Borderless world presents challenges for North American HR leaders

The world is becoming increasingly borderless. On a daily basis, the Internet peels away barriers of time, distance and language to create a global forum for the exchange of ideas and information. With such interconnected systems, work can easily be performed among many functional areas across cultures, geographies and time zones.

Despite the steady elimination of boundaries across society, government and commerce, the global workforce still faces numerous road blocks that prevent quick response to emerging opportunities.

Many chief human resource officers (CHROs) in growth markets, such as China and India, are planning to increase their workforce presence in North America, Western Europe and other mature markets, according to a recent IBM survey of more than 700 CHROs.

In fact, China and India will continue to be the largest beneficiaries of increased workforce investment over the next three years, with 40 per cent of global CHROs anticipating headcount growth in China and 29 per cent in India.

Other regions where CHROs expect to see significant growth include Latin America (26 per cent), Asia Pacific, excluding Japan (25 per cent) and Russia/Eastern Europe (23 per cent).

The logic is simple: It’s all about expansion. Coming out of the global economic downturn, companies worldwide are eyeing North America as a target for new growth. This applies equally to new market opportunity and talent recruitment.

Opportunities to penetrate new markets and develop new offerings will drive future workforce investment, regardless of region. Businesses have traditionally managed their workforces with an eye toward operational efficiency. But they have not necessarily done so with the creativity, flexibility and speed required to capitalize on growth opportunities that spring from an increasingly dynamic global marketplace.

While organizations continue to develop and deploy talent in diverse areas around the globe at an accelerated rate, the rationale behind workforce investment is changing. Unlike the traditional pattern of movement — in which companies in mature markets seek operational efficiency through headcount growth in emerging economies — we are now seeing workforce investment moving both ways.

These market trends will radically change how Canadian and American companies do business — and how they must recruit and manage leadership and employees.

3 areas to focus on in next 3 years

To make the most of these opportunities and unlock the potential of the workforce, CHROs will need to focus on three critical areas over the next three years: developing future leaders, rapidly developing workforce skills and capabilities, and fostering knowledge sharing and collaboration.

Developing future leaders

Identifying and cultivating creative leaders is critical. With new worldwide rivals battling for market leadership, competition will grow more intense than ever. Leadership that can thrive in this uncertain world, where ambiguity and change are a given, will be at a premium. But the rising competition will also make it harder to find and keep such nimble leadership.

Also, businesses will have less room for error as they launch new services and products, respond to changes in demand and expand their markets. Smart management of a truly global workforce will be key.

Companies will need to cultivate leaders who can tackle this new age of global competition. That doesn’t mean just finding and growing effective managers, it means creative leaders who can think across borders, who can come up with new ways of communicating and collaborating that inspire and connect employees around the world. Companies will need managers who can anticipate and thrive on change in a world where competitors pop up all over, not just react.

Executives at only one-third of the companies IBM talked to said they’re good at picking out such creative leaders. Traditional leadership programs tend to perpetuate an organization’s existing structures but that won’t cut it when it comes to the challenge of managing a borderless workforce that’s always in flux.

Developing workforce skills and capabilities

Also crucial is ensuring the right people do the right jobs in the right places. Managing a workforce becomes daunting as employees are spread around the world and hired from different cultures. It becomes even tougher as employers use more outsourcing and part-time workers to be more flexible.

Over the next three years, more than one-half of CHROs IBM surveyed plan to pursue outsourced hiring. This includes the use of temporary or contingent part-time workers — even to the extent of bringing back retired employees — to inject greater flexibility into their workforces

Yet, companies aren’t prepared. Only 35 per cent of CHROs surveyed by IBM say they can globally deploy people effectively. And just 31 per cent think their companies are effective at rapidly developing new skills.

Fostering knowledge-sharing, collaboration

Equally important is capitalizing on collective intelligence to maintain an innovative edge.

An essential part of any growth-driven strategy will depend on effectively connecting and tapping into an organization’s collective knowledge. This can be accomplished through collaboration, social networking tools and analytics to help HR understand the full impact of efforts. Despite the need for greater access to and sharing of collective intelligence, 78 per cent of CHROs report their organizations are ineffective at fostering collaboration and knowledge-sharing.

So how can we become smarter about managing these emerging trends? If we’re facing a new kind of global competition in which companies from Canada, the U.S, Europe, India and China all vie for the same talent and the same markets, how can we come out ahead?

Technology helped create this new world without borders. Technology can also help companies build strategies for developing innovative future leaders, and for managing more employees across a broader span of time zones, locations and backgrounds.

Analytics can pinpoint not only where top performers are located but what makes them stand out from their peers around the world. It can help identify employees, wherever they may be, who have specific expertise a company needs to deploy right now. Yet companies rarely use analytics to plan ahead, as good as they may be at using data to look backward to identify trends.

Many companies don’t have the infrastructure to analyze the kinds of skills and capabilities their workers have, found IBM. They can’t model potential talent shortages or monitor talent supply and demand.

We all know employees are our most important asset. It’s up to us to decide how we make the most of them — and how they help propel our organizations as we face increased worldwide competition for market leadership and talent.

James Coderre is associate partner of strategy and transformation at IBM Global Services Canada in Markham, Ont.