Employees are the most essential asset of the organization. However as the organizations grow and become global, they require a strategic shift in leadership styles, talent acquisition and human resources. Technology has grabbed the driver seat and are forcing organizations to redesign jobs in order to incorporate technology solutions. Also the demographic structure has changed as more millennial join the workforce thus forcing the companies to alter their practises to meet their expectations.
Human resources require innovative and bold steps to manage this new world. The current trends challenge the existing practices: How people are evaluated and managed, how leaders are selected and how they operate. HR domain now requires monitoring and measuring of organizational culture, discover new techniques for employee acquisition and retention. It is in this space that human capital consulting has emerged as a solution provider to organizations and provide them with varied strategies to deal with new and extreme HR challenges.
The human capital consulting industry owns its existence to the management consulting industry HR consulting deals with activities, tasks and decisions related to human resources. HR Consultants possess the role of guiding clients on strategic integration of effective HR processes, programs and practices with business practices and also assist organizations in implementing best practices in human resources that are prevalent in the industry.
Human Capital Consulting leverages research, analytics, and industry insights to assist and execute critical programs from business driven HR to innovative talent, leadership and change management programs. As organizations hire more and more professionals to seek advice, consulting firms need to pull up their socks. Also the number of firms providing HR solutions has increased tremendously, thus pushing companies to discover new and innovative solutions for the clients.
Leveraging BIG DATA:
Big Data is the new buzzword and is reverberating in the business world. Consultants are constantly hiring employees with technology background to get accustomed to data quickly and use their knowledge to give real time solutions to clients. Big Data usage ensures tracking, analysing and sharing of all employee-data which assists in delivering to the clients not only more insights about employees but also suggest innovative methods to tackle the problem.
BIG Data is essential for human resources and learning and development because it allows conversations and connections which have tended to be in realm of the immeasurable to be captured and leveraged. Hence, we see client seeking assistance with performance data, attrition problem, training need analysis and recruitment predictions usually turn to consultants as they are generally unaware about the utilization of the available data.
Offering Niche Services:
Management Consulting has been prevalent for long in the market. But Human capital consulting to came to existence a little while ago. Owing to large expansion of organizations, growing structural complexity, building hierarchies and most importantly increasing manpower forced organizations to pay heed to their talent pool and develop it to create a competitive advantage in the market. Human capital consulting firms today offer end-to-end solutions to various human capital issues faced by organizations. Few service offered are:
- Developing balance Scorecard Metrics
- Building/rebuilding performance management systems
- Compensation and payroll administration
- Transforming organization culture
- Leadership training
- Competency modelling etc.
Also there are start-ups and other SMEs that offer only talent acquisition solutions to clients (SutraLite, HiringMonk etc.). Thus offering niche services is a growing trend and Human capital consulting has penetrated one step deeper in the market by offering to client’s exclusivity and dedicated solutions to their problem to ensure them an edge over the competitors.
Using innovative tools for analysis:
The start-up boom is increasingly challenging other big organizations in terms of technological advancement. The ROI factor is very important for small organizations and therefore they are investing heavily on new disruptive innovations to reap the best out of minimum investment. Many large organizations lack the required manpower and technology base to compete with them and hence are turning to consultants.
Human Capital consulting is seen to be utilizing various new technologies like Cloud Computing, Mobile App, SaaS, Crowdsourcing and hence coming up with breakthrough solutions for the client. It is a growing trend in human capital consulting to suggest clients to undergo digitalization in order to survive in the market. For the same reason, consulting firms are seen rapidly purchasing the new technologies and employing millennial to develop customer centric solutions for clients.
Entering the blue oceans:
Human Capital Consulting was a growing fad in the IT and other technology driven sector but was less prevalent in other sectors like manufacturing, hospitality etc. or we can say it was more required by organizations employing knowledge workers than other sectors. However, recently, Human Capital Consultations are also taken by other sector like Healthcare and Automotive etc. There is a growing trend in the Human capital consulting world to find new non-competing sectors and seek clients there by making them realize the importance of human capital. Also not only the differentiation is being created by entering uncontested markets but also uncontested services.
Culture training, Employee engagement survey and consultation are terms and issues which were unseen few years ago. But human capital consulting for these issues is an emerging trend.
Developing Knowledge Management Systems:
Apart from the focus on clients, Human capital consulting firms are heavily focusing on building strong knowledge management systems. In the world of consulting, the only differentiation is cost, velocity and design. Firms are building repositories globally to ensure quick solutions to consultants. These banks save a lot of data regarding projects and research work which helps the consultants to deliver fast and best solutions to client. Enhancing KMS is also a growing trend seen in consulting firms.
The emerging trend is also to prepare for clients benchmarking reports and based on the reports suggest organizations to bring about strategic changes to align the HR functions with business functions. Human Capital Consulting firms conduct surveys globally and across sectors to gain insights on industry best practices and also to discover trends in the market. These reports are of great value to the client and consultants use these reports to substantiate their solutions for the clients.
Ernst & Young, Deloitte, Aon Hewitt, Kelly, Mercer etc. are few HR consulting firms that conduct surveys on various functions of HR and design/develop frameworks for various issues like performance management, compensation design, competency building etc. for the clients.
Apart from these developments in the field of Learning and Development, Leadership training etc. are few other trends seen in this domain. Human Capital Consulting is in itself a new wave. Existing consulting and technology firms have leveraged their data and manpower to develop it but now with the growing issues in talent management the demand for it has increased tremendously. With further innovations and new practices by organizations globally, competitions is likely to increase to stay ahead in the race and hence new trends will emerge in consulting firms too, to offer unique and differentiated solutions.
The article has been written by Neha Agarwal. She is presently pursuing her MBA from XIMB.