Abstract
This chapter identifies the drivers and challenges of the fourth industrial revolution. The fourth industrial revolution consists of artificial intelligence, big data, robotics, and many others technological innovations. The recent transformation in the global environment is affecting the way businesses are conducted, managed, and the way governments and societies are run. Today, business analysts are faced with the challenge of managing both human and digital workforce effectively without making any stakeholder in the business environment worse off. Hence, human capital management in the fourth industrial revolution involves effective development and deployment of human resources, artificial intelligence, and robotics to achieve organisational goals and objectives. It is expected that the principles underlying human capital management—planning, staffing, development, compensation, and investment in digital workforce—will become more intense and complex.
TopHuman Capital Management
Human Capital Management (HCM) is a comprehensive set of practices for recruiting, managing, developing and optimizing the human resources of an organization (Rouse, 2019). By this definition, it is depicted that management has to adopt an approach to human resources management that perceives employees as assets that can be invested in and managed in order to effect maximum profit for the success of the organization.
Swanepoel, Erasmus, Schenk and Tshilongamulenzhe (2014) had a similar perspective in defining Human Capital Management (HCM) from a business-based perspective and pointed out that “it is a philosophy of people management based on the belief that human capitals are uniquely important to sustained business success. An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Human Capital Management (HCM) is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies”.
This task of managing human capital encompasses a number of functions, starting from bringing people into the organization, then train, develop and retain them. Employees need to be fully integrated into the socio-cultural environment of the organization, though these main tasks seem to be costing management’s time, they are expected to perform even harder with the 4th Industrial Revolution.
Key Terms in this Chapter
Third Industrial Revolution: This period started in late 1900s, and was marked by automated production, electronics as well as the beginning of computers’ use.
Industrial Revolution: Major changes in manufacturing, technology, transportation, and other domains that cause major transformation and adaption of human kind.
First Industrial Revolution: The first period of major changes that started in late 1700s. It was characterized by mechanical production, railroads invention and steam power.
Human Capital: A set of knowledge, skills, abilities, or capabilities and experience possessed by an individual or a group of people, considered in relation to the value to the organization or a country.
Fourth Industrial Revolution: This period marks the proliferation artificial intelligence in various industry, which took place since the beginning of 21 st century. It is affecting human lives in many different ways through its aspects of artificial intelligence, big data, robotics and many more to come.
Second Industrial Revolution: The second period of major changes in human kind that started in late 1800s. The major characteristics of this period are mass production, electrical power, and the beginning of assembly line system of production.