The changes our society is going through and the changes in our economy require us to take a renewed approach to the human resources function.
Although most employers recognise the need to commit resources to the HR function, in most cases, this is still limited to an operational role.Issues related to employee compensation and staff retention has pushed employers, even larger ones, into a fire-fighting model, and have little to no time to think about HR in a strategic manner. Moreover, we also need to appreciate that micro enterprises (enterprises employing less than 10 persons) cannot be expected to commit resources in a disproportionate manner to HR.
As such, we need a change in our mindset ‒ we seem to have become used to the idea that to grow our economy, we need to grow our workforce. This is simply not the case.
We can grow our economy if we increase the value added per person. Unfortunately, statistics about this key metric do not come easily, and one needs to make several assumptions to come to a conclusion, which assumptions may actually be wrong.
If we need to start from basics, we need to measure the value of our output by sector and evaluate how such value may be increased over time. This immediately puts the HR function on a different plane. It stops being a question of reducing the cost of HR but a question of enhancing its productivity. The public sector should take the lead in this by setting the example, and stop crowding out the private sector from the labour market.
I fear we are ill-prepared for the next wave of change
To me, it is very significant that when one speaks to employers about employee shortages and how they would want to resolve it, the first thing that comes to mind is a more lax approach to work permits for third-country nationals, either through temping services arrangements or through direct employment. This is in itself a strong indication that such employers are only thinking of reducing the cost of HR, ignoring any social repercussions.
Going back to my point that we do not need to increase our workforce in order to grow our economy, two considerations come to mind. First, the private sector is capable of creating employment when it sees a business opportunity. Two days ago, I found out, to my very pleasant surprise, that a private sector company, which has invested significantly in the last 20 years or so, today employs over 900 people.
Fifty years ago, politicians used to yearn for what they called “fabbriki tal-elf”. Therefore, let us leave employment growth to the private sector. The government does not even need to incentivise employment like it used to in the past. Today it needs to incentivise increased value added per employee.
The second consideration is about the private sector. It needs to give priority to the development of HR through various initiatives, such as performance management, skills development, having a work-life balance. Employers should all strive to become an employer of choice because of the value they give to HR.
I fear we are ill-prepared for the next wave of change, which will include the use of artificial intelligence in our work processes, changing lifestyles. and greater emphasis on environmental, social and governance issues.
Unless we do prepare for this wave and adopt a renewed approach to HR, not only at a company level but also at a national level, we will not be able to ride it.