A Propositions and Implications in Conceptualization

of Human Resource Competencies 4.0

Anggia Sari Lubis

, Prihatin Lumbanraja

, Yeni Absah

, and Amlys Syahputra Silalahi

Student of Doctoral Program in Management Science Universitas Sumatera Utara, Medan, Indonesia

Lecturer of Doctoral Program in Management Science Universitas Sumatera Utara, Medan, Indonesia

Keywords: Competencies, Human Resource Competencies, Human Resource Competencies 4.0, Industrial Revolution

4.0.

Abstract: The purpose of this article is to provide a new conceptualization of human resource competencies for

industry 4.0 era. The authors aim to base their new conceptualization on extensive evidence from literature

review, and synthesis of the review of literature. An extensive literature review of the extant

conceptualizations and operationalizations of human resource competencies for industry 4.0 era is first

carried out. Based on the review and synthesis of literature, a human resource competencies 4.0 with three

domain areas is conceptualized, through several propositions in the paper. The human resource managers

can now apply more specifically, any of the three dimensions areas of human resource competencies 4.0 and

understand the conditions under which a particular dimensions area is important for employees to

understand the changes caused by the industrial revolution 4.0 and adjust the competencies possessed by

these changes.

1 INTRODUCTION

The industrial revolution 4.0 provides disruption,

and changing challenges for the entire scope of the

business world. The manufacturing process is

experiencing automation and digitalization which

are increasingly narrowing the role of humans in the

production process (Hecklau et al., 2016).

Transforming the role of human resources is a major

concern both for companies and for humans

themselves (Rahardjo, 2014). Human Resources

(HR) who do not master digital literacy sooner or

later will be eliminated. Types of jobs that can be

automated include data processing, machine

running, administrative tasks and others (Institute,

2017). The development of the industrial revolution

marked by the use of massive technology, the

Internet of Things, Big Data and Artificial

Intelligence (Brijesh Sivathanu, 2018) had an impact

on the disruption of the role of human resources

within the company. As technology develops rapidly

in every aspect of human life, every organization

needs competent human resources (Kock, 2008).

Competence is a collection of human resources that

dynamically demonstrate intellectual capacity,

quality of mental attitude and capability of a person

(Correll et al., 2004). Competence is the initial

capital that must be owned by an employee to be

able to carry out work in accordance with their

duties and responsibilities (Lestariningsih, Mei

2018). Human resource competence is the main

characteristic possessed by a person that causes him

to be able to perform effectively and excel at work,

which includes a combination of: knowledge, skills,

attitudes, and personal characteristics needed to

achieve success in a job (Spencer, 2003).

Competence is defined as the ability or ability

possessed by someone in carrying out their work

(Boyatzis and Boyatzis, 2008).

In accordance with the development of the

industrial revolution, human resources must have the

capability to face job challenges that increasingly

narrow the role of humans in the company.

Competence is an absolute thing that must be owned

by the employees and the business people that are

adjusted to the demands of the times. The concept of

human resource competency 4.0 is a submission of

the concept of competency based on the

development of the industrial revolution which has

reached the stage of the industrial revolution 4.0, so

that employee competencies must be adjusted to the

demands of the development of the industrial

Lubis, A., Lumbanraja, P., Absah, Y. and Silalahi, A.

A Propositions and Implications in Conceptualization of Human Resource Competencies 4.0.

DOI: 10.5220/0009199200740081

In Proceedings of the 2nd Economics and Business International Conference (EBIC 2019) - Economics and Business in Industrial Revolution 4.0, pages 74-81

ISBN: 978-989-758-498-5

revolution 4.0. Human resource competency 4.0 is

the submission of the concept of competency that is

compiled based on the synthesis of literature review

and future management encouragement and the

development of competencies for businesses to deal

with Industry 4.0. Therefore the dimensions of

competencies are adjusted to develop and build

appropriate competencies for the future.

In this article, we try to conceptualize human

resource competencies 4.0 on the practice of human

resource management concepts. The concept of

human resource competence that is developing at

this time, has a very general dimension that consists

of skills, knowledge and abilities that have not been

focused on the needs of the industrial world that is

highly developed and requires flexible and

adaptative human resources who have competencies

in accordance with the development of the

revolution industry. Therefore we provide a new

conceptualization of human resource competency

constructs, which are more forward-looking, such as

integrating the practice of human resource

management concepts with knowledge, expertise

and other specific capabilities that are manifested by

human resources within the company. We first

conduct an extensive literature review of the concept

of human resource management and its derivatives.

We then carry out analysis of theoretical content and

synthesis of relevant literature to take key the

theoretical factors that underlie the construct to

derive three dimensional areas.

Based on these three dimensions, we provide a

new conceptualization of the construction of human

resource competencies. The new definition has clear

boundaries that are depicted, are more contemporary

and apply broadly, these three dimensions include:

(1) Core competencies

(2) Managerial competencies;

(3) Core value competencies;

This research has several important managerial

implications for the company / industry and human

resource department managers, in terms of looking

at the readiness of employees to face any changes

that come both from within and outside the

company, and in carrying out special training based

on the needs of the required competencies, as well in

terms of considering individual characteristics and

competencies possessed by prospective employees

during the recruitment and selection process.

2 LITERATURE REVIEW

2.1 The Human Resource Management

Concept

Human resources have a very important role in

achieving company goals. In a very dynamic and

competitive business world, human resources are

increasingly showing their role in achieving

company goals. The resources of the company are

basically limited, so the company is demanded to be

able to empower and optimize its use to maintain the

company's survival. Of the various resources owned

by human resources, the company occupies a

strategic position among other resources in the

company. Human resource management is currently

moving along with the times when external shaking

conditions are an important factor that must be

considered in achieving company goals. The change

in paradigm for human resource management is

absolutely happening along with the changes faced.

Humans are the most valuable resources in the

company that must be managed professionally by

focusing on the functions of human resource

management namely the formation function,

maintenance function, motivation function and

development function (Suhariadi, 2013).

Furthermore, the challenges faced by the business

world today are influenced by the development of

globalization and the industrial revolution, which

makes the competition in the business world more

stringent, and makes aspects of the quality and

competence of human resources are very important.

At the company level, competency management for

human resources is dependent on human resource

management. Human resource management in order

to adjust competence in accordance with the

challenges of the globalization era and the

development of the industrial revolution is

absolutely necessary, and this is the responsibility of

the human resources division within a company or a

business (Adeniji, 2012).

2.2 Human Resource Competencies

Discussing human resource competencies means

discussing the characteristics of human resources in

this case is the qualified employees who can support

work operations and organizational growth. The

development of an increasingly broad competence of

human resources ensures that human resource

management plays an important role in

organizational success. Characteristics of individuals

who have the skills, knowledge and abilities that are

A Propositions and Implications in Conceptualization of Human Resource Competencies 4.0

used in a manner consistent with achieving the

desired goals are definitions of human resource

competencies (Azmy, 2015). Personality or personal

characteristics, ways of thinking and behavior of

people at work is a unit that forms employee

competencies in addition to knowledge and skills

that can be observed, measured and evaluated

(SUDARSO, 2015). Companies and professionals in

the HR field must be able to respond to internal and

external changes in business, by having human

resource competencies. Values, knowledge, and

abilities of employees are definitions of competence

(Ulrich et al., 2007). Employees with the right

competencies will contribute to the achievement of

company goals (Lubis, 2019).

2.3 Human Resource Competencies

4.0: Review of Literature

The basic concept of competence is one's

understanding, expertise and professional identity.

Competence is a determinant of employee

commitment to the company, employee performance

and employee satisfaction (Alamsyah Lotunani,

2014). The first step in formulating the concept of

human resource competencies 4.0 is to determine a

review of the competencies from previous studies.

The three most recent competency concepts

proposed by The RBL Group and the Ross School of

Business at the University of Michigan formulate the

Human Resource Competency Study (HRCS) into 3

dimensions: relationships, Systems & Processes and

Organization Capabilities (Mike Ulrich, 2015).

Changes that absolutely occur from within and

outside the company, caused by the challenges of

globalization and the development of the industrial

revolution requires companies to adapt. The first

industrial revolution began in the 17th century,

followed by the second industrial revolution in the

early 20th century marked by mass production

activities. The third industrial revolution was marked

by digitalization and the introduction of the internet

that made it easy for people and business processes

(Zeng, 2016). Today the business world is made

easier by the existence of robotics technology,

artificial intelligence, internet of things, big data,

automation in all fields, all of which are summarized

in the concept of the industrial revolution 4.0 (Nagy

et al., 2016).

The industrial revolution can be an opportunity

as well as a challenge for the business world. If you

return to the concept of human resource

management which states that human resources have

an important role in achieving company goals, so

that companies can survive the challenges of the

industrial revolution 4.0, human resources are

needed to be able to respond the changes that arise

and can be flexible in dealing with these changes.

Human resources must have the competencies

required to be able to face the challenges of the

industrial revolution 4.0. Furthermore, after the

competency dimension proposed by The RBL Group

and the Ross School of Business at the University of

Michigan, we will look at the competency

dimension proposed by (Hecklau et al., 2016), which

divides competencies into four dimensions namely

technical competencies, methodological

competencies, social competencies and personal

competencies. Finally, we also include the division

of competency dimensions proposed by Unesco

which divides competencies into three dimensions,

namely core competencies, managerial competencies

and core value competencies. These three

competency concepts with their dimensions and

indicators form the basis of the formulation of the

concept of human resource competencies 4.0.

The second stage is to formulate the challenges

faced by companies and human resources in facing

the industrial revolution 4.0 and determine the

competencies needed to face these challenges. The

various challenges and competencies needed in the

face of the industrial revolution 4.0 are presented in

Table 1 below.

Table 1.

No. Challenge type Required

Competencies

1. The use of

information

technology and the

increasingly high

use of coding and

networking in the

business world

(Tjandrawinata,

2016)

The ability to

understand information

technology and

networks accepts all

forms of digitization

and automation and is

able to learn coding as a

form of communication

language between

humans and com

uters.

2. Changes and

uncertainties in the

business world make

workers have to

work amid these

uncertainties

(YAHYA, 2018)

Work while maintaining

the quality of work and

being able to work in a

professional manner

regardless of changes

and uncertainties.

3. The 4.0 industrial

revolution caused

changes in consumer

behavior so

companies must be

able to innovate to

Employees must be

creative to produce

innovations that are able

to support companies to

innovate products and

services to adapt to

EBIC 2019 - Economics and Business International Conference 2019

match consumer

tastes for products

and services

consumer tastes

4. To be able to

survive in the midst

of globalization and

the industrial

revolution,

companies must

collaborate with

other companies in

order to overcome

the disruption of

supply chain

management and

business processes,

because there is

cooperation to

complement the

limitations of the

company (Vieira et

al., 2013)

Synergy and

cooperation between

companies to

complement each

other's limitations must

be supported by human

resources who are also

able to carry out good

collaboration between

employees in the

company, as well as

between employees of

other companies.

Mutual communication

skills are needed so that

the collaboration

process can run well

No. Challenge type Required

Competencies

5 The borderless

world causes every

country in the world

to conduct business

activities without

interruption of

distance and time

(

Kohnová, 2018

)

Interactions that occur

between companies in

every country in the

world must be

supported by employees

who can accept cultural

diversity and master

forei

n lan

6 High uncertainty

faced by the

company (Nurazwa

Ahmad, 2019)

The uncertainty faced

by companies requires

the expertise of

employees to think

critically and

analytically in order to

be able to solve

com

lex

roblems

7. Technology trends

are developing in

business (Mohamed,

2018)

The ability to increase

knowledge in line with

developments and

changes in the world of

technology associated

with the field of work

involve

8. Smart process,

Smart product, and

smart after sales

service are a must in

business success in

Industry 4.0 (Uygun,

2018)

Smart process, Smart

product, and smart after

sales service can be

realized with the

support of human

resources who can work

productively and focus

on achievin

oals.

9. Digital

transformation is a

must for companies

(Maksumic, 2017)

Demands for

digitalization for

companies must be

supported by employees

who are able to share

knowledge related to

changes implemented in

the company and are

able to improve work

results in a sustainable

manne

10. The transition from

only the use of hard

skills to a

combination of hard

skills, soft skills and

work-related

knowledge.

(Ermolaeva, 2016)

Employees must have

Confidence in attitudes

and expectations to

make standard actions

in the workplace that

use resources carefully,

attentively and in

connection with social

ustice.

No. Challenge type Required

Com

etencies

11. New Working

conditions regards to

interface and control

tasks (Sorko S. R.,

2016)

Changing working

conditions result in

increased control of

work that requires

quality and useful

decision making

abilities

12 Resistance To

change for company

and employee

(Trstenjak, 2018)

Resistance to change is

the biggest obstacle for

the company in the

midst of very dynamic

conditions of change

and very competitive

competition. Leadership

skills are absolutely

necessary as a driver for

the success of change,

so that employees are

able to motivate

employees to want to

adapt to be flexible,

adaptative and accept

chan

3 CONCEPTUAL FRAMEWORK

TOWARDS A NEW

CONCEPTUALIZATION DATA

Based on a review of the human resource

competencies and human resource competencies

literature 4.0, we formulated a new

conceptualization for the concept of human resource

competencies 4.0, due to the limited scope for the

concept of human resource competencies. With a

complete literature review, we formulated three

construct domains which are dimensions of human

resource competencies 4.0. The three construct

domains address issues that fill and form gaps for

the concept of human resource competencies that are

A Propositions and Implications in Conceptualization of Human Resource Competencies 4.0

adapted to the development of the industrial

revolution. For example the important thing in the

domain area left behind from the construct domain

of human resource competencies is having the

ability to master ICT, networking and coding skills.

Now we will discuss three domain areas from the

construct of human resource competencies from the

literature review. These aspects have been derived

from various studies in the literature on human

resource management, the concept of human

resource competencies, the concept of industry 4.0

and other related matters. We therefore place and

discuss three propositions to provide new and

expanded conceptualizations of concepts:

P1: The dimension of human resource

competencies 4.0 is core value competency which

is a competency that must be possessed in order

to achieve company goals which is the core

principles and rules which are a reference in

acting for members of the organization.

The industrial revolution 4.0 will bring changes to

the work model of employees who will certainly

utilize Information, Communication and Technology

(ICT) to the fullest, use work-related software to

support work efficiency and effectiveness, and have

the coding skills that are indispensable in working in

an era industrial revolution 4.0. Further propositions

in this study relate to the core competencies that

employees must possess that will support the

achievement of company goals. Core competencies

are the main competencies grouped in aspects of

attitudes, skills and knowledge that employees must

have in carrying out their duties and responsibilities

at work. Core competencies must describe a

balanced quality between the achievement of Hard

skills and Soft skills, then the second proposition in

this study is:

P2: Human resource competencies 4.0 requires

core competencies related to a combination of

hard skills and soft skills that can improve

aspects of adaptability and quality of work.

Considering the challenges faced by companies that

are of enormous changes coming from internal and

external companies, globalization and the

development of the industrial revolution as well as

competitive conditions that have reached the

hypercompetitive stage, therefore there is a need for

managerial competencies that guide the company to

succeed in facing these challenges. Employees must

have managerial competence which is an individual

competency concept that is more focused on the goal

of improving management performance within the

scope of the company carried out by employees,

which is a combination of activities, knowledge,

skills or attitudes as well as personal characteristics

possessed by employees. The concept of managerial

competence is more focused on the approach to

behavior and managerial personality that companies

need to support the stability and sustainability of the

company amidst the changes caused by

globalization, the development of the industrial

revolution and hypercompetitive competition

(Boyatzis and Boyatzis, 2008).

P3: Companies need managerial competence for

the success of achieving company goals, so the

managerial competence is a dimension of human

resource competencies 4.0.New definition of

Human Resource Competencies 4.0

Based on the three domain areas positioned above

from human resource competencies 4.0, we define

human resource competencies 4.0 as:

Employees' capabilities or capabilities that are

adapted to the development of the 4.0 industrial

revolution with a combination of expertise in the

fields of ICT, hard skills and soft skills that are

formulated based on future management

encouragement and competency development for

businesses to deal with Industry 4.0.

The construct of human resource competencies 4.0

has the following three domain fields. We illustrate

this construct and its domain area in Figure 1.

1. Core Value Competencies

2. Core Competencies

3. Managerial Competencies

Figure 1: Domain of human resource competencies 4.0

and its three domain areas.

4 MANAGERIAL IMPLICATIONS

CONCLUSIONS

Human resource competence is becoming

increasingly important in the ongoing changes

driven by globalization and the development of the

industrial revolution. This is because human

EBIC 2019 - Economics and Business International Conference 2019

resource competence is an amalgamation of the

abilities, knowledge, and expertise that exists in

employees that can support the achievement of

company goals. The concept of human resource

competency 4.0 is a submission from the

development of the concept of resource competency

based on the challenges faced by companies in the

era of the industrial revolution 4.0. Three main

dimensions consisting of several indicators in the

concept of human resource competencies 4.0 can be

used as a reference by companies, HRD managers in

preparing recruitment and selection planning, as well

as training and developing employees in the

company in order to have competencies that are in

accordance with the needs and demands of work in

the revolutionary era industry 4.0. This study has

several significant managerial implications (see

Table I to see a direct comparison between

traditional conceptualizations of new orientations of

human resource competencies).

First, new conceptualizations for companies and

HR managers, three specific domain areas that are

the focus for managing and controlling employees.

Each of these three domain areas can be a useful

diagnostic tool for managers to develop strategic

human resource planning for companies, especially

in the context of recruitment and selection for

prospective employees.

Second, the three domain areas can separately

act as diagnostic tools that are useful in identifying

the specific training needs of employees. Based on

the diagnosis of the usefulness of each domain area,

design and implement improvements in accordance

with the demands of the industrial revolution era 4.0.

For example, if the results of performance appraisal

from employees indicate that employee performance

has decreased performance oriented to one of the

three domain areas, HRD managers can nurse

customized training programs. This approach is

more effective than identifying general training

inputs, or recommending the same in training

programs for all employees.

Table 1. Comparison of traditional and new definitions of

human resurce competencies, its domain areas, and its

implications

Old vs new

conceptualization

Domainareas

Implications

Competence is a

basic

characteristic that

a person has or a

combination of

characteristics

possessed by

someone who can

show superior

performance

(Spencer, 2003)



Skill



Knowledge



Ability

Superior

Performance

Employees'

capabilities or

capabilities that

are adapted to the

development of

the 4.0 industrial

revolution with a

combination of

expertise in the

fields of ICT, hard

skills and soft

skills that are

formulated based

on future

management

encouragement

and competency

development for

businesses to deal

with Industry 4.0.

(New definition

proposed in

this paper)



Core Value

Competencies



Core

Competencies



Managerial

Competencies

 New

constructs

 The three

different

domain

areas can

followed

up by

manageme

 Employee

Readiness

to change

 Focus on

understand

ing

flexible

competenc

hierarchies

accordance

with the

developme

nt of the

industrial

revolution,

and

creating

employee

commitme

Finally, the three domain areas will be useful for

the new workforce that will enter the workforce,

namely Generation Z or final year students. Three

domain areas in the concept of human resource

competencies 4.0 will be a more comprehensive

representation of their readiness to enter the world of

work, where indicators in these three domain areas

can be used as a reference in their success in

entering the world of work. This study contributes

by conceptualizing the conceptualization of the old

domain vs. the new implication of the extent to

which Generation Z in completing and developing

the competencies that they must have for success in

A Propositions and Implications in Conceptualization of Human Resource Competencies 4.0

the world of work is affected by the development of

the industrial revolution.

ACKNOWLEDGEMENTS

 I would like to express my very great

appreciation to my mother, my husband and my

children for their support and encouragement

throughout my study.

 I would like to express my very great

appreciation to Prof Dr. Prihatin Lumbanraja,

M.Si, Dr. Yeni Absah, M.Si, Dr. Amlys S

Silahahi (my research supervisor) of their patient

guidance, enthusiastic encouragement and useful

critiques of this research work and Their

willingness to give their time so generously has

been very much appreciated.

 I would also like thank to Dr Endang Sulistya

Rini, M.Si, and Dr. Bebby Karina, M.Si for their

valuable and constructive suggestions during the

planning and development of this research work.

 I would like to express my deep gratitude to

Universitas Muslim Nusantara Al Washliyah

Medan for their valuable support during my

study

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