HR Platform for the Competitive Advantage in the Age of Industry 4.0

Since today’s high technology and external environment highly change, current enterprises have to be more flexible and have the agile abilities. Not only having agile abilities is enough, but also they need to be able to use these abilities effectively.

There is a common opinion that being made the manufacturing process and other organizational tasks via technological facilities might result in the layoff. However, the reality isn’t essentially so. Jobs people have isn’t routinely be lost, however, their jobs can go through certain transformations that must be accepted. New working positions will be able to demand more complex tasks as a result of automatization. Therefore, the changes in all processes of enterprises and manufacturing in the age of Industry 4.0 have required the qualified human resources.

HR practices like training, staffing, compensation, performance appraisal, job design should strategically drive organizations into learning and innovation. Managers have to enhance both individual learning and organizational learning by redesigning the human resources (HR) practices for the innovativeness, flexibility, knowledge management capacity, creativity. To provide knowledge and competence related to new technologies and processes of Industry 4.0 in companies, all functions of human resource management need to be integrated and operated as a whole. Current enterprises should focus on strategic human resources management. As a strategic business partner, HR helps to identify and develop the employees who have the necessary competencies for excellent performance by building the recruitment systems, training programs, performance management, and compensation programs.

Hecklau et  al. (2017) have identified the competencies needed in Industry 4.0 by examining the many studies. They categorize the competency into four such as personal, domain, social and methodological elements.

Personal competencies include employees’ motivations, attitudes, as well as social values. These competencies are purely personal, they are difficult to train. For this reason, job specifications should be determined according to the needs of new business processes. In recruitment, people who have different skills, are compatible with the culture and strategic goals of the organization, open to new experiences should be chosen. By means of this, not only performances will be increased, but also resistance to change will be declined. Resistance to change can create an obstacle for enterprises by invalidating the financial investments and slowing down or disrupting the transformation and development. Even if people initially have enthusiasm and support for a dramatic change, these enthusiasm and supports might disappear as they have difficulty in the solution of problems. Because the solution of the problem means costs and sacrifices for them. For this reason, the change in organizations should be gradual and slow. The reasons for the change should be explained and some substantial evidence for the changes that will be able to bring success should be shown. Leaders need to support people to cope with stress, anxiety, and depression induced by change. Both having a reliable leader who has a loyalty to change and the existence of an attractive vision are considerably important to change.

Comprising the elements skills and knowledge, domain competencies are equal to technical competencies such as knowledge networks, understanding and writing codes, awareness of cybersecurity, deeper process understanding, thinking and acting. Not only financial compensations but also nonfinancial compensations should be offered to employees who have domain competencies in order to attract and retain them. Thus, enterprises will be able to create greater value than their competitors.

Methodological competencies include all abilities and skills for general problem-solving and decision-making. In addition to training and development programs, it should be provided for attending relevant subordinates on decisions in order to improve the methodological competencies. This has many benefits. The subordinates feel important themselves and they are motivated, because their ideas have been asked for. They are more willing to implement the decision by considering their contribution to the decisions taken. Over time, subordinates develop by learning how to make decisions under various conditions.

Social competencies include attitudes, abilities and skills to form social relationships easily and cooperate and communicate with others. These competencies enable a person to reach common goals at a fair level in social interactions. In the such term which the human-human, human-robot, and robot-human relationships are normally accepted due to automatization and robotization, humans must be given safety and be motivated. They should be offered opportunities to maintain their status, to achieve self-actualization, to gain the acceptance of others by expressing themselves.

We can say in short that today’s enterprises firstly need to determine their strategies to adapt to changes in environmental conditions, second they need to weight aforesaid competencies in harmony with these strategies. Afterward they should try to provide employees to gain these competencies via the functions of strategic human resources management. These are the competencies that will ensure sustainability in Industry 4.0.

Source Material: Koçyiğit, Y. (2020).  Building and Maintaining a Competitive Advantage in the Age of Industry 4.0. Ö. Özçelik (Ed). In “Studies on Interdisciplinary Economics and Business - Volume III” (p. 323-332). Berlin: Peter Lang GmbH