litigation, they are not being prescribed actual strategies to prevent harassment in the first place.

But some companies are now employing virtual reality (VR) programs to prevent workplace incidents, placing employees directly in training scenarios that unfold depending on how the user reacts. By mimicking conversations, VR-based programs invoke a deeper sense of empathy and make employees more acutely aware of social cues beyond just what they’re saying to another employee—such as eye contact, body language and personal space.

VR is an effective sexual harassment prevention tool—more so than the traditional videos, presentations or handouts—because it allows employees to learn under the same conditions they would be in if the situation were to actually occur in the workplace. As more personal stories of harassment are shared and society takes measures to address the epidemic of sexual harassment in the workplace, it is likely that more companies will update their approach and adopt immersive VR-based programs.

4.    Companies are implementing remote-friendly work arrangements that enhance engagement.

To compete with the gig economy and respond to demands for work-life balance, more employers are taking a cue from startups to offer flexible work arrangements, including flextime and telecommuting options. As coworking spaces grow in popularity and millennials and Gen Z become more prominent in the workplace, organizations are pushed to recognize the value of hiring remote workers. Flextime arrangements are also seen as a means of accommodating rising demand for work-life balance.

It is clear that the demand for flexible working is increasing year on year. Worker demand for remote working capability has reached 75%, up from 70% in 2017.

The benefits of a remote workforce go beyond just higher employee satisfaction and well-being though. It has been found that remote workers can be more productive, healthier and help companies reduce costs. Furthermore, it allows companies to draw from a larger pool of prospective employees to attract the world’s best talent.

Upcoming trends in remote work will find companies addressing some of the engagement and IT challenges that arise when your employees are logging in from locations around the globe. Companies will explore specialized technology regulations, onboarding, training, engagement, wellness initiatives, and events aimed at engaging the remote workforce.

5.    Learning and development (L&D) is becoming more personalized.

The golden age of choice, flexibility and control is upon us. As consumers, we are accustomed to enjoying personalized experiences based on our unique needs. For example, we can customize our news feeds to show us the updates and specific topics we want to see. Netflix recommends programming we may be interested in, based on our previous activity.

Historically, HR practices have focused on standardizing L&D for a company, offering “one-size-fits-all” solutions that put the company’s needs as the starting point. But, going hand in hand with the need for higher employee engagement, the traditional approaches to L&D are no longer cutting it in the new workplace. The expectations for training programs have advanced from simple content tutorials to adaptive machine learning experiences that are tailored to the unique needs, levels, functions, preferences, and interests of each individual employee.

Companies that adopt personalized L&D tools will save money in the long run, turn out more productive employees and make processes more effective. This is because personalization detects behavior patterns and reveals correlations in such behavior among employees. As similarities and parts start to be identified, employees can then be segmented accordingly. Through this segmentation, HR leaders are able to effectively deliver relevant L&D content that meets the individual needs and goals of each team member.

6.    Companies are using people analytics to improve processes.

For years, people analytics was considered just a small part of the HR function. But companies today are using people analytics as a critical business instrument that can be applied at every level of an organization, ranging from the recruiting process all the way to talent management.

When it comes to performance management, people analytics helps remove the human bias that often comes with evaluations. It also allows for an evaluation of both the process and outcome, which can help HR teams separate variables (such as luck) from real skill. Overall, people analytics can help paint a more clear, structured and honest picture of an organization’s performance.

When it comes to staffing, people analytics can increase the chances of finding the right people for the right jobs. It can also be useful for building employee engagement and satisfaction, as it cultivates data about employees’ attitudes and moods. It can also facilitate collaboration within an organization, providing insights about how well certain people and groups work together.

As staffing, collaboration and performance processes are improved, people analytics can then be leveraged to help the HR team uncover employee behavior patterns, track employee development within the company and monitor employee engagement.

7.    The employer brand is becoming a critical recruitment and retention tool.

In today’s competitive hiring landscape, the HR department is being tasked with marketing the company to recruits and employees. People are increasingly wanting to work for a company whose values align with their own. In an international Glassdoor study, 77% of workers said they would consider a company's culture before applying and millennials reported that they care more about work culture than salary. Meanwhile, applicants and employees also have access to more information than ever before. For example, numerous websites allow for employees to write about the company culture and social media can allow for partners and customers to share experiences.

The employer brand is therefore becoming an important tool for HR, often deciding if an applicant will say yes to a job offer or whether a current employee will stay long term. Applicants are coming to interviews not just aware of an employer’s advertising campaigns and brand communications. They also readily read up on the company’s charitable giving and the way it treats employees. Meanwhile, current employees are more conscious of the company’s corporate social responsibility activities and the way it treats partners and contractors. If values don’t align, a company could miss out on prospective talent and lose valuable employees.

8.    Robotics and autonomous (HR technology) agents are saving valuable time.

Within the realm of AI, many companies are incorporating chatbots and apps into their HR systems. This can provide immediate and consistent answers to common questions related to holiday leave, compensation, benefits, company policies and legal rights.

As self-service platforms, the bots and apps free up time for both employees and employers while still delivering the right information at the right time. This HR technology also allows the team to focus on more urgent questions and complex issues that require special attention.

9.    Nudge-based technologies are facilitating work flow.

HR technology is being implemented to suggest behaviors for employees and improve workflow. For example, a software program can monitor employee activity at a computer workstation and, after a certain amount of time, send a message to the employee that it might be time to take a break. Technology can also analyze data from e-mail, calendars and internal collaboration systems to measure a manager’s productivity and provide suggestions for how they might be able to improve their team’s performance. It can also let them know how much time they spent with each of their direct reports or how many emails were exchanged ahead of a project.

Nudge-based technologies can also be used in lieu of repetitive communication from the HR department. For example, automatic reminders can be sent to managers to fill out performance evaluations.

10.    The skills gap can only be closed by hiring lifelong learners and offering constant reskilling.

Gone are the days of vertical careers, fixed titles and detailed job descriptions. The workforce is shifting from fixed job titles and detailed job descriptions to ever-revolving roles. It doesn’t matter how talented or motivated new hires fresh out of university are—nor what stellar technology training they’ve received. At the current pace of technology growth, chances are that many of these technical skills will be obsolete within a few short years.

It is therefore no longer enough to hire for the skills in demand today. Companies need to focus on hiring lifelong learners who have the ability to constantly learn new skills and navigate technology that might not even yet exist. This often requires a deeper assessment of a candidate’s soft skills and personality, not just their past history. To help delve into these traits—which do not often appear on a candidate’s resume—some organizations are implementing virtual reality, automated simulations and gaming tools in their recruiting. These HR technologies can help them observe how a candidate handles unfamiliar situations in real-time and how effectively they absorb new information to troubleshoot nebulous problems.

Because many of the skills of tomorrow don’t even exist yet, employers won’t be able to always adequately recruit for them. Some companies are looking inward to develop these skills within their current workforce, providing current employees with constant access to training and offering them meaningful incentives to continuously reskill.

While technology demands new skills and experiences from workers, the hiring landscape is also becoming more competitive for employers. These compound trends can make it difficult for HR teams to keep up with hiring needs. Instead of constantly hiring for new skills and restructuring staff, HR departments can help fill the widening skills by ensuring that lifelong learning becomes an embedded part of company culture.

The future of HR innovation presents both challenges and opportunities for companies around the globe as they compete for top talent. While new HR technology trends and evolving values are disrupting talent management and profoundly changing how companies operate, the workforce is still people-centered. As companies look to adopt new workforce strategies, the successful ones will look at these bourgeoning trends through the lens of the human experience to identify what will best inspire and innovate.

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David Anderson | 22 Aug 2019

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Thus, it's helpful to take a comparative look at a sampling of cities that show serious potential to succeed and sustain their success over the long term. What they have in common is a commitment to regional superiority of opportunity and resources, to establishing themselves, in their way, as versions of Silicon Valley — where tomorrow's most highly skilled talent can thrive, building purposeful lives amid the evolution of artificial intelligence and advanced technology. From 'Cyberabad' to Other Contenders   A prime example of an emerging megacity is Hyderabad, the capital of India's southern state, Telangana. With a population of eight million, Hyderabad is the sixth most populous urban agglomeration of India and is popularly known as Cyberabad — the "Silicon Valley of India" — for its growing reputation as a global hub for information technology. 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Katie Kuehner-Hebert | 22 Aug 2019

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But in this era of increased accountability, Leila Szwarc, global head of compliance and strategic regulatory services at TMFGroup, states that companies should re-imagine the notion of compliance as a "business enabler" that can distinguish it from competitors.4 According to Szwarc, "Compliance should be seen as a business enabler rather than as a drain on development, but this can only happen if businesses work in an integrated way to bring creative solutions to the related organizational challenges." She continues, "As APAC firms face up to a new regulatory era, compliance teams have a key role to play in both protecting their firms' interests and helping to drive long-term competitive advantage." With an uncertain market ahead and vast changes on the horizon, it's more important than ever to get ahead of the curve and think about how your business can not only survive the wave of digital transformation coming but also thrive with it. Start planning your business strategy, placing compliance and digitization at the heart, with these considerations in mind today, and you'll be better off tomorrow. Sources: 1.Suzuki, Yasushi; Highfield, Richard. "How digital technology can raise tax revenue in Asia-Pacific." Asian Development Blog, 13 Sept. 2018, https://blogs.adb.org/blog/how-digital-technology-can-raise-tax-revenue-asia-pacific./ 2.Hovancik, Andy. "How Modern Taxation is Driving Digital Transformation in Finance." Payments Journal, 16, Jul. 2018, https://www.paymentsjournal.com/how-modern-taxation-is-driving-digital-transformation-in-finance/. 3. Schliebs, Henner. "2019 CFO Priorities: Experts Predict Top Trends." Digitalist Magazine, 18 Dec. 2018, https://www.digitalistmag.com/finance/2018/12/18/2019-cfo-priorities-experts-predict-top-trends-06195293. 4.Szwarc, Leila. "Regulatory compliance – The new business enabler." Risk.net, 18 Mar. 2019, https://www.risk.net/regulation/6485861/regulatory-compliance-the-new-business-enabler.

Isabelle Hernu-Sfeir | 19 Aug 2019

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Editorial Staff | 23 Aug 2019

Blockchain has potential to make a huge impact. Learn about fascinating blockchain trends that are emerging in 2019 and beyond. Blockchain technology was invented to safeguard the cryptocurrency infrastructure (e.g. Bitcoin), enabling secure financial transactions without the need for a bank or a middleman. But blockchain’s ledger technology is now expanding beyond digital currency and financial services, offering great potential to improve upon many areas of our lives.  As blockchain matures and becomes more accessible, companies across various industries are finding compelling use cases for blockchain to make businesses processes more efficient. For example, banks can now reduce infrastructure cost by 30% throughblockchain solutions. 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Because no central party will ever be in control of all of the record keeping, blockchain can be used to mitigate financial, political and institutional corruption in corporations and governments, alike.  Blockchain may also be able to improve the political sphere in terms of voting systems. Because records cannot be altered in any way, blockchain is ideal for voter registration, identification and vote tallying. Election corruption and voter fraud would be eliminated, ensuring a more accurate, fair electoral process.   The general public will also be drawn to blockchain’s ability to eliminate transactions fees. Owing to decentralization, sending and receiving money can be expedited and enhanced. This has implications for automated legal procedures, customs payments, ownership transfers and business transactions—allowing widespread disintermediation across industries and economies.  Another mainstream use could be in public records of ownership, citizenship and identity. Even in the thriving digital era, these records are stored in centralized databases for security. However, this exposes them to tampering because of the intermediaries it engages. Blockchain opens up the possibility of a decentralized, public, fixed and consensus-driven ledger of records that could nullify the need for intermediaries. A groundbreaking example of this is Estonia’s E-Citizenship Program, which stores citizens’ information on a blockchain.  The application of blockchain can also be extended to include organizational information for the HR department, where one day a company can maintain one identity stored in a master Blockchain. This could be safely accessed by all stakeholders including vendors, employees, customers and tax authorities. 2.  Blockchain as a Service (BaaS) will facilitate business adoption. A Blockchain-as-a-Service (BAAS) platform is a full-service cloud-based solution that connects developers, entrepreneurs and enterprises on one platform. On the BaaS, stakeholders can develop, test and deploy blockchain applications and smart contracts. Moreover, the BaaS platform provides all the necessary infrastructure and operational support, ensuring that the applications run efficiently.  BaaS providers include major companies like Microsoft, IBM, SAP, Amazon, Oracle, and Hewlett Packard. These providers are nurturing blockchain adoption among business because the platforms enable companies to engage blockchain projects without having to spend anywhere near as much money as they would developing customized blockchain solutions independently.  As more businesses look for convenient and cost-effective ways to implement blockchain technology, BaaS collections will most likely continue to expand. Keeping an eye on the emerging BaaS space can help an HR department choose the right provider for (future) company needs.  3.  Blockchain will be less associated with cryptocurrency & possibly rebranded.  Blockchain was born and bred to protect Bitcoin’s infrastructure— but now ledger technology is leaving the cryptocurrency nest to explore more business endeavors.  Blockchain’s association with the volatile cryptocurrency market has potentially diluted its reputation. There are still negative connotations with cryptocurrencies, including wild price swings and the perceived link to people buying illegal items from the dark web.  But mainstream industries, such as manufacturing and retail, are proving the power of blockchain to improve supply chain management and ownership tracking. To break out of the cryptocurrency pigeonhole, it is expected that the blockchain industry will make a concerted effort to establish an identity that’s separate from cryptocurrency—and better educate the business sphere on the advantages it offers, beyond financial transactions.  To take the rebrand a step further, research from Forrester suggests that it might be beneficial for the blockchain industry to drop the name blockchain and replace it with distributed ledger technology (DLT).  4.  Blockchain enabled Internet of Things (IoT) systems. Gartner predicts that the number of installed Internet of Thing (IoT) will exceed 20 billion by 2020. As HR departments integrate more IoT into companies, there is growing concern because these connected devices often open the door for hackers. The same vigilance applied to computers is sometimes overlooked when ensuring the security of the IoT infrastructure. As a company’s digital ecosystem expands to include more IoT devices, they can be left vulnerable to hacks. Blockchain offers strong protections against data tampering by locking access to IoT devices and shutting down compromised devices within the IoT infrastructure if a security event is suspected.  Blockchain serves to effectively decentralize data, which provides a safety net from hacks and fraud. In the digital age, data is fast becoming the most prized asset a company has. If you store all your jewelry, cash and other valuables in one location of your home, what happens if a burglar enters your home and is able to find this location? Because it spreads data across a large network of computer storage spaces, storing records on a blockchain network is like placing your most valuable digital assets across a multitude of places to mitigate your risk of being severely impacted or wiped out by a hacking event.  One of the first blockchain IoT-specific platforms is IOTA, which provides transaction settlements and data transfer layering for IoT devices. IOTA has launched its  Tangle platform, which developers describe as “going beyond blockchain.” This serves as a blockless, cryptographic, decentralized network, where, rather than outsourcing network verification to data miners, users verify transactions of other users. Such IoT platforms promote greater scalability while also eliminating the need to pay transaction fees to data miners. These are both essential factors in a practical IoT network, which could potentially require the processing of billions of micro-transactions between devices daily.  5.  Hybrid blockchains are promising the best of public & private networks.  As blockchain rapidly comes of age, there are generally two communities that have been established. On one side of the tracks, there is a large community supporting public blockchains and arguing for decentralization. On the other side, there is a more niche community—comprised mostly of businesses and their clients—pushing for private blockchains operated by a single entity that also grants permissions to users.   Traditional blockchains (e.g. Bitcoin and Ethereum) are public and completely open, meaning anyone can join the consensus protocol and participate in maintaining the shared ledger. Users often join public blockchains because, apart from operating in a decentralized system, they can offer incentives for mining or staking.   But public blockchain have limitations, including visibility. Data is completely transparent so anyone can access it, presenting a privacy concern for many uses. In some blockchain use cases, data would need to be restricted and a public blockchain cannot do this. Public blockchains also demand high computational power and consume large amounts of electricity. There are also scalability concerns for public blockchains because the consensus protocol places limits on speed and the number of transactions it can process.  Private blockchains operate similarly to public blockchains with an important exception: they are not open to everyone and require an invitation to join. These blockchains are also permissioned networks and can be customized to interact with certain users differently than the general users. Unlike in the public blockchain, provisions can be outlined to determine who is allowed to participate in the network and what specific transactions they are authorized to conduct. While private blockchains address some data security concerns, the main drawback is that they are not as decentralized as the public blockchains.   To build a bridge, hybrid blockchains are being developed to offer decentralized platforms that can restrict visibility of some information on the network. In particular, this model is appealing to regulated markets because it offers the benefits of public and private blockchains in one network.   Through a hybrid blockchain solution, a company can conduct transactions from certain short-term partners and vendors on the public blockchain side. Since the transaction timeline of these partners is shorter, public blockchain is an ideal solution. It would not require the level of trust needed with a private blockchain. The private side of a hybrid blockchain solution can be used to conduct transactions with long term partners. It would operate with a classic permissioned setup, where authorized parties can view, transact and make changes based on permissions they are given. This private network is fast, scalable and secure. However, adding more parties and establishing their trust takes longer than on a public blockchain so it would only be reserved for transactions with designated users.   6.  Sidechains are improving scalability. For all their power and complexity, blockchains face challenges in scalability and speed. These limit some applications of the relatively new technology. One solution that seeks to improve blockchain efficiency and scalability is the sidechain. As its name indicates, a sidechain is a type of blockchain that accompanies a master chain. In the relationship, the master chain is the parent chain and the sidechain is the child chain.   In order to trade assets from the master chain for assets from the sidechain, the user would first need to send their assets on the master chain to a certain location. This would effectively place a lock on the assets for the time being. After the transaction completes, the sidechain would receive a confirmation and release a designated amount of the sidechain to the user—equivalent to the amount of assets locked up by the main chain times the exchange rate. This also works in reverse to trade assets from the sidechain to the master chain.   As sidechains store data and process transactions, they help to uphold the integrity of the master blockchain while making it smaller and more agile. When implemented correctly, sidechains relieve the master chain of some of the work, helping to solve the inherent scaling problem associated with blockchain solutions. Sidechains have practical applications for stock exchanges.   7.  Artificial intelligence (AI) & blockchain are teaming up.   While both AI and blockchain involve high levels of distinct technical complexity, there is potential for these two technologies to team up and score major technological victories in the next five to ten years.   The first change win might be in optimizing data management. Blockchain currently relies on hashing algorithms for data mining and these operate in a brute force style, meaning the algorithm inputs all possible sequences of characters until it finds the one that matches with the verification process. This demands extra steps, lags and effort. AI can step in to offer an intelligent data mining system that streamlines the entire process and cuts down total costs exponentially. This streamlining also has implications for improved energy consumption for blockchains.   AI can infuse natural language processing, image recognition and multi-dimensional real-time data transformation capabilities into a blockchain’s peer-to-peer linking. This allows data miners to turn a large-scale system into a series of micro-economic environments. In turn, this can optimize data transactions in a secure and effective manner. Most importantly, machine learning intelligence adds flexibility to the process.   On the flipside, blockchain’s data decentralization technology can help AI step up its game in creating better machine learning models. Introducing secure data sharing across systems, which have traditionally stored and operated data in an isolated manner, introduces higher quality data. Richer data means better models, better predictions and better insights.   Data decentralization will offer companies of all sizes access to analytics and insights they could not possibly generate from an individual data source. When AI’s deep learning algorithms gain access to multiple data points from multiple data pools that have been standardized by blockchain, the competitive advantage of an AI technology will no longer be about finding the data itself. Nor will it be about having the resources and funds to gather the most data. Instead the focus will be on writing the most innovative algorithms. This evolution ushers in a new era of scalability for deep learning where AI finds itself in new marketplaces, opens doors for smaller players and gains trust with the public at large.   The future looks bright for blockchain and it will likely innovate business processes in many industries, including human resources. However, its widespread adoption and full potential have yet to be seen. The next phase of development for blockchain will be in addressing scalability and accessibility challenges, which will pave the way for more applications and varied use cases across more industries.   Amid the rapidly evolving digital landscape, one thing is clear: blockchain is in a state of metamorphosis with many disruptive trends on the horizon. For HR professionals, it is important to keep an eye out on how this nascent technology is impacting various industries and making its way to the world of work.  

David Anderson | 22 Aug 2019

The smart city. The connected city. The intelligent city. The agile city. The data-driven city. The integrated city. The blockchain-powered city. The sustainable city. The future-proof city. There is no shortage of vision, aspiration and genius when it comes to today's cities. Still, they must attract foreign direct investment, along with blue-chip firms, start-ups and top talent, and have access to the best technology to drive growth. But growth in the world's GDP won't come from the same old sources. It will follow the fortunes of tomorrow's most competitively smart cities, many of which are overlooked urban areas with opportunities to leapfrog established megacities that were once the de facto homes to the world's most successful employees and businesses. Through investment in information and communication technologies that enhance the quality and performance of urban services, such as energy and mobility, these smart cities are competing for the highly skilled workers who will sustain their organizations and ensure growth. The Questions Facing Employers and Talent   Deciding where to work, live and raise their families, these employees prioritize the human and societal factors cited in Mercer's recent study, People First: Driving Growth in Emerging Megacities. Workers were asked to rank 20 decision-making factors by importance against four vital pillars: human, health, money and work. When deciding which city to live and work in, respondents ranked human factors — such as overall life satisfaction, safety and security, environmental considerations and proximity to friends and family — as the most important. The study also looks at how some of the fastest-growing global cities, from Kolkata, India, to Lagos, Nigeria, grow economically, attract people, enable new residents to thrive and lay a path toward a better life for its citizens. From these insights, city leaders and policy makers around the world can glean valuable lessons on what is not only needed to sustain but also power growth. Indeed, in an increasingly urbanized world, where highly skilled talent is scarce, employers and cities are asking important existential questions: ·  What makes professionals move to and stay in a particular city? ·  How can employers and cities retain talented workers with the high-level skills demanded by rising start-ups, upcoming unicorns and global brands in emerging hot spots? ·  What, exactly, do productive employees want from an employer and home city? The answers may lie in how well the world's emerging megacities prioritize their transformation from urban afterthoughts to global power players. Thus, it's helpful to take a comparative look at a sampling of cities that show serious potential to succeed and sustain their success over the long term. What they have in common is a commitment to regional superiority of opportunity and resources, to establishing themselves, in their way, as versions of Silicon Valley — where tomorrow's most highly skilled talent can thrive, building purposeful lives amid the evolution of artificial intelligence and advanced technology. From 'Cyberabad' to Other Contenders   A prime example of an emerging megacity is Hyderabad, the capital of India's southern state, Telangana. With a population of eight million, Hyderabad is the sixth most populous urban agglomeration of India and is popularly known as Cyberabad — the "Silicon Valley of India" — for its growing reputation as a global hub for information technology. (Megacities are defined as having populations of 10 million or more; the cities discussed in this article have either reached that milestone or are projected to.) Along with IT, though, Hyderabad is experiencing growth in the automotive industry and pharmaceuticals, as well as its traditional agricultural base. With extensive investment in digital and property infrastructure, the city is upgrading itself to host IT companies, especially via the development of its HITEC City, a township with state-of-the-art tech facilities for American IT giants. Retail has thrived, as well, as international and national brands open stores in the city. By contrast, the somewhat larger city of Chennai (a 2017 population of 9 million and a $59 billion GDP as of 2014) is known as the "Detroit of India" and leads the nation's automotive industry, but growth in software services, medical tourism, financial services and hardware manufacturing (along with petrochemicals and textiles) also add to its economic depth. It's also a major exporter of IT and business process outsourcing services. For sheer economic scale, the emerging megacities of China are impressive. With a 2014 GDP of $234 billion and a 2017 population of 14 million, Chengdu is Western China's No. 1 metropolitan area, and it thrives with emerging industries — notably an energy conservation and environmental protection industry that makes it an attractive destination for skilled workers. Indeed, the emphasis on "new energy" industries (in materials, hybrid and electric automobiles and IT) is propelling Chengdu. Meanwhile, China's second largest eastern city, Nanjing (with a 2014 GDP of $203 billion and a 2017 population of seven million) is dominated by service industries, led by financial services, culture and tourism. IT, environmental protection, new energy and smart power grids are becoming additional pillars of Nanjing, and a wealth of multinational firms have been establishing research centers there. Nanjing's unemployment rate has been below China's national average for several years. From Kenya to Jalisco   While China and India may dominate the scale of emerging economies, other geographies are very much on the emerging megacity map. Nairobi is not only the capital and largest city in Kenya; it is also on track for population growth from four million in 2017 to 10 million by 2030. Home to more than 100 international organizations, such as the United Nations Environmental Programme and The World Bank, as well as regional headquarters for major manufacturing and IT corporations, Nairobi shares its agricultural preeminence with a foothold in today's and tomorrow's economy. Likewise, Guadalajara (a 2014 GDP of $81 billion; 2017 population of five million) is more than the capital and largest city of Mexico's Jalisco state. It's known as the "Mexican Silicon Valley," according to the Financial Times, and is considered the city with the highest investment attraction potential in Mexico. It's the sort of social/cultural center — with an International Film Festival and International Book Fair — that strongly complements the growth of high-tech industry, chemical and electronic manufacturing, making it a hemispheric magnet for talent. These cities each make their case for talent in their own ways, creating an environment for highly skilled employees to thrive across multiple dimensions. This requires putting people first and focusing on what matters most to them. Mercer's Emerging Megacities study shows that employers often misunderstand what motivates people to move to a city and remain there: Human and societal factors are more important than money and work factors. For emerging megacities, the model of Silicon Valley may be a potent aspirational strategy, but in each case, they must prove themselves as places to live—today and tomorrow. Originally published in BRINK News.

Katie Kuehner-Hebert | 22 Aug 2019

As companies continue to migrate to all things digital, this wave of transformation will inevitably wash over every area of work, digitizing everything from finance functions and tax compliance to data analytics and beyond. Approximately 73% of executives predict significant disruption within their industries in the next three years, according to Mercer's Global Talent Trends 2019 report. This number, up from 26% in 2018, is greatly due to digital transformation. More than half of executives also expect AI and automation to replace one in five of their organization's current jobs. While this might worry some organizations, these two earthquake changes stand to create 58 million net-new jobs by 2022. Business leaders responding to Mercer's annual survey have mixed opinions on the economic growth these technological advances will have across the globe. Digitization may promise increased opportunity, but it also bodes increased competition from a host of new — and possibly more nimble — players. Assessing the Economic Outlook Across the Globe   The turbulence within the global economic landscape is compounded by uncertainty over how trade tensions between the U.S. and China are resolved, according to the Mercer report Economic and Market Outlook 2019 and Beyond. The U.S. economy may slow somewhat due to higher interest rates, while the Chinese economy will remain dependent on how the trade tensions are resolved. Other emerging market economies should continue to grow at roughly the same pace, with the possibility of stronger growth when trade tensions ease. Mercer's Themes and Opportunities 2019 research report notes "mounting evidence of over extension of credit" is creating further white-water turbulence, with the uncertainty over how the central banks' retreat from market involvement after massive liquidity infusions will impact economies. The report also notes that there is a distinct possibility "the pace of globalization could slow, pause or even go into reverse" due to political influence, particularly on trade. In addition, there are increasing expectations from governments, regulators and beneficiaries to have asset owners and investment managers incorporate sustainability as a standard action. Digitally Transforming Tax Compliance   Companies navigating all these shifting sands will increasingly look to digitization to help manage and respond to both opportunities and obligations — including tax compliance across geographies. This is also a moving target, particularly in Asia, as some countries are now implementing digital technologies to improve their tax collection efforts. In 2015, the average tax-to-GDP ratio for 28 economies in the region was only 17.5%, which is just over half the average tax ratio of 34% among OECD economies. There has been a great deal of progress with the use of electronic filing of tax returns for major taxes in India, Kazakhstan, Malaysia, Mongolia, Nepal, Singapore and China. Moreover, mandatory electronic payments are now required by revenue bodies in the People's Republic of China, Indonesia, Mongolia and Vietnam.1 Digitization and increased tax regulation are also intended to vastly improve collection efforts, though much more push is needed. Governments are making great strides within their tax administration efforts with the aid of digitization — including sending eAssessments to businesses for taxes owed, based on electronic auditing systems.2 If the systems find discrepancies within sellers' monthly tax reports, it automatically issues an eAssessment that includes interest and penalties. Andy Hovancik, President and CEO at Sovos, puts it plainly: "Bottom line — tax enforcement is now embedded in the most important business processes, changing the world of tax and disrupting decades old business processes. As a result, tax is driving digital transformation in finance and accounting departments. Now more than ever, businesses need a new approach to tax automation to ensure compliance."2 Finance executives agree, including Michael Bernard, chief tax officer for transaction tax at Vertex Inc. He states, "Governments worldwide are turning to new forms of compliance, like e-invoicing regulations, which require IT departments to embed workflows in core processes, and real-time VAT compliance checks. In 2019, finance organizations will begin to factor tax considerations into their digital transformation strategies. An effective road map will include actions for using data to link business processes and tax compliance obligations."3 Guiding Business Strategy With Compliance   Digitization alone won't enable companies to better comply with new tax regulations — making compliance a central business strategy will. This includes implementing training sessions across the enterprise to help employees develop a state of mindfulness when it comes to compliance. But in this era of increased accountability, Leila Szwarc, global head of compliance and strategic regulatory services at TMFGroup, states that companies should re-imagine the notion of compliance as a "business enabler" that can distinguish it from competitors.4 According to Szwarc, "Compliance should be seen as a business enabler rather than as a drain on development, but this can only happen if businesses work in an integrated way to bring creative solutions to the related organizational challenges." She continues, "As APAC firms face up to a new regulatory era, compliance teams have a key role to play in both protecting their firms' interests and helping to drive long-term competitive advantage." With an uncertain market ahead and vast changes on the horizon, it's more important than ever to get ahead of the curve and think about how your business can not only survive the wave of digital transformation coming but also thrive with it. Start planning your business strategy, placing compliance and digitization at the heart, with these considerations in mind today, and you'll be better off tomorrow. Sources: 1.Suzuki, Yasushi; Highfield, Richard. "How digital technology can raise tax revenue in Asia-Pacific." Asian Development Blog, 13 Sept. 2018, https://blogs.adb.org/blog/how-digital-technology-can-raise-tax-revenue-asia-pacific./ 2.Hovancik, Andy. "How Modern Taxation is Driving Digital Transformation in Finance." Payments Journal, 16, Jul. 2018, https://www.paymentsjournal.com/how-modern-taxation-is-driving-digital-transformation-in-finance/. 3. Schliebs, Henner. "2019 CFO Priorities: Experts Predict Top Trends." Digitalist Magazine, 18 Dec. 2018, https://www.digitalistmag.com/finance/2018/12/18/2019-cfo-priorities-experts-predict-top-trends-06195293. 4.Szwarc, Leila. "Regulatory compliance – The new business enabler." Risk.net, 18 Mar. 2019, https://www.risk.net/regulation/6485861/regulatory-compliance-the-new-business-enabler.

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