Smart HR 4.0: Disruptions to HR by industry 4.0

Smart HR 4.0: Disruptions to HR by industry 4.0
Last Updated: December 29, 2022

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“We are at the beginning of a revolution that is fundamentally changing the way we live, work and relate to one another. There has never been a time of greater promise or greater peril” Professor Klaus Schwab (2018). It’s fascinating how the industry has evolved: from the first industrial revolution in the late 18th century to the third one starting in the mid-20th century, powered by new information technology and automation. Currently, we are now in fourth industrial revolution (Industry 4.0), an era of artificial intelligence (AI) and the Internet of Things (IoT). Digitisation is advancing at such a swift pace that organisations must be prepared for the various changes that technology poses. The human resources field is no exception and because of this human-resource professionals have an important role to play as they assist organisations in the new world of the fourth industrial revolution.

Before delving into smart hr 4.0 it is important that explain what industry 4.0 is all about. Industry 4.0 refers to a new era in the industrial revolution that focuses immensely on interconnectivity, automation, machine learning, and real-time data. Industry 4.0, combines variables and processes such as internet of things (IoT) or smart manufacturing, combining physical production and operations with artificial intelligence (smart digital technology, machine learning, and big data) to create a more holistic and better-connected ecosystem for companies that specialize in manufacturing and supply chain management. In as much organisations operate differently, they all face a common challenge which is the need for connectedness and access to real-time insights across processes, products, people, and partners. This is where industry 4.0 comes into play. Therefore, industry 4.0 is not just about investing in new technology and tools to improve manufacturing efficiency—it is also about revolutionizing the way your entire organisation or company operates and grows.

At the same time, industry 4.0 comes with a major challenge. In a detailed study by the WEF called “The Future of Jobs 2016”, covering 15 economies accounting for about 1.86 billion workers, or about 65 per cent of the world’s workforce, a total of 7.1 million jobs will be lost between 2015 and 2020 along with a gain of 2 million jobs in new fields requiring new skills.

Thus in industry 4.0, organisations will require more “knowledge workers” and fewer skilled and unskilled workers. The knowledge worker will be the ones who will drive innovation and creativity. They make it possible to have the word smart as a prefix to almost anything. Smart farmers, smart small and medium-sized enterprises, smart medical care, smart buildings and even smart electricity grids, to name just but a few.  It becomes important that HR professionals assist organisations in creating “knowledge workers” or smart talents.

Previously, HR focused on personnel functions. With the advent of industry 4.0 HR people cannot depend only on the traditional approach. They have to transform and embrace smart HR 4.0. This transition to smart HR4.0 means the following for HR professionals.

Firstly, HR professionals must be able to identify the skills needed for the industry in which their organisation is operating. HR professionals must identify what skill sets the workforce and company they work for is currently lacking. Secondly, HR must become more digitally focused. In order to keep ahead of competitors, who are almost certainly making similar changes, HR professionals need to keep up with technological trends as well this includes adopting automated services such as balanced scorecards, HR toolkits, online driver fitness testing, and PayGenius. These are services offered by leading HR practitioners such as Industrial Psychology Consultants.

In an industry 4.0 benchmarking exercise by D Gates (2007) they had expert interviews with leading manufacturers whereby they asked them about their capability, talent and HR strategies in relation to industry 4.0. It was found out that top management understood the significance of industry 4.0 but few believed that their individual employees fully understood how their contributions helped drive the success of the organization. Thus better communication, education, and training will be needed in such instances and it is the role of HR to do so.  Another study found out that organization would require a successful smart HR 4.0 strategy to cope up with the challenges of Industry 4.0 transformation (Sivathanu & Pillai, 2018). Developing technologies such as Internet-of-Things, Big Data, and artificial intelligence will automate most of the HR processes, resulting in efficient and leaner HR teams. It was also seen that for efficient Smart HR 4.0 implementation both organization structure and leadership style changes would be required so as to allow HR departments to play a more strategic role in the overall growth of organisations.

In conclusion, the key to succeeding today for most organisations lies in its people. Organisations will never be able to control the changes in the world but what they can control is how they can lead their people to stay ahead of these changes. Smart HR 4.0 adoption seems likely the best bet for most organisations if they want to stay ahead of competition.


Milton Jack is a Business Consultant at Industrial Psychology Consultants (Pvt) Ltd, a business management and human resources consulting firm.


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Milton Jack
This article was written by Milton a Consultant at Industrial Psychology Consultants (Pvt) Ltd

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