Smart HR 4.0 – how industry 4.

0 is
disrupting HR
Brijesh Sivathanu and Rajasshrie Pillai

1. Introduction Brijesh Sivathanu is

Associate Professor at the
Industries are the backbone of a nation’s economy, and the world has already witnessed three Department of
industrial revolutions in the past that stemmed from major technological breakthroughs over Management, Symbiosis
the past three centuries. Introduction of mechanical machines started Industry 1.0 (eighteenth Centre for Information
century) followed by electricity-powered Industry 2.0 (nineteenth century) and more recently Technology (SCIT)
the computer and internet-enabled Industry 3.0 (twentieth century) (PWC Report, 2017). Symbiosis International
University (SIU), Pune,
In the twenty-first century, Industry 4.0 heralds the innovation of both smart business and India. Rajasshrie Pillai is
smart factory (Shamim et al., 2016). The HR domain is not immune to this phenomenon, and it HOD-HRM and Associate
too must join the bandwagon of disruption or be disrupted. Smart HR 4.0 paints a vivid canvas Professor at the
for digital transformation in the HR functions of recruitment, onboarding, learning and Department of
development, social sharing, and crowd-sourced feedback based on “people science.” Management, Pune
Institute of Business
Smart Human Resources 4.0 (SHR 4.0) is a new concept that is evolving as a part of the overall Management (PIBM), Pune,
4th Industrial Revolution and characterized by innovations in digital technologies such as Internet- India.
of-Things, Big Data Analytics, and artificial intelligence (AI) and fast data networks such as 4G
and 5G for the effective management of next-generation employees (Hecklau et al., 2016).
As with any change, SHR 4.0 will have its own set of implementation challenges and a set of
benefits based on how the organization adopts it.
SHR 4.0 implementation challenges are:
n selecting the right set of new technological tools;
n overcoming the existing organizational culture; and
n managing multi-generational employee expectations.

SHR 4.0 adoption benefits are:

n attract, develop, and retain new-age talent;
n efficient and faster HR operations; and
n leaner HR departments.

To understand how to overcome the above-mentioned challenges and realize various benefits,
the authors briefly discuss the SHR 4.0 disruptions from an HR function’s perspective.

2. SHR 4.0 disruptions

Traditionally, the HR department of any organization is responsible for managing all aspects
related to employee life cycle, from recruitment to exit. While the role of HR is key to

DOI 10.1108/HRMID-04-2018-0059 VOL. 26 NO. 4 2018, pp. 7-11, © Emerald Publishing Limited, ISSN 0967-0734 j HUMAN RESOURCE MANAGEMENT INTERNATIONAL DIGEST j PAGE 7
 organizational growth, today most of the HR departments across different organizations are
seen to be majorly playing only an operational role owing to their highly inefficient processes
that are further worsened by inadequate or obsolete technology infrastructure.
Technology, on the other hand, is undergoing rapid changes. Emerging technologies such
as Internet-of-Things are enabling physical things to connect to the digital world, resulting in
the generation of a huge amount of real-time organization data, which is simultaneously
aided by massive scalable storage capacities using the cloud technology. The computing
power has also grown exponentially keeping its trend as per Moore’s law, which has
enabled automation and faster analysis of organization’s data with the help from advances
in Big Data and AI technologies.
Not only technological innovations, the industry is also witnessing changes in employee
generations joining the organizations, and it is expected that by 2020, half of the workforce
will comprise millennial or Gen Y (born between 1980 and 2000) employees. Gen Y and
Gen Z (born after 2000) have grown in the era of internet, social media, and smartphones
and have different expectations from their employers such as anytime–anywhere
collaboration, instant feedback, open culture, and data-driven decisions.
SHR 4.0 – powered by emerging technologies and new generation employees – has the
potential to transform end-to-end HR processes covering all aspects of talent onboarding,
talent development, and talent off-boarding as discussed below. After an extensive review
of extant literature, the authors propose a Smart HR 4.0 conceptual framework (Figure 1).

2.1 Talent on-boarding

n Proliferation of smartphones has led to smart apps on individual’s mobiles. Prospective

Gen Y and Gen Z employees can be reached by tactically displaying highly relevant job

Figure1 Smart HR 4.0 conceptual framework

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 advertisements in mobile apps based on individual’s profile and preferences saved in
those apps’ settings.
n Big Data and AI help to automate candidate’s resume and job description matching
that would select only those profiles for interviews that have a high probability of fulfilling
the job requirement. This would reduce enormous amount of time and manual efforts
that is currently being spent on resume screening.
n Interview techniques can include automated and customized testing instead of generic
testing that will predict better on-the-job performance in future. Faster data network
connections (4G/5G) are enabling remote video-based interview discussions in real time,
which will reduce overall recruitment cycle considerably. AI chat-bots can assist in
interpreting and validating candidate responses in real-time reducing the interviewer bias.
n Post selection, new joiner induction programs can be customized for that individual
rather than traditional one-size-fits-all program. Augmented reality/virtual reality (AR/
VR) would help new joiners to be guided with various office processes and layouts to
make sure that employees become productive from day one.

2.2 Talent development

n After employee on-boarding, knowledge and skill enhancement is an essential requirement

for an organization to succeed in today’s competitive environment. AI can assist in
identifying knowledge gaps for each employee based on the skill demands in the market.
n Gen Y and Gen Z employees would like to own their career planning and may undergo
only those trainings that would help them achieve their professional goals. Again, faster
networks will enable virtual trainings which can be taken from anywhere at any time.
n Similar to training, performance targets can be set up on an individual basis instead of
the same goals for the same band of employees. AI would assist in the individual goal-
setting process. Employee performance feedback can be an ongoing activity as
compared to a once-in-a-year ritual.
n Compensation and benefits structure can be derived from the skill supply and demand
gap analyzed from the employee database. Promotions can be based on actual
contribution of the employees measured using objective KPIs instead of only seniority-
based progressions.
n Other than compensation, employee health is an important aspect from organization’s
productivity point of view. The wellness apps and Internet-of-Things–based smart
wearable devices can help employees track their fitness parameters in real time that
could lead to reduction in sick leaves.

2.3 Talent off-boarding

n The intention to leave the organization can be predicted through analyzing employee
profiles. HR can take proactive steps to prevent high performers leaving the
organization by providing better opportunities internally.
n Low performers can be identified based on past job performance year on year and training
outcomes instead of solely based on supervisor’s bias. Performance improvement
programs can also be automatically tailored according to individual’s skill gaps.

While the prospects of SHR 4.0 technology adoption seem good, HR departments would
also require management support for changes in organization structure as well as
leadership style.

VOL. 26 NO. 4 2018 j HUMAN RESOURCE MANAGEMENT INTERNATIONAL DIGEST j PAGE 9

 2.4 SHR 4.0 support structure
A flat hierarchy-based agile organization structure will create a conducive environment for
the implementation of SHR 4.0. A flat hierarchy would reduce communication layers and will
speed up decision-making. Decentralization of power will make project teams on the field
work autonomously and adjust immediately as per project demands.
Leadership styles needs be more open that drives a learning and innovation culture,
focusses on knowledge enhancements, and rewards out-of-the-box thinking. Leadership
will also have to initiate organization culture changes in a way that it would not create
conflicts between multi-generation employee groups. SHR 4.0 would also require
technology modernization in accordance with long-term organization goals to attract the
best Gen Y and Gen Z talent.
Automation of many HR processes is expected to reduce HR team size and provide HR
departments more time to play a strategic role in the organization (Angrave et al., 2016).
The following case study illustrates how analytics helped the organization to retain talent
and reduce attrition related costs.

3. SHR 4.0 case study – attrition reduction using people analytics

Credit Suisse is one of the largest financial institutions in the world, employing more than
48,000 workforce globally for its investment banking, private banking, and asset
management services. The company was incurring huge costs owing to higher voluntary
employee attrition (Jalali and Singh, 2018).
The company deployed SHR 4.0 analytics methodology to identify employees at risk of
attrition by profiling each employee’s role maturity, company experience, location,
attendance at events, manager ratings, promotion status, etc., and then came up with a
score that indicates the intent to leave the organization.
Based on the score, the employees at a high risk of attrition were identified and counseled
by the HR department that offered compelling value propositions to the employees through
various internal opportunities to retain them in the organization. This process over one year
resulted in a 1 per cent decrease in the attrition rate, saving $75-100m for the organization
(Jalali and Singh, 2018).

4. Conclusion
Keywords: An organization would require a successful SHR 4.0 strategy to cope up with Industry 4.0
Emerging technologies, transformation challenges. Emerging technologies such as Big Data and AI will automate
Industry 4.0, most of the HR processes resulting in efficient and leaner HR teams. Smart mobile apps
Credit Suisse,
Employee attrition,
along with AR/VR will attract next-generation talent toward the organization and facilitate
People analytics, remote interactions between teams. Both, organization structure and leadership style
Smart HR 4.0 changes would be required for efficient SHR 4.0 implementation that would allow HR
departments to play a more strategic role in the overall organization growth.

References
Angrave, D., Charlwood, A., Kirkpatrick, I., Lawrence, M. and Stuart, M. (2016), “HR and analytics: why
HR is set to fail the big data challenge”, Human Resource Management Journal, Vol. 26 No. 1, pp. 1-11.
Hecklau, F., Galeitzke, M., Flachs, S. and Kohl, H. (2016), “Holistic approach for human resource
management in industry 4.0”, Procedia CIRP, Vol. 54, pp. 1-6.
Jalali, A. and Singh, K. (2018), “People analytics: a data-driven HR approach to business success”,
available at: www.capgemini.com/2018/02/people-analytics-a-data-driven-hr-approach-to-business-
success/ (accessed 10 March 2018).

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PWC Report (2017), “Industry 4.0: how digitization makes the supply chain more efficient, agile, and
customer-focused”, available at: www.strategyand.pwc.com/reports/digitization-more-efficient (accessed
2 March 2018).
Shamim, S., Cang, S., Yu, H. and Li, Y. (2016), “Management approaches for industry 4.0: a human
resource management perspective”, 2016 IEEE Congress on Evolutionary Computation (CEC), IEEE,
pp. 5309-5316.

Corresponding author
Brijesh Sivathanu can be contacted at: brij.jesh2002@gmail.com

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