The Australian economy’s transition away from a reliance on mining and manufacturing investments has created new and exciting opportunities for growth in other sectors. But ensuring that your organisation has the necessary talent to meet the evolving needs of the business is no easy task. We have identified five main trends in HR in Australia that are shaping the HR value statement and driving the ongoing development of HR capabilities. These trends are: Digitisation, Innovation, Flexible Working, Cost Scrutiny and Optimisation of the HR Model.
1. Digitisation
In Australia, the shift towards HR Information Systems such as Workday and SuccessFactors and other apps that deliver HR services has enabled the offshoring of many process-oriented HR roles to lower cost locations. There are now far fewer entry-level HR roles in Australia, which raises a question about HR talent pipelines here in the future. Technology is changing the way Australian companies think about and design their employee experience. A good example is the development of a mobile app called “Sidekick” by Commonwealth Bank of Australia. This app provides employees with a single platform to handle all their HR admin and support and employee collaboration on their mobile devices. Within two weeks of rolling out the app, 20,000 employees had actively adopted it.
2. Innovation
Innovation is a critical theme of the current Australian government and Prime Minister Malcolm Turnbull. The mining boom is a thing of the past and the “Ideas Boom” is the future of Australian jobs growth. Innovation has pervaded the corporate landscape and it is a key priority for many Australian companies as a means of competing on the global stage. HR leaders are excited about innovation and many are actively involved in innovation from a leadership, capability and culture perspective. Many HR leaders are aiming for every employee to feel like a “Chief Innovation Officer”. Australian innovation consulting companies such as Fusion Labs are having great success partnering with HR leaders in many top companies to design and embed tailored innovation processes and programs.
3. Flexible work arrangements
With the very high cost of home help in Australia, an increasing number of female (and some male) HR professionals work part-time or have a high degree of flexibility built into their work-life routine. Companies such as Westpac, Telstra and Lend Lease lead the way in providing flexible and part-time working arrangements. As a result, Australia is moving towards output-based performance management rather than the old-fashioned industrial era input/attendance/tenure-based paradigm. Many large organisations have now announced that a significant number of their roles are flexible. Start-ups and tech companies have always been this way. Part-time, compressed weeks (doing five days in three), late starts and early finishes or working from home are some of the most common flexible arrangements. The move to full flexibility has been ‘demand-driven’ by employees, particularly millennials and those with carer responsibilities.
4. Cost scrutiny
On the global stage, Australia ranks as a high cost location. HR roles in Australia continue to be offshored, downsized or consolidated. Over the last five years, many multinational companies have reduced employee headcount in Australia by moving as many roles as possible to low cost locations such as India, the Philippines and Indonesia. In Australia, HR costs are continually scrutinised for cost vs value.
5. Optimising the HR model
Virtually all companies of size in Australia have the Ulrich model. Now the focus is to optimise, optimise, optimise. Some organisations are moving to an "HR consulting team" model where they are merging HRBPs and COE specialists into one team of versatile players that are allocated work on a project basis rather than being assigned to a function or client group. It's early days, but those sitting in this model love it because of the variety and development it allows. How are these trends impacting HR capability? HR leaders in Australia are rapidly evolving as a result of these trends. Gender diversity, and more recently cultural diversity, are high on the recruitment agenda. Companies in Australia are demanding HR leaders with the following attributes:
- Change agility
- Resilience
- Resourcefulness
- Creative thinking
- Ability to contribute to the global business agenda
- Strategic thinking and influencing
- Ability to simplify
- Commercial acumen
A final word on the Australian economy… Property prices and the cost of living continue to increase steadily, particularly in Sydney and Melbourne. Paradoxically though, Australia remains in a so-called "income recession" where salaries are flat or decreasing because of falling company profits, lower government revenues and increased competition for jobs as a result of offshoring. However, the Australian economy continues to experience moderate growth as it transitions from a mining/manufacturing-based to a service-based economy.
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