Robot Capital Management Vs. Human Capital Management

HCM is to RCM what HR is to accounting

Anyone who went into HCM to empower people should welcome robots as competition for humans in the workplace. It’s the swift kick this profession needs, frankly, to leave the antiseptic idea of capital management behind and help humans develop themselves for the jobs robots won’t be able to do anytime soon, if ever. 

The phrase “human capital management,” or HCM, has a strangely inhuman ring to it. Many HR professionals secretly cringe at the term. They got into the field to help people, not “human capital,” and aside from the word itself, nothing else about human capital management sounds human.

But replace the H in HCM with an R for “robot,” and the term is suddenly apt. RCM is in no way like HCM, and the R is a better fit for the C and M that follow–today’s robots are forms of business capital to manage, after all. 

Gartner defines HCM as “a set of practices related to people resource management.” Oracle says, “HCM can refer both to a business strategy and a set of modern IT applications and other technologies that are used to implement that strategy.” HCM is, indeed, a tapestry of best-practices and technologies concerned with organizations employing people in the most effective way to mutual benefit. Functionally, there’s core HR and the basics (e.g., payroll, time and attendance, etc.), talent acquisition, and, finally, the aspects of HCM that seem most human: talent management and on-the-job learning. 
 

But what is Robot Capital Management, or RCM? It’s nothing like HCM.

For RCM, your payroll and performance management are the price to purchase and maintain your robots. Your succession planning is the price to purchase and maintain replacement robots. Your benefits administration, payroll, time and attendance, and… well, there is no cost associated with any of this when you employ robots—at least not yet.

In other words, you don’t employ robots; you deploy them. The only costs are those associated with purchase, integration, and maintenance. Tracking and accounting for robots is straightforward. And there’s that word: accounting. When businesses decide to replace humans with robots, leadership is listening to accounting rather than to HR professionals concerned with investments in human beings.

These aren’t the robots we’ve all come to know on the manufacturer’s factory floor. They are not designed to replace manual labor as much as they are some form of intellectual labor. In some cases, they may be untethered “droids” capable of doing many different jobs. In other cases, they may be unembodied artificial intelligences (AI) that are little more than algorithmic abstractions.

But the real question is whether these AIs/robots are really going to take away all the jobs and eventually eliminate the workplace altogether. Far-out technology such as quantum computing, still new, may yet show us that robots are capable of taking away all or most of the jobs humans would ever do. But that is pure conjecture, and in the short term it is likely that a vast swath of professions and the jobs in them are safe from the robot takeover. Why?

Consider which skills the World Economic Forum “2022 Skills Outlook” expects to see in major decline versus demand in the near future. Among those in decline are perennial staples such as “reading, writing, math and active listening” and “visual, auditory and speech abilities.” Yeesh. At first blush, that seems incredibly worrisome. But look: Things such as “analytical thinking and innovation,” “complex problem-solving” and “emotional intelligence” will increase in demand. That’s a relief.

The common denominator for declining jobs is that robots are becoming intelligent enough to do increasingly complex activities. Contrast this with the jobs that will be in demand, however. Most call for uniquely human capabilities all resting upon our ability to ponder and imagine. This means creativity, leadership, originality, and innovation—the kind of actual thinking that is valuable to business and results in progress.

“The 2019 State of Artificial Intelligence, Disruption and Innovation,” a report by HR.com and the HR Research Institute, underscores the validity of this school of thought—i.e., that AI is not an instrument yet for innovation and other human-type thinking of a similar caliber. Responses from the survey of nearly 300 professionals at companies across many industries find that, “Where AI is used, it is primarily to automate existing processes and tasks: in other words, doing what was done before perhaps faster or more efficiently, rather than as a tool for reinvention, innovation or industry disruption.”

So, uniquely human jobs are safe, and probably for a while. In the meantime, however, why do humans seem unable to resist the temptation to replace humans in the workplace with robots wherever they can? Here’s why: The move does away not only with those unpredictable humans, but, potentially, with the workplace altogether—that pesky, unruly place that requires much effort and thought to manage.

This happens partly as a blind pursuit of efficiency, which is nothing unexpected. The decision to deploy robots in place of employing people is an accounting one, remember. Apologies in advance to all the accountants reading this, but accounting goes low—as in, it tends to pursue the lowest-cost workable option in all things. The thing is, that’s a legitimate objective, and we must acknowledge the related reality: Some jobs just don’t have a future involving humans in a future involving increasingly sophisticated, cheaper robots. It’s the near future. 

With a contraction in the availability of these basic jobs will come a commensurate decrease in the need for HCM to manage the basics of employment. That’s because basics such as payroll, benefits administration and the like will be unnecessary for robots as they take many of these straightforward jobs. That’s part of it—fewer humans needing their pay and benefits managed. Plus, human HCM professionals’ involvement in this basic work is giving way anyway to pervasive automation—ahem, manual robots. The work and ways in which they are paid will increase in complexity for all those displaced humans as they enter into roles outside AI’s proficiency, meaning the basics of employing these people will become not so basic anymore. Look at the sophisticated job performance–tied compensation packages of your six figures–earning employees at the director level and higher. Compare these to those of your hourly paid employees. For the former, compensation planning and complex performance management are likelier factors. These are the domain of humans, of leaders.

So, HCM must go high. And that happens to be the strategy, wherever possible, to defend this sovereign landmass known as the workplace. What does it mean for HCM to go high? It means HCM has bigger, more consequential things to do. Chief among these is to exercise a vested interest in reskilling people. This is what will save the workplace—and maybe even HCM itself, as a profession. How? Well, these higher-level activities will be the only things left for HCM professionals to do as automation takes over the administrative tedium. But we should be OK with this loss of HCM’s lower-level focus, a welcome development. For employees, it’s the demise of drudgery. For HCM, it’s the demise of being associated with this drudgery, the origins of HR’s moniker as a cost center to be contained in the first place.

By owning and leading well-calibrated learning and related programs, HCM can become instrumental in helping organizations become adept at continually developing their people. To remain steps ahead of the robots, the frequency of development must be intense. The goal is for any employee at any time about to be displaced by a robot to be prepared already to move to a new role where a robot just won’t fit the bill. For many companies, massive culture change will be in order—the must-do hard work of organizational transformation to embrace a culture of continuous learning.

Bereft of a sense of urgency here, organizations will find themselves descending irretrievably into an accounting-centric people policy, ditching people in favor of robots wherever feasible. It sounds preposterous at first blush, but math says the circumstances would leave HCM with less and less human capital to manage and the executive suite with less and less incentive to care about the humans that remain or whether any humans eventually remain at all. What kind of company is that? A rapid cultural shift is in order if businesses stand a chance long-term of retaining no less than their humanness.

Besides, in fighting for what’s right, right now, HCM can redeem itself and realize its original, higher calling—to be human. Perhaps that means disavowing the acronym in favor of something else. How does People Potential Management (PPM) work? PPM can rescue organizations from cost-cutting themselves to a grinding halt from which there aren’t enough humans left to do the uniquely human thinking to innovate a still-human company forward. Thankfully, it is HCM’s destiny to self-actualize into PPM—a more specialized and higher-end discipline as robots continue to flood the zone in lower-level jobs whose traditional need for HCM seldom stretches beyond a limited vision for HCM in the first place.

It is human passion that has advanced the cause of employees as human beings, and as not mere entries on the general ledger. And this battle between HCM’s higher aspirations and the bottom line is not new; it’s just that the imminent availability of AI to do many of the jobs people always have done underscores that the struggle is real and perennial. Unquestionably, a chunk of the old workplace that has been with us for millennia will go away—forever ceded to robots and subject to the dollars and cents of RCM. For that alone, HCM needs to get out in front. The caliber of human employee must continue to rise for humans to outpace robots in the workplace. There is an urgency to do this before robots capture more ground than we need to give them. Millions of humans are looking to HCM for the opportunity to reskill themselves now so they can be ready for the new jobs robots won’t be able to do anytime soon, if ever.