Human capital can be considered as one of the critical elements of success in the modern organization. However, there have been changes in the fourth industrial revolution and researches and managers have already predicted that the characteristics of human capital are yet to change (Rüßmann et al., 2015). The fourth industrial revolution comes with several technologies such as global industrial networks, augmented reality, virtual reality, cloud computing, robotic technology, and the Internet of Things that have impacted the world (Eberhard et al., 2017). The main question that needs to be answered in the presence of these technologies is thus what are the main human capital development strategies that can be used to prepare organizations for the future of the fourth industrial revolution. This literature review attempts to analyze the challenges of human capital and development strategies that should be undertaken to prepare for the future.
The keywords related to the study include human capital development, the fourth industrial revolution, education, and skills development.
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Human capital can be defined as the set of abilities, knowledge, and skills that are applied in services, processes, and activities which are used to stimulate economic growth. These experiences, knowledge, and skills are expected to be applied to create success for the organization (Agolla, 2018). The main challenge of industry 4.0 is that it will lead to a significant decrease in the demand for low-skilled activities and an increase in the demand for high-skill activities (Bonekamp & Sure, 2015). It is also projected that there will be increased importance for the need for continuous education, training, and learning so that the workforce can be able to meet the requirements for the industry 4.0 technologies. Another challenge with industry 4.0 is that it will create a change in the management style of human capital. Mamedov et al. (2019) identify that the focus on an individual self-conscience which was the focus of the third industrial revolution has shifted towards social deprivation, closeness, and teamwork.
One of the first strategies that can be used to improve human capital is by focusing on the growth of education, knowledge, and skill. Agolla (2018) observes that there is a need to have human capital natured in education systems that are competitive and that would fit for the creative work environment. Organizations should thus emphasize gaining knowledge that could be beyond their current technologies. The knowledge developed was found to have learning outcomes that focus on cognitive skills, expertise, and creative thinking. Shahroom and Hussin (2018) also emphasize the need for creative approaches to make use of educational innovation and upgrade future learning. However, the authors observe that the education system should be based on educational innovation and advanced skill development in different technologies. Stachová et al. (2019) analyzed 1482 businesses and differentiated them from those that were highly innovative and those that were less innovative. The study established that the difference in attitude towards employee education was the individual factor that resulted in a difference in innovation among companies. The education of employees can thus be used to enhance the creativity and innovation of companies.
There are different skills that organizations should develop to ensure that their employees are prepared to handle the challenges of the next industrial revolution. Silva et al. (2019) established that there should be several changes in human skills, tasks, and job prospects that should be the focus of industry 4.0. Additionally, employees should focus on improving decision-making skills and the ability to work in different environments. Eberhard et al. (2017) also make similar observations. The authors observe that industry 4.0 would have jobs that have a high demand and that there is a need for employees to develop specific skills to ensure that they can meet those demands. For instance, there will be a reduction in manual work and the new jobs that will be created should be more flexible. With the skill sets of the present jobs changing, there needs to be changes in the education provided by higher levels of learning to ensure that their students can meet the demands of the changing labor market. The new industry 4.0 will thus require an employee to have different skills. Human capital development strategies should ensure that the skills of employees are constantly developed and change with the technological changes to ensure that they remain relevant.
Human capital development that focuses on skills development should focus on different development areas such as personal, social, and methodological. Hecklau et al. (2016) observe that the changing workspaces create a high level of complexity and this creates the challenge to ensure that the human capital fits the complex processes. The methodological skills that were identified as critical to be developed were creativity and critical thinking. Creativity is applied through the need to have more innovative products and critical thinking involves the employees having an objective analysis of different issues and then coming up with solutions. Social skills that were found critical were abilities of teamwork, communication, leadership, and that of transferring knowledge (Hecklau et al., 2016). The most important personal skill that should be developed was flexibility as the increasing virtual work environment required employees to become flexible with their work environment and job responsibilities. The fourth industrial revolution has thus created significant changes in the work environment and human capital development should thus focus on the wholesome development of employees.
One of the critical changes that will be made in industry 4.0 is that more workers will have to work alongside machines and robots. Human capital development should thus focus on ensuring that all employees can work with robots and can also manipulate the functionality of those robots effectively. Rüßmann et al. (2015) identified that manufacturing industries are increasingly using robots to tackle complex assignments. Humans now have to work side by side with robots. Humans cannot be replaced completely by robots and this makes it important to have humans prepared to cooperate working with them. Bahrin et al. (2016) also observe that there is a need to have robot-human capital development programs. The programs can focus on making sure that human beings can work more effectively with robots. For instance, working with robots could involve the use of predictive maintenance programs and advanced analytics. Human capital development should ensure that they are equipped to handle robots with increased efficiency.
In conclusion, it was identified that industry 4.0 has resulted in multiple challenges for the modern workforce. There have been changes in the skills required by employees with the work of low-skilled workers continually becoming obsolete. Human capital development should thus address these challenges by focusing on the acquisition of new skills. Education development that focuses on creativity and innovation was found as critical in equipping the human capital with the required skills. Additionally, employees can focus on improving and acquiring skills such as flexibility. The development of the employee should also be wholesome by focusing on their personal, social, and methodological development. It was also identified that there is a constant need to work alongside the robots and the workforce should be trained on how to manipulate the robots to improve efficiency in their work.
References
Agolla, J. E. (2018). Human capital in the smart manufacturing and industry 4.0 revolution. Digital Transformation in Smart Manufacturing , 41-58.
Bonekamp, L., & Sure, M. (2015). Consequences of Industry 4.0 on human labour and work organisation. Journal of Business and Media Psychology , 6 (1), 33-40.
Bahrin, M. A. K., Othman, M. F., Azli, N. N., & Talib, M. F. (2016). Industry 4.0: A review on industrial automation and robotic. Jurnal Teknologi , 78 (6-13), 137-143.
Eberhard, B., Podio, M., Alonso, A. P., Radovica, E., Avotina, L., Peiseniece, L., ... & Solé-Pla, J. (2017). Smart work: The transformation of the labour market due to the fourth industrial revolution (I4. 0). International Journal of Business & Economic Sciences Applied Research , 10 (3).
Hecklau, F., Galeitzke, M., Flachs, S., & Kohl, H. (2016). Holistic approach for human resource management in Industry 4.0. Procedia Cirp , 54 (1), 1-6.
Mamedov, Z. F., Mineva, O. K., & Glinchevskiy, E. I. (2019). Innovative Approach to Human Capital Management under conditions of strong turbulence of Fourth Industrial Revolution. Economic and Social Development: Book of Proceedings , 1517-1524.
Rüßmann, M., Lorenz, M., Gerbert, P., Waldner, M., Justus, J., Engel, P., & Harnisch, M. (2015). Industry 4.0: The future of productivity and growth in manufacturing industries. Boston Consulting Group , 9 (1), 54-89.
Shahroom, A. A., & Hussin, N. (2018). Industrial revolution 4.0 and education. International Journal of Academic Research in Business and Social Sciences , 8 (9), 314-319.
Silva, V. L., Kovaleski, J. L., & Pagani, R. N. (2019). Technology transfer and human capital in the industrial 4.0 scenario: A theoretical study. Future Studies Research Journal: Trends and Strategies , 11 (1).
Stachová, K., Papula, J., Stacho, Z., & Kohnová, L. (2019). External partnerships in employee education and development as the key to facing industry 4.0 challenges. Sustainability , 11 (2), 345.
