Ekaterina Kovalevskaya, Head of the Supervisory Board of HRForum Association, on the eve of the next Digital HR Ukraine 2018 conference (to be held on September 20 – Ed.) talked to Leadership Journey about the main trends in HR and the future of this profession. She is confident that a professional HR department is not a luxury, but a necessary condition for a successful business in the modern world, including in Ukraine.

Leadership Journey (LJ): Ekaterina, tell us about the new trends in the HR community. What do you and your colleagues pay special attention to? For example, I know that the millennial generation is breaking down many established standards of personnel management. Anything else?

Ekaterina Kovalevskaya (EK): There are several trends that the whole world is now living with, and these trends affect Ukraine. First, this is the digitalization of HR. Automation of business processes has already reached the management of people. By means of Artificial Intelligence and Big Data technologies, everything that can be automated will soon be automated. Although, there is still a question of what form it will take. The Web Summit in Lisbon, in November 2017, with 60,000 participants, even a received a message from Hawking (Stephen Hawking, the famous physicist. – Ed.). He was saying that the use of these technologies is a huge challenge for the whole world, which will not be so easy to cope with.

SOON EVERYTHING THAT COULD BE AUTOMATED WILL BE AUTOMATED

In the HR sphere, in my view, there is an understanding of how to use Big Data. For example, now based on information about the behavioral reactions of people, HR specialists can predict the possible dismissal of an employee.

The tools developed, by the way, in Ukraine, allow concluding with high probability that a person will quit, even if he himself is not aware of it yet.

Large-scale migration processes are the second trend. This is the outflow of people to Europe, and business needs to cope somehow with this. In Ukraine, migration is now felt rather acutely. Including the internal migration. Digitalization could be one of the tools to respond to this trend. Training and development, and consequent retention of the available personnel could be another response.

You were right to have mentioned the millennials. It is necessary to understand that now the expectations of workers are changing: human qualities come to the fore – intuition, empathy, and creativity. How has the situation changed with the appearance of the millennials? They are not interested in the company as it is; but in its empathic component: what the company is doing for the community, whether the business brings benefits to society, whether it is environment-friendly. This attitude to the companies by potential employees changes the tasks the HR professionals have to work on.

HUMAN QUALITIES COME TO THE FORE – INTUITION, EMPATHY, AND CREATIVITY.

LJ: Do these trends lead to a change in the strategies of the business itself? Will there be more attention paid to such aspects as, for example, corporate social responsibility (CSR)?

EK: Indeed, CSR attracts a lot of attention. This year there was a boom in the Ukrainian HR: an employer brand building, an employer brand development. This is done to attract the best specialists to a company. By 2023, the share of millennials among workers will reach 50%, and they are interested in a business that not only focuses on results but also pays attention to the process of operations.

This year there was a boom in the Ukrainian HR: an employer brand building, an employer brand development

That is why, for example, there are baby changing rooms or feeding rooms in Microsoft offices. You can safely take your child with you to work – these are different values. The relationship between the employee and the business is changing, as well as the methods of work and interaction within a company.

For example, one of our partners, a large international company, is implementing a system that will allow employees to plan their work schedules themselves: you press two buttons on your phone and note your desired vacation dates or the time you work from home. In the same program, you can see the accrual of bonuses. This is a completely different level of interaction. Thus, many HR-functions fall on the direct manager.

MANY HR-FUNCTIONS FALL ON THE DIRECT MANAGER.

LJ: As I understand it, the HR functions will change too, right?

EK: Of course. Now HR is moving towards a business partnership. An HR specialist is no longer just a person who is searching for employees. This specialist understands the specifics of a company’s business and understands business processes.

Many HR departments are transformed into a kind of centers of expertise, where a special content for management is created. Thus, the HR functions are partially transferred to the managers; however this in no way diminishing the value of HR specialist.

LJ: Some experts believe that now in Ukraine there is a huge shortage of managers. They say that you can only get a high-class top manager only by “hunting”. No other option.

EK: We live in an age of struggle for talent. In business, there is only one serious limitation – people. As for the rest – ideas, business processes, access to money and information –, there is no shortage. The problem is to find people who will transform all these resources into a finished successful product. The situation is true not only for Ukraine but they also talk about this at the largest HR conferences all over the world.

A TOP MANAGER IS A PERSON TO INITIATE CHANGE AND TAKE THE RESPONSIBILITY

Why are we keeping a close eye on Google and Facebook? These companies serve as an example of how to find and retain talents because talent drives business. In Ukraine, in this regard, things look no so good. First, the consequences of the Soviet mentality are still felt, when people were not taught to make decisions. However, any top manager is a person who initiates change and takes responsibility. In the domestic business, top managers are over the age of 35, which means that such a person lived in the USSR, which inevitably affected the mindset and the ability to make independent decisions.

If a person lived in the USSR, this inevitably affected the mindset and the ability to make independent decisions

Secondly, we are reaping the fruits of the gaps in the previous past education. In the mid-1990s, there was a massive outflow of teachers and professors: they went to work in the marketplaces, in business, because it was impossible to survive (on the salary) otherwise. However, even now the level of salaries of schoolteachers and higher educational institutions lectures can only be called odious (very low). This inevitably affects the level of education, which consequences we will face very soon.

On the other hand, now nothing hinders those who really want to achieve something. Online training, including free, is available to everyone: you turn on the computer — and in five minutes you get to a Harvard course. Just these talents will germinate and flourish in Ukraine.

LJ: What other trends are changing the established working relationship paradigm? What new motivation systems do companies introduce to retain valuable employees?

EK: People are increasingly going to freelance. This allows them to work on several projects for different companies. In the US, in the next 10 years, more than 50% of company employees are expected to work on freelancing. This is a project based and remote work, which you can do anywhere. A freelancer is kind of an entrepreneur: he regulates the amount of work and the level of his own income.

Companies are also looking for ways to give more freedom and delegate more authority to the employees. This is important in Ukraine with its low wages and the outflow of the working population to Europe. To have people stay in Ukraine, there should be opportunities to engage them in interesting projects and in a comfortable mode, including from home – so that work was seamlessly woven into life.

To have people stay in Ukraine, there should be opportunities to engage them in interesting projects, and in a comfortable mode

An increase in salaries is another upcoming trend. People are not trees, they can get up and go to another job, to another country, change the type of activity. And employers are beginning to realize this. Employees are constantly migrating from company to company in search of interesting projects, higher pay, and comfortable working conditions.

LJ: Do you agree that servant leadership is coming to replace the autocratic style in success models? Will there be such companies’ leaders to serve their employees more? Or some other management models?

EK: I would not call it service; this word has a heavy semantic load. An inspiring leadership probably would be more correct. A leader, who takes care, inspires, yes, of course. Earlier we talked about the millennials. They have a different degree of responsibility and a different sense of freedom. They measure work by projects; they do not work in one company through their lifetime. You cannot supervise such employees by just stamping your foot. The crown must be removed, and put somewhere in a drawer.

YOU CAN NO MORE SUPERVISE EMPLOYEES BY JUST STAMPING YOUR FOOT.

LJ: Does it relate to the emergence of a new generation with open access to knowledge?

EK: I think that all together influences. Access to information is certainly one of the key points. In addition, a larger openness and transparency of many processes play a role. Earlier, if someone shouted, behaved poorly, you could tell a maximum of 10 people about this. Now you will tell it on Facebook, and fifteen thousand people will find out about this in 10 minutes. Accordingly, an employer will no longer fool around. It is difficult to afford such misconduct.

All this together leads precisely to a change in values. In addition to artificial intelligence, which will largely change the situation in the world, we now have serious climate problems. More precisely – very serious. The whole world has crazy climate problems. The speed of information transfer; the way that we quickly feel any world problem, demonstrates we all connect with each other.

When there is a threat of survival, you need to do something that will improve the situation and affect it. It is like standing on the edge. In my view, humanity is on the verge of some serious alterations. Maybe, that is why the leadership paradigm is changing.

Young millionaires in T-shirts and shorts are the new heroes. Guys who talk calmly; drink coffee from a paper cup.

YOUNG MILLIONAIRES IN T-SHIRTS AND SHORTS ARE THE NEW HEROES

LJ: There is a lack of trust in the Ukrainian business. And not only between the companies, but also inside. In other words, the owners manage the companies and do not let the professionals in the process. At the same time, the owners are for the most part a post-Soviet product with no in-depth knowledge of marketing and management. As a result, the efficiency of business processes suffers. How should you fix it?

EK: First, many of today’s large companies were created in manual mode, as they say, on the knees – without any special knowledge, at the level of intuition. Plus, the consequences of the Soviet mentality. Just 10 years ago, a self-withdrawal of an owner from business management meant the death of the company, and this fear persists.

Secondly, hired managers are not as professional as we would like. The domestic business environment is very young; and a low competence is a downside. In short, the distrust of companies’ owners has its rational.

Domestic business environment is very young; a low competence is a downside

Thirdly, in Ukraine, there is the problem of protecting private property, and there is no culture of continuity, the transfer of business from generation to generation. Therefore, large Ukrainian companies can have significant help from supervisory boards and invited managers with international experience that will help to avoid serious mistakes.

I can only welcome the appearance of HR specialists in such supervisory boards, since they supervise, among other things, the appointment of top managers. Otherwise, the supervisory board will be not sufficiently effective.

LJ: There is a view that many domestic business schools weaken control over the quality of education for the sake of survival. Do the Ukrainian HRs have some sort of top managers selection filters adjusted for training in Ukraine?

EK: In Ukraine, several business schools are on the right path. They develop and raise the level of education. Of course, some school applicants follow the stereotype that has existed since the times of the USSR. They think you can “breakthrough” with other people’s knowledge. In other words, they cheat off in class. I wonder if something has changed now in schools. This is a huge problem, which leads to subsequent incompetence of staff at all levels.

Money is the second issue. Our people are very hard to invest in their own education. This situation should change; people should have a clear understanding of the need for lifelong learning. The knowledge gained 10 years ago has no value today; the world is changing so quickly. To be successful and in demand, you need to constantly learn. And this is the responsibility of the person himself.

OUR PEOPLE ARE VERY HARD TO INVEST IN THEIR OWN EDUCATION

I have three higher education diplomas: classical psychology (and postgraduate studies), then management, then an MBA. After the MBA, I thought, “Enough, I am so tired of learning”. Two years later, I have started my HR education. It is vital to invest part of the money earned in ourselves. This should become a part of our culture.

LJ: What do you think about ageism? Is there a problem in Ukraine, when a certain age limit becomes a prerequisite for recruitment?

EK: Ageism in Ukraine is very pronounced. Five years ago, at a large international conference, a huge number of participants aged 50–60 years struck me. With us (in Ukraine), if you are 45 years old, then you either have to be a big boss or its time for you to change your job.

It seems to me that in our society, ageism is a way to weed out people with Soviet stereotypes in relation to work when there is no need to take responsibility and is customary to avoid initiative. However, in the end, this led to a completely inadequate expectation of new competencies from the younger generation.

LJ: According to research, with the advent of the so-called Industry 4.0, many people will lose their jobs. Only those who will be able to be creative or just humane, which is beyond the power of computers and robots, will remain in the ranks.

EK: At present, they call these properties not even soft skills; there is already a new concept – behavioral skills. This is about how we interact, behave in society, (communicate) with people and teams.

Today they say a lot about the fact, that not an individual is winning, but a team. Only with a strong team, you can achieve your goal. People should have the skills to communicate, interact, and present ideas. I really love it that, on the one hand, we are escaping in our gadgets and the network, and on the other, the Web Summit, for instance, has grown from 400 to 60,000 visitors in four years.

ONLY WITH A STRONG TEAM, IT IS POSSIBLE TO REACH THE SET GOAL

We are constantly in touch with each other virtually online, and on the other hand, people still want to communicate live. That is why the number of different events and conferences is growing.

LJ: Is this a reaction to sudden existential loneliness?

EK: On the one hand, this is a kind of compensation. On the other — according to some research, we can communicate perfectly even without verbal manifestations. Even in this case, information transfers from one person to another. For example, you get on a full bus in the evening and feel more tired after the trip, even if you did not quarrel with the conductor and no one stepped on your foot. This is the influence of the general emotional atmosphere. Moreover, there are people in whose company you relax psychologically. These are, let us say, soft features. Future brain research — the way it forms this reality around us, the way it influences us — will allow learning more about these phenomena.

LJ: This is very interesting. For example, Nokia has again released a button phone – is it really a reverse round of scientific and technological progress?

EK: This is nothing more than adjusting the path, the search for an optimal way of life, communication in society. This figure: an increase in number from 400 to 60,000 visitors of the Web Summit in four years did impress me! This is an opportunity to communicate directly with smart people and professionals.

LJ: How do you form the agenda of your association HRForum.ua? The agenda of previous conferences, for example, included issues of corporate culture, digital issues. This time, what will the conversation be about?

Е.К.: Our association unites HR-specialists of different areas and levels. There are honorary members — these are HR-directors with an extensive experience who help large companies to build HR-strategies. The expert council meets in December on an annual basis. This is a private meeting to discuss the tasks and challenges we face, and the situation in the HR sphere.

Our HRForum.ua association, in its turn, is a partner of the global HR community “Society for Human Resource Management (SHRM.ORG)”. Now, this is a global organization. We have many partners from all over the world – Europe, Pakistan, India, South America, and the Middle East. Once a year we meet to analyze current trends.

WE HAVE MANY PARTNERS FROM ALL OVER THE WORLD – EUROPE, PAKISTAN, INDIA, SOUTH AMERICA, AND THE MIDDLE EAST.

It is very important for us to show the vector of development. People often tell me: our company does not go for digitalization right now, the budget does not allow us, and this is not in our strategy. However, in any case, this will have to be done — if not in a year, then in two years. Now it is necessary to understand what difficulties may arise, what issues should be taken into account, where to look for and find answers to the questions. Even if now a business confronts other issues, it is necessary to learn the digital strategy and understand its essence and purpose. Because automation is very serious change management, which significantly alters all business processes. Our Digital HR Ukraine conference (http://hrdigital.solutions) is an opportunity for the Ukrainian business to see, what is it that awaits for it tomorrow, and which way to go.

LJ: What are the most vivid local HR trends in different countries? What happens in the USA, Europe, and Asia?

EK: Diversity and inclusion come to the fore. There is a fight against ageism. We have no serious problems with diversity and inclusion, because our society is still homogeneous.

Now people start to work even before entering the university and continue to work almost until old age. As a result, we have a situation where people at the age of 18 and 65 can be involved in a company in one field. This is a very big difference. These are people with a very different worldview and need to be able to somehow get along, understand each other and take into account mutual interests.

Female leadership is another issue. Women tend to be more active in life, even if they are not feminists. Women show surprisingly good results. A female approach to work being more scrupulous, fulfilling diverse tasks at the same time, easily fits into the model of inspiring and supportive leadership. Owing to the relief of the household work (thanks to dishwashers and washing machines), women have additional time for learning and self-development.

WOMEN SHOW SURPRISINGLY GOOD RESULTS

LJ: What should a business do to keep up with the world trends?

EK: It would be desirable that the CEOs not only paid attention to the financial side of the business but also saw the value of HR specialists. Top managers need to attend events such as our conference: this would give them an idea and understanding of how to work with the personnel the right way. And this is the trend that we see in business: HR specialists are rising to the level of CEO.

HR SPECIALISTS ARE RISING TO THE LEVEL OF CEO

In this sense, the example of American Airlines United Airlines, one of the world’s largest carriers, is very indicative. At a recent, the world’s largest HR conference in Chicago, CEO of United Airlines said, “I work with my top team and we make decisions with my top team. I don’t work separately with the HR manager on HR issues, I don’t work separately with the finance manager on finance; we solve these issues together with my top managers’ team. These people are in the top management team.”

Here we turn again to the issue of trust between CEOs and managers. Invest in management! Train them! Send them to conferences, internships! To have milk, you need to feed and tend a cow, and not just milk it.

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