A few weeks ago I had the pleasure of visiting the Digital HR Summit in Amsterdam. It was an excellent event with some of the best speakers I’ve listened to. Don’t worry if you missed the Amsterdam edition – on 19 and 20 November 2019 the next edition is happening in Nice. Advertized as the Davos of HR, the conference features speakers like Dave Ulrich, professor of business at the University of Michigan, Jason Averbrook, thought leader and futurist, and Julian Birkinshaw, professor at London business school. For more information, go here.
Mark van Dongen is Head of HR Mining Operations at ArcelorMittal. He is a seasoned HR professional and in this interview we speak about automation, demographic changes in the workforce, and digital HR.
The full interview transcript can be found below.
Erik: Hello everyone. Welcome to a new episode of AIHR Live. I’m here with Mark van Dongen. Mark thank you for being here.
Mark: Thank you very much for having me here.
Erik: Mark, could you please briefly introduce yourself?
Mark: Of course, thank you. Yeah, as I said, my name is Mark. My background lies in the army, I did military academy in the Netherlands, left the army as a Major, and since then I’ve actually worked in HR in various international roles. Both European and global roles. Worked out of the Netherlands, Germany, Switzerland, Saudi Arabia for a number of years and at the moment work in Luxembourg where I’m the head of HR mining operations, for which indeed at the moment we’re doing this interview while I’m in a hotel room in the US.
Next to my job, I did a masters degree in psychology and later on, PhD in management sciences where my area of expertise is leadership development.
Erik: Fantastic. Well, Mark, we’re doing this interview because you’re a speaker at the digital HR Summit in Amsterdam on the second and the third of April. And in your key note, I think you’ll talk about the demographics around robotization, which I think is an interesting and maybe complimentary trend because if people get older they’ll be replaced by robots, maybe I don’t know. What other trends are you seeing and how will these two trends impact how people work?
Mark: Yeah thank you. The two items are so far into heading onto each other. If you look at the demographics perspective, we the probably very positive side that we’re gonna stay and live a lot longer all together because of the fact of how the social systems in countries are built up, it means that we’re going to have to work a lot longer. A lot longer doesn’t mean until 70 as some people would fear, already looking at companies are moving the pensioning age, now we’re talking at 80. And these companies are absolutely not set up to deal with people working until the age of 80. On the other hand, you see indeed the automation drive where transactional or lower value-added work, people are more and more looking at can we not automate that? Can we not replace that by robots? Well then at the end, of course, also the question comes that we have a lot of people that work in those kinds of roles. What kind of work are these people going to do in the future?
Because, if we were to need to replace their work and literally and bluntly speaking send them home, who’s gonna pay for their unemployment benefits if less and less people are working? And we know good old communistic model where everybody has a basic income but I think we’ve seen over the world that that hasn’t really worked well. So, on the one hand, we see this topic coming up, and on the other hand, we see nobody thinking about how do we solve the issues that might be generated by robotization. In combination with the fact that we need to keep people a lot longer at work, not shorter. These two items are actually approved from an economic perspective that purely the replacement of people by digitization or robotization, is economically not viable. So we need to think about other solutions. So I think that we don’t do that well enough and I hope indeed that the speech I do will simply trigger people to think about the topics from a different perspective.
Erik: Yeah, so in the speech, you’ll dive of course in much, much more detail. Can you give the listener or the viewer already one potential tip on how to solve this issue, because it sounds like a very big issue?
Mark: How to solve it is a good question of course. But one of the items in these is that if you look at the people getting older, as I said one of the basic consequences is you have to work a lot longer. You have to start keeping these people integrated, and as an example, I’ll talk about the company I currently work, and we are having now in one of our sides in Bremen, Northern Germany. We’re having a trial in, “Okay, how can we actually keep the older people engaged, but also what kind of roles are available in the work?” Because we are a still factory so a lot of the day to day work they can’t do anymore because the work is too tasking for them.
So what kind of roles can these people move into? We see there we’re trying out – putting them in much more mental roles, or in helping young people in finding their basis in the organization. We don’t do that alone, we now do that along with the Chamber of Commerce in Bremen, who also see that, “Hey, this is a challenge coming up. They don’t have the tools to do everything on their own, we don’t have the tools to do everything on our own. But together we are now working on a concept on how this is possible.” We base that again, on research which a product of mine has done, indeed on the way older people learn. Because from a pragmatic perspective, we in companies, we think about the learners in our classroom are say mid thirty, mid forty. We’re not thinking about learners in a classroom who are seventy. But, people learn different. And that’s what we’re now trying out, what would work to actually keep those people engaged and effective to a higher age.
Erik: So what kind of skills do you then teach these people? ‘Cause if you’ve been working in a coal mine, one of the optimists would say “Hey, we’re going to teach them coding and they’re gonna be world class coders?” That’s gonna be tricky. What kind of skills do you teach them?
Mark: In this case for the more senior colleagues we much more go back to their softer skills, actually. We found out the more senior people, typically those are skills which have been honed over time. I speak about myself, when I was eighteen/nineteen I thought my social skills were fantastic. But I’m not sure my environment felt the same way, as you get older you get more rounded in your social skills. So indeed why don’t we make good use of them, plus for them it’s often very rewarding. On the one hand indeed to share their experience, because one of the things I do as well, is I teach at a business school and the reason why I do that is, because I think slowly, I have something to say. Not just from an academic perspective but from an experienced perspective. And those people do the same. They can relate back to their experience and share that much more than sharing the technical details. They share indeed how to work more effectively in the organization.
And you’ll find it’s extremely rewarding for them, and indeed not just to keep them engaged but also, their models I’ve experimented in other companies as well, to slowly retire them. That means for instance you go from 100%, to 80% work, to 60% work etc. and that work can slowly change. So they keep a linkage with the working population, they’re not out of it all of a sudden because we have a number of people, specifically in our company, that have huge similarities in the company, who worked forty years for an employer. And to sit home on retirement is almost a punishment for some people. Keep them now engaged, just say one two days a week. But they keep connected to the company, they have contact with other people, their minds keep busy. Those are the kinds of models we are now thinking of.
Erik: Yeah, they keep adding value and they see themselves that they keep adding value. So it’s meaningful, they do. And that’s very important. So how does this all change the role of HR, ’cause I think this turn that you’re now talking about is very recognizable and if I look for example to the story going around for truckers who will be maybe replaced for a big percentage in ten years. Chain operators which might be replaced or ultimated within five years. In the Netherlands for example, it’s a discussion. So how do you, as an HR department, how do you cope with those kinds of tremendous strategic changes?
Mark: Well I think one of the roles that HR has and HR should also take because that is of course a different discussion, is indeed that we have to make the business aware that these changes are coming because logically the business people are focused on, so to speak, what they are paid for. Running the business now and looking in strategic how the business environment might change but it is our job to put also the people topic on the agenda. And if we are saying “Hey ladies and gentlemen we see that on the demographic front you are missing out on a topic and this might be a risk or an opportunity for your organization in the longer run, that is a topic that we should bring forward. And not just by saying hey we think that. No, just bring data to the table everybody understands data and that we’re slowly getting more and more data available of not the solution as you were referring to but at least that there is really a chance coming on the horizon that we just can’t keep ignoring.
I think it is very important for HR to bring the topic to the table and support the discussion based by knowledge that is based on data.
Erik: Yeah, very interesting. Now I want to take a step back because we’re basically talking about automation and robotization is the, I wouldn’t say threat or big opportunity on the long term horizon. A lot of organizations before they start worrying about robotization are still very much worrying about digitization, how do I get my workforce digital, how do I digitize most of my HR processes, most of my business processes. So what I am interested in is to take this step back and how do you see the digitization impacting how employees are managed on a very practical scale within ArcellorMittal?
Mark: Digitization at the end of course, as you say is linkage of people and processes – and for instance machines for the common use of data or the accessibility of data. One of the beautiful challenges we are having of course since the year now is this GDPR, the data protection regularities which appear to be in a different direction there were digital is going towards.
But actually, from my perspective, there is a huge opportunity. Digital HR, I don’t see as a threat, what digital would allow us is by through the use of big data is that we can actually much better than we did in the past, find out how we can create a more effective working environment. In the past we did it traditionally every two years or something, we did an engagement survey by just asking questions, trying to figure out how people are happy. But if you use actually big data you can much better look into what really drives effective working and what creates a better working environment and get the feedback through the data in OK.
If people, if you create the working environment that makes people more effective, most likely they are happier in their role because people want to be meaningful, want to add value to an organization and I really think digital would enable us to do that and spend less time on the number of transactional activities or administrative activities that now still need to be done
Erik: Can you maybe give an example of, because you’re head of HR, a process that used to be non digital, that is now digital and how that changed how people are interacting with that process.
Mark: One of the things we are now looking into is the whole topic of recruitment and selection. The first step in the recruitment and selection is the so called sourcing which is “where do I find people?” Now we’re going to do that, we’re working in our case with an outsource company as we don’t see it as our core business. With an outsource company where we are looking at finding future talents before we have vacancies, before we have anything on the market that they might be interested in. So trying to find where these people are and trying to remain in touch with them and we remain in touch with them by trying to find out what are these people interested in.
As an example they might either work somewhere else or they might still study so how can we make them interested in a company like ours. Which is a full business to business company. They will never see a product of ours just driving around the streets – although 60% of cars have ArcelorMittal steel in them, but okay – just based on the outside, they don’t know us at all. What would drive them? And for that there is a lot of data available that helps you to touch base already on these people without them knowing so to speak that in the long run we are interested to see if these are the talents we need for the future.
Now if you then look at the whole process that people go on the web, you know yourself, that the first CV’s you submit to the web are currently checked by tools that look for key words. That is a trend which we are already having.
On the other hand, you see there is a real weakness in these systems, interesting enough, the challenges you see if you are applying on the internet that you get these nice companies that address for you that they will re-write your CV so the key words are in your CV. The effect of that means that the tool doesn’t work otherwise you wouldn’t be able to fix it that easy. But those are of course things where you now see tools that go into social network sand there look for people who support certain behaviors etc. I think in the whole sourcing and the recruitment topic, a lot is going to be digitized there. The first robots are there in there to do, not the selection interviews themselves, but indeed interpret facial behaviors, to see how people are reacting. It’s still relatively in its infancy but its gonna come of course.
And I don’t think it’ll come fast as a decision tool but as a decision support tool. You don’t base your decision only on that, it is a second area of information that you say “hey, I have this feeling about the employee” this is what the tool says, do the align? Then most likely we are right, if they don’t align, this is something interesting to look at. And I think if we are looking at them that way our decisions will simply get better and I think there is nothing negative about our decision being good because if you find the right employee and hence the employee of the future, find the right job, that is an upside for both sides.
Erik: Very interesting and a fantastic example, thanks for that. So we are now basically talking about digital HR and digital HR is one of the things that a lot of people are talking about in the markets page, if you had to, because you are an academic at heart and that’s something I really like. If you would be to conceptualize, if you would have to define digital HR what does it mean? What is digital HR to you?
Mark: Digital HR, that is a good question, I mean in principal it means indeed that digital HR for me is the process that supports at the end HR Business Partners. These are the people that work together with the business and make on the one hand the business successful and also trigger the business to look into the right direction when it comes to people perspective.
At the moment, a large amount of time of the business partners is still spent in supporting the business with all kinds of relatively speaking, low added value tasks. Digital HR will take that area away, will manage the standard processes, perhaps you can focus on the exceptions, because exceptions remain needed and normal people are the same and you focus on better being able to help the business drive forward. And losing less time on areas that don’t really matter that much in the long run, the so called hygiene factors.
Erik: So a lot of the, if I summarized correctly, a lot of the more administrative mundane tasks will be automated, they will be gone. The HR business partner or indeed the HR administrator will be more focused on the exceptions, the flags that pop up in the system. This might be something wrong, we need a human to check this and then because everything is automated to a high degree, there is more data we can make more data driven decisions and the HR business partner will have a slightly more tactical or even strategic role in making better decisions, supported by data.
Mark: Yup and a very simple example of this was a trend which almost 20 years ago, when we were talking about cafeteria systems for benefits. Why did cafeteria systems for benefits, in principal you have a budget of your availability and you can choose what you wanted to do with that. You can pay more pension or you can say no I want holidays extra, no I want the car wash at work.
Most of the companies who implemented it found that 90% of the people didn’t use it and why did a lot of company not implement it because it was far too administrative cumbersome. Of course if you are looking at digital HR and you have a system that manages this, it is relatively speaking, easy because it needs almost no human intervention. You simply have a tool and you can (play) in that tool and the consequence comes with the employee.
Why do I as head of HR need to know about that, what an individual chooses, they have the budget and the system is arranged so it is a self-runner. It could add value to the person, making switches very easy, versus no administrative log to HR at all.
Erik: Very interesting. It is like a mass customization for the employee, they can all take their own personalized package, the one they are most happy with.
Mark: When you buy a car, where do you first see your car, you see it on the tool of the car branch where you build it yourself, why can’t we do that with certain packages. They say, you know what I want to try out to do a little more holiday, I think I can do with a little bit less salary. Why can’t I try this and then it is our task indeed as HR to say, “you know what, Dear Erik, until the age for instance the age of 30, you can touch your benefit which is pension but beyond that you can’t, because I need to protect you” so that at the end of your career you have a pension, but that’s not up to us.
Erik: Yeah, not actually at 67, but at 80 at that time if I heard you correctly. That is an excellent example by the way. What I am very interested in is you specialized that your PhD on the area of leadership development, how do you see digital HR enable the field of leadership development?
Mark: This is a question that I get indeed more often, this area, you have the academic differentiation between leadership and management. Where leadership is managing the people and management is managing the tools that manage people.
So management perspective you see a large impact of digital of course because the tools available, the data available will change, will become much better but therefore also the impact of your decisions will be on the one hand bigger and on.
Erik: Your sound just cut out. You’re back. You said, the impact becomes bigger and then we lost you.
Mark: The impact becomes bigger of your decisions but you also see the effect of your decisions come back quicker. Because you have access to the data behind it which in the past we didn’t.
From a leadership perspective if we are talking about touching people, really what changes there, that is a very good question. One of the things I describe, I wrote a book on leadership development, I start actually off in the first example of leadership development meaning building of the pyramids in Egypt a few thousand years ago where I proved that there was already a matrix structure in place there, there was already leadership there. So what really did change although the world around us changed, we are still changing behavior of people in order to pursue the target we find important. So in my view the area of leadership will focus potentially even more on the person and behind the employee so to speak, because all the other processes will slowly slowly be managed or at least taken care of by robotized systems so people will go for there leader, much more for the human interaction element of the job.
So the emphasis on leadership will be no less in a digitized environment.
Erik: So organization as a sort of pyramid structure where you have a leader and a number of people who work towards the same goal. Or a number of leaders if you take a more modern approach where everyone is a leader. You still keep that structure that might even become more important instead of less important.
Mark: Yeah the structure the difference will be indeed that as you now say, as traditionally we have the pyramid structure and in those system enabled environments there are a lot more possibilities for an organization, why does one boss have to have three people working for them, you will have virtual teams. There are all kinds of possibilities which are enabled by the tools that are there. So if we are going to ask more from leaders on the one had they need to reach out to their people and keep this human interaction and on the other hand the elements like trust become much more important.
So people will not sit in the same office as you, probably not in the same country as you. And you will be virtually connected to them, nevertheless you have to be confident, you have to be trustworthy, that if you come to an agreement and then you don’t see that individual for another week that that person is going to work on it and if there are challenges then they come back to you.
Erik: Also, of course those challenges of how do you work together, how do you lead with a fully digital team, which requires different skillsets that having a team in the office present because you can interact in a different way.
Mark: Another question of how do you create an ‘us’ how do you create a team feeling, if the team is almost never together.
Erik: As a final question Mark, a question that I would love to ask you is, we were talking about robotization about digitization so jobs are going to disappear, but instead of those jobs new jobs will appear. Which jobs in HR, I know this is a difficult question to ask to you, which jobs do you think in HR will disappear in the next say 5 years and which new jobs might be created?
Mark: I think in HR indeed the traditional transactional roles, HR administrator roles, those roles will disappear, will be replaced not necessarily all by indeed a human machine interaction or an interface but a number of them were as well but still you need to have a human person to go to. Will they be replaced? That is at the end the question of course.
The total amount of jobs will reduce somewhat, that is true, but what of course is very much true is and there are a lot of studies done in that field is that the roles will change but they won’t really disappear, for all the jobs that are disappearing at the moment, new jobs are gonna come into place. I think our real challenge is how do we make the people who did the transactional job this far, how do we get them into new jobs in the new digitized environment.
We shouldn’t also sometimes kid ourselves, the majority of the people we’re talking about does not have an academic degree. 15-20% of people in Europe have an academic degree which is already a scary amount but OK. Whereas if we’re talking about modern employee roles we are talking about people who work from home, that can do things, etc. but if I am looking at the environment I work in, the majority of the people who work in industry are machine based. Sorry have a role that is machine based, or machine linked, they cannot work remotely.
But these are all interesting concepts but for them it won’t touch them. So these roles if we start automating, some of these roles will disappear and we need to find out on the one hand what other roles these people can do and one of the demographic trends we didn’t touch on is the reduced birth rate in Europe so in the long run, we see less people entering the labor market.
So in so far, certain roles disappear doesn’t have to be a threat, because it could initially just pick up on the reduced intake in the marker. So I think overall it is just an extremely interesting time, what is going to happen and I have no doubt in a number of my assumptions I am totally wrong which is fine.
I think it is most important to think about it so that at least you are in your mind prepared for what is happening instead of being surprised by what is going to take place in the future.
Erik: I couldn’t agree more and while you were talking I thought about five or ten new different questions that I could ask to follow up but we’re running out of time. I would love to ask those questions maybe another time Mark, but for now, thank you very very much for a very interesting talk and I hope to see you at the digital HR summit in Amsterdam on April 2 and April 3rd. Thank you very much.
Mark: Thank you.