The Effects of Industry 4.0 on Human Resources Management

Abstract

The opportunity of the internet in terms of eliminating the distance and the ability to instantly transfer large data influence many areas of life, and deeply affect industrial production and processes. High-tech manufacturing operations feel these changes earlier. It is inevitable for the enterprises operating with traditional technologies to be exposed to this effect in parallel with the change of environmental structure. In this study, the concept of Industry 4.0 is considered as a concept and secondly how human resources managers perceive this process from the viewpoint of human resources management of the four advanced technology companies operating in the Bursa region is investigated. An in-depth interview method was used to gather information in the study. As a result of the research, the expectation is that the Industrial 4.0 transformation of the industry will deeply affect human resources management processes due to its business environment. At each
stage, it is foreseen that technology-integrated business processes will cause some of the unskilled employees to lose their jobs, while the higher qualified employees will be needed more, but it will be difficult to find these employees and keep them at work.

Full text

ErtuğrulYıldırım / HamzaÇeştepe (eds.)
Globalization, Institutions and
Socio-Economic Performance
Macro and Micro Perspectives

Osman Bayraktar1 and Canan Ataç
e Eects of Industry 4.0 on Human
Resources Management
Abstract: e opportunity of the internet in terms of eliminating the distance and the
ability to instantly transfer large data inuence many areas of life, and deeply aect indus-
trial production and processes. High-tech manufacturing operations feel these changes
earlier. It is inevitable for the enterprises operating with traditional technologies to be
exposed to this eect in parallel with the change of environmental structure. In this study,
the concept of Industry 4.0 is considered as a concept and secondly how human resources
managers perceive this process from the viewpoint of human resources management of
the four advanced technology companies operating in the Bursa region is investigated. An
in-depth interview method was used to gather information in the study. As a result of the
research, the expectation is that the Industrial 4.0 transformation of the industry will deeply
aect human resources management processes due to its business environment. At each
stage, it is foreseen that technology-integrated business processes will cause some of the
unskilled employees to lose their jobs, while the higher qualied employees will be needed
more, but it will be dicult to nd these employees and keep them at work.
Keywords: Industry 4.0,Big Data, Internet of Objects, Smart Factories
Introduction
e greatest power of European economy is based on industry. Seventeen per-
cent of the European Union GNP is of industrial origin. is industry power
provides 32million jobs. Despite this, in recent years industrialized European
countries have been having diculty competing with developing countries. e
main reason for this is the aging population structure. According to the estimates
of the Economic Policy Committee and the European Commission, by 2050 the
population in the 24–60 age group will decline by 16% to 48million while the
elderly population will increase to 58million (Qina etal. 2016). Western coun-
tries, which anticipate that this change in population structure will force them
to compete in the future, have attempted to redesign their industries in such a
way as to require the least labor force. e most important factor behind the
industry’s 4th move is the incentive to stay behind.
1 Correspondent writer:Osman Bayraktar e-mail: obayraktar@ticaret.edu.tr

Bayraktar and Ataç338
Industry 4.0 nomenclature belongs to Germans (ESO 2015). However, other
industrial countries in the world are aware of this new wave in the industry, and
every country develops a policy on its own within this area. China called its own
industrial development plan “Made in China 2015” (Qina etal. 2016), which is
similar to Industry 4.0 in 2015.
With this change, intelligent robots will be used more eectively in all
business processes. When we look at the case from the perspective of human
resource management, the change aimed at the Industry 4.0 initiative will
require less manpower in production, and qualications in the labor force will
change. e human resources departments have to keep up with this transfor-
mation by renewing themselves. Aer all these changes, not only the enterprises
but also the state policies should be updated in line with the formation of the
Industry 4.0. It will be inevitable to lag behind the global economy by losing
the competitive power for companies and states that cannot make this update
(ESO 2015).
Overview of Industrial Revolutions
e Industrial Revolutions are seen as the basis of many innovations, moder-
nity, and transformation in the world. e economic transformation that began
in England in 1760 spread to other European countries. Prior to the Industrial
Revolution, the economy was based on agriculture and animal husbandry, and
tradesmen and crasmen engaged in cras such as weaving, blacksmithing, and
handcraed benches. With the invention of the steamer, economical structure
based on economics, mechanization and serial production based on soil, agri-
culture, and muscle power has been passed. e amount of production and sales
increased with the mechanization. e capital, which is in production, has made
more production using machinery, and big companies have begun to be born.
e population started to gather in the cities with new job opportunities, which
resulted in a rapid population increase. e economy has recovered, and the
standards of living have begun to improve (EKOIQ 2014). Below are the stages
of three Industrial Revolution and production processes.
First Industrial Revolution
e First Industrial Revolution covers the period beginning in the 1760s and
going through the 1830s. In this process, production has evolved from hand and
muscle strength to machine use. By using coal and steam instead of wood, the
power of the machines has been increased. is situation has caused mechani-
zation and establishment of factories. Family companies and small enterprises

e Eects of Industry 4.0 339
have le their place in large factories. e use of steam, coal, and iron as energy
sources and raw materials accelerated railway development. e rst Industrial
Revolution was dened as the machinery of production (Siemens 2016).
e First Industrial Revolution, which began in England, spread throughout
Europe and America over time. is radical change in production has also
aected social construction. e average lifespan was prolonged, and the pop-
ulation increased. Everyday life has become practical, and quality of life has
increased.
With the increase in the number of products produced with the reason of
mechanization, Europe has turned to the Middle, Near, and Far East where it
can oer prizes and sources of raw materials. International relations have been
aected by this situation (ESO 2015).
Second Industrial Revolution
e Second Industrial Revolution covers the period 1840–1870. Aer the rst
Industrial Revolution and the mechanization of production, the foundations
of the new revolution have begun to emerge. e Second Industrial Revolution
started with Henry Ford’s mass production band design. e Second Industrial
Revolution has emerged with changes in basic raw materials and energy sources.
Steam, coal, and iron, as well as steel, electricity, petroleum, and chemical
materials have been used in the production process (Alçın 2016).
e development of steel production has played a major role in the devel-
opment of the production network, especially the railways. e facilitation of
transportation made it easy for the products to reach new markets and supply
raw materials. On the other hand, other new developments such as telephone,
radio, typewriter, and cheap newspaper paper have also shaped communication
and transmission.
In the Second Industrial Revolution, electric technology was developed
and started to be used in production lines. is has allowed us to develop the
machines, increase the amount of production, and meet the concept of mass
production. e main actors of the Second Industrial Revolution were England,
Germany, USA, and Japan. is revolution is dened as the massication of
production.
ird Industrial Revolution
In the rst half of the twentieth century, industrialization and technological
progress slowed down due to the two great world wars. In addition, negative
economic developments such as the 1929 global crisis were experienced. e

Bayraktar and Ataç340
ird Industrial Revolution began to use programmable machines, which in
1970 caused mechanical and electronic technologies to leave their place in dig-
ital technology. In this period, technologies such as computers, microelectronics,
ber optics, lasers, telecommunication, nuclear, biotechnology have inuenced
the direction and form of development production. With the use of computer
and communication technologies in production processes, mechanical and
practical products have begun to enter our lives (ESO 2015).
In the ird Industrial Revolution, renewable energy sources such as the sun
and the wind have become important with the irreparable sources and environ-
mental concerns. us, the need for body power begins to grow.
Now we are in a period of a new industrial revolution. It started with a period
in which interrelated processes were in communication, objects connected to
each other via internet gathered data and completely changed the production
process, and machines started to emphasize interaction with people.
New Revolution:Industry 4.0
e concept of the Industry 4.0 can be described as an increase in the amount of
digitization throughout the entire value chain, and a possible structuring of data
transfer between people, objects, and systems in real time. e Fourth Industrial
Period emerged when the machines used in production started to manage them-
selves and production processes without the need for human power. is struc-
ture, which is referred to by the concept of “the Internet of objects”, extends to
the self-management of the manufacturing factory.
e Fourth Industrial Revolution was rst spoken at the Hannover Fair in 2011.
In October 2012, the Bosch Group and former SAP CEO Henning Kagermann
created a working group and presented the Fourth Industrial Revolution pro-
posal le to the German Federal Government. e German government began
preparing its own Industry 4.0 transformation roadmap in 2013. Bosch took part
in the Industry 4.0 working group and played a leading role (Siemens 2016).
Industry 4.0, which was adopted at the beginning of 2011, has become a
market of billions of euros from a technical term within a period of 6years. By
2020, it is expected that only 140 billion Euros will be invested in Industry 4.0
within Europe. Furthermore, it is anticipated that 14 billion devices will interact
with each other through the Internet of objects (ESO 2015).
In 2013, the “Industry 4.0 Platform” (www.plattform-i40.de) was put into
practice to prevent the Industry 4.0 from being just one theory and to take ac-
tion. is platform is primarily aimed at supporting the development of new

e Eects of Industry 4.0 341
technologies, dening the basic standards for the Industry 4.0 vision, identi-
fying new business models, and conducting community awareness activities
(Siemens 2016).
Over time, the concept of Industry 4.0 has become the focus of all countries
that have developed beyond Germany to design a new industrial system. With
the support of the necessary legal regulations, this concept is intended to be
more widespread and to create more eective opportunities for new products
and processes. Industry 4.0 also presents various challenges and threats for
businesses. e diculties of this diversity can be summed up in four areas:eco-
nomic, social, technical, and environmental (Hecklaua etal. 2016).
Distinctive Features of Industry 4.0
e distinguishing innovations this new era brings are as follows:
• Global interaction of storage systems and resources with machines.
• e development of unique intelligent products with location knowledge.
• e smart factories, adapting to product specications.
• Realization of new business models.
• New social infrastructure in the workplace for the employees, business struc-
ture being sensitive to individual dierences.
• Better work/life balance.
• Responding to individual consumer demands.
• Intelligent soware developed for immediate response to engineering and
problems.
Concepts Related to Industry 4.0
It is necessary to know its concepts in order to understand Industry 4.0. Knowing
these concepts gives important clues about what might be happening today and
in the future.
3D Printers
e 3D printer is a machine that transforms digital three-dimensional computer
data into real objects that can be handled. All mechanical parts except engine
and electronic parts are printed by 3D printers (Festo 2016).
3D printer technology addresses a wide area. e areas of usage of this
technology have a range from information technologies, genetics, medicine,
to industry, food, and jewelry. With 3D printers, a lot of things are produced,

Bayraktar and Ataç342
including human tissues and musical instruments. ese devices drastically
reduce production costs.
While the creation of the design in the virtual environment is achieved
through various CAD programs, the CAD is scanned with an existing object
and transferred to the virtual center by scanning. Prototypes that can move with
unlimited color options are produced with 3D printers.
Internet of Objects
Objects must communicate with each other through the use of the Internet as an
intermediary, and their work is their own management. It is really important in
terms of facilitating our daily life. Smart home technologies are examples of this.
is structure, also called “Internet of Industrial Objects”, makes smart factories
even smarter. us, products with many dierent and complex structures can be
produced in shorter time and in quality (ESO 2015).
Virtual Reality
e virtual reality is the main feature of Industry 4.0. Virtual reality is the live,
direct, and indirect imagery of the real-world objects enriched by computer-
generated sound, image, graphics, and GPS data (ESO 2015). e concept of vir-
tual reality is applied in many dierent areas such as video games, entertainment
sector, military applications, health sector, education, tourism, architecture, and
sales-marketing. In the industry, the virtual environment is used at every point
such as production planning, design, production, service, maintenance, testing,
and quality control (Bayraktar and Kaleli 2007).
Smart Factories
Digitalization has confronted humanity with the concept of intelligent life. In
the past, the everyday work carried out by muscular power can now be realized
by machines and internet networks. e application of cyber-physical systems in
production systems is called Smart Factory. Fiy percent of German companies
are planning industrial networks, while 20% have already transitioned to the
intelligent factory of Industry 4.0 (PWC 2016).
Features of smart factories include:
• Being successful in managing complex production processes smoothly and
quickly.
• Its products being smooth and long-lasting.
• Inside them, machines, people, and production resources are in interaction.

e Eects of Industry 4.0 343
Cyber-Physical Systems
e cyber world is based on the physical side of the world. e boundaries of the
physical world expand with the cyber world. e cyber-physical systems thatthe
cyber and physical world come together are made up of these two elements.
ese two worlds communicate with each other with a designated internet ad-
dress on the Internet. It is called the virtual environment which is created by the
simulations of the objects in the real world. Cyber-physical systems include mon-
itoring, control, and coordination, as well as computation and communication.
e cyber-physical systems, which aim to raise the boundaries between
real and virtual worlds, and to create a wide communication network with the
Internet of objects, constitute one of the forces at the core of Industry 4.0. Cyber-
physical systems are intelligent systems in which ever-changing data are simul-
taneously linked together in a virtual cloud system. e aim of this system is to
realize “intelligent monitoring” and “intelligent control”. e best example of this
is the Smart Factories. For example, failures occurring at any stage of produc-
tion can be eliminated immediately and on the spot, and the system can operate
at full capacity and without any problems. is system can also make a dier-
ence in R&D, design, and marketing processes. For example, before a factory is
physically installed, all feasibility studies can be done by simulation. Asignif-
icant number of manufacturers have begun using radio frequency identica-
tion (RFID) production, which can be evaluated under “Smart environments”
or “Wireless sensor networks”. First, Volvo Trucks used RFID systems based on
information systems in the production of Toyota automobile parts (Siemens
2016) to ensure continuity in production.
Big Data
e advancement of technology, the development of the Internet, and the social
media revolution have facilitated access to information. e information that is
easy to access also brings the problem of useless and wrong information with it.
is mass of information has been described as information garbage. Extracting
real and reliable information from this area, where so much information is
involved, leads us to the concept of Big Data.
Big Data, social media sharing, Internet statistics, blogs, photos, videos, logs,
etc., transform all collected data from sources such as textures into meaningful
and workable forms. When this converted data is correctly interpreted, it makes
a great contribution to companies taking strategic decisions and managing their
risks. Accurate strategic decisions are made up of accurate information. at’s
why it’s great Big Data for Industry 4.0 (Alçin 2016).

Bayraktar and Ataç344
Firms have understood how important even the slightest information is. It
is known that such valuable data are everywhere. Every click we make while
using the Internet is a very important data source. RFID and sensor technol-
ogies are constantly accumulating data due to their environment. All of this,
nancial data, medical data, when they all come together, are giant data. All the
information we need is in Big Data. For example, they record every move made
by an information technology company’s systems and nd answers to questions
such as “which faults are related to each other”, “how much does your problem
system aect its performance”. A bank can identify fraud attempts from cus-
tomer actions. Asocial sharing site can analyze the likes and dislikes of its users
and show them the best ads. Astore can analyze the customers’ products and
oer them the best products and increase their sales. Big Data shed light on the
future (Big Data 2017).
Smart Robots
e robot is described as an electro-mechanical device that performs pre-
programmed tasks. e biggest use of robots is industrial production. Robot
technology is called “Robotics” and “Mechatronics” in the literature. When
we say “automation”, robots or robotic technologies come to mind. Robots are
still widely used in production. Robot technologies are important to increase
the eectiveness of Industry 4.0. For example, in smart factories, robots will
manage production by recognizing each other, doing business, communicating,
analyzing, and adapting more quickly to changes. In the automotive sector, in a
variety of production processes such as paint, assembly, welding, quality con-
trol, a large number of robots are used. With Industry 4.0, robots are aimed
at achieving a totally robotic approach to production. For example, the robot
responsible for the welding process may be able to provide other points of ser-
vice by updating its soware if necessary in the installation area. Moreover, it
will do so entirely on the basis of its own observations, analyses, and predictions
(Festo 2016).
Simulation
Simulation is dened as the creation of an articial environment or imitation of
the order in a timely manner for the operation of any process or system in the
technical sense. Imitating processes or systems in the real world very close to
reality provides great advantages in many respects from saving time from human
eort to avoiding gains from economic gain (EKOIQ 2014).

e Eects of Industry 4.0 345
Aer the steam, electricity, and computing forces entering the factory in
the rst three industrial revolutions, the simulation technology is now used in
factories and provides signicant benets.
Horizontal and Vertical Integrations
e continuous stream of data provided by interconnected structures underlying
Industry 4.0 is a critical point of production. In order to achieve this ow, hori-
zontal and vertical integration must take place not only at certain points but also
at every point.
“Horizontal integration” means a continuous ow between each step in the
production and planning process itself, as well as between the steps of produc-
tion and planning processes of dierent enterprises from raw material procure-
ment to design, to production, to marketing, and to recycling.
“Vertical integration” means providing uninterrupted communication and
ow of technological infrastructure used in all processes. e integration of
sensors such as sensors, valves, motors, control panels, production management
systems, and ERP soware in the production area is covered in this scope.
With vertical and horizontal integration, Industry 4.0 is able to respond quickly
to changes and problems in the production process, facilitating private and per-
sonalized production, and optimizing the global supply chain. Businesses are
becoming more exible. e changes are provided by simple interface updates
(www.innovarobotik.com 2016).
Cloud Computing Systems
Along with the advances in information technology, increasing data volumes
and increasing use of the internet have begun to force existing hardware sys-
tems and soware. With this need, the concept of cloud computing systems has
emerged. Cloud computing is the general name given to services that provide
information sharing between computing devices. It has been adopted by com-
puter theorists that the future of the Internet passes through the cloud system.
ere is a sense that the cloud system will be used instead of future hard disks
(www.innovarobotik.com 2016).
e industry benets from 4.0 cloud computing. Features such as large storage
areas and advanced computational power make it possible to collect, analyze,
and store data in production. Communication between intelligent devices has
also led to a new breakthrough in the industry by working together with Big
Data, the Internet of Objects, and Cloud Computing.

Bayraktar and Ataç346
Compliance of Companies to Industry 4.0
Up to this point, we have been given information about the reasons for the emer-
gence of Industry 4.0, its development, and the point it is at today. is informa-
tion makes it clear that Industry 4.0 is experiencing breakthrough developments,
that technology continues to progress continuously, and that companies outside
of this development will be destroyed.
With Industry 4.0, the following developments will be faced.
• Production process will be digitized.
• Production processes will manage themselves.
• Products will be able to carry information and provide this information to
consumers.
• e Internet of objects will dominate the entire factory, the rm, and the
business world.
• Production performance will be higher.
• All data and business principles will be analyzed in digital programs and intel-
ligent systems.
• Resources will increase, costs will decrease.
Diculties in adapting to Industry 4.0 will be discussed below.
• Standardization
• Process/work organization
• Eligible products
• New business models
• Security/know-how applications
• Qualied workforce
• Research
• Training/professional development
• Legal infrastructure
We can foresee that companies and countries should take the following steps in
order to comply with Industry 4.0.
• Strengthen the technological infrastructure.
• Informatics technologies should create training programs to strengthen inno-
vation and entrepreneurship.
• Identify new business models.
• New technologies should be developed.
• Provide new collaborations appropriate to the digital world.

e Eects of Industry 4.0 347
• Identify the priorities of producers.
• Increase the quality of the changing workforce.
e Impact of Industry 4.0 and Human Resources Management
In the United Kingdom, in a research study, there are three technological bases
(Rhisiart etal. 2014) that have radically inuenced the future of the business:arti-
cial intelligence and robots, shaky developments on the Internet, and time and
space constraints for the acquisition of skills. “At present, at least 65% of chil-
dren who go to primary school will work in jobs that do not yet exist when
they have completed school education,” said WEF (2016), the World Economic
Forum’s “Future of Jobs” report. Nine of the 18 factors that are predicted to af-
fect business structure in the future are the roots of technology:mobile internet
and cloud technology, the increase of computing power, hence the processing
capacity of Big Data, new energy providers and technologies, Internet of objects,
mass information exchange via internet, sharing economy, peer-peer sharing
platforms, highly developed robotic and independent transportation, articial
intelligence and learning of machines, advanced production and 3D printing
systems, advanced materials, biotechnology and genomics.
We actually see some of these eects in our lives. e results of one part will
be reected in your life in the next few years. ese developments will aect the
technological, socio-economic, geopolitical, and population structure, but will
also lead to the emergence of new business categories and new professions while
also removing some of them. ese developments will change the set of skills
needed in both old and new jobs, redene how and where people will work,
require a new management understanding and new management regulations.
According to estimates, these developments in technology will lead to the disap-
pearance of 7.1million people in the period between 2015 and 2020; three out of
which will be from the oce and management business partner, and one third
from other smaller business families (WEF 2016, p.13).
In the future, the ability to manufacture will come from a more critical factor
than capital. e increase in the level of your ability will result in lower wages in
the lower skill, higher wages in the higher skill, which will increase social tension
(Schwab 2015).
Industry 4.0 will change the daily lifestyles of communities and all the habits
of business life. is change will have to keep pace with states, societies, compa-
nies, and employees. ose who cannot catch up with change will face the risk of
economic disappearance.

Bayraktar and Ataç348
is change, which takes place over states, societies, companies, and
employees, will also aect human resource management in a fundamental way.
Industry 4.0 will change all steps from production to distribution, from distribu-
tion to marketing, and will incorporate radical innovations within the organiza-
tion. At the center of these innovations will be human resources. Agile companies
with easy-to-change adapters will pass before the competition. In order for the
agile process to spread throughout the company, human resources will need to
Tab. 1: Knowledge and Skills Required for Activities in Your Future Factory. Source:Lars
Gehrke etal. (2015), “Industry 4.0., ADiscussion of Qualications and Skills in the Factory
of the Future”, www.vdi.de.x
Must Should Could
Technical
Qualications
and Skills
IT knowledge and abilities,
Knowledge Management,
Computer programming/
coding abilities
IT knowledge and
abilities, Knowledge
Management,
Computer
programming/coding
abilities
IT knowledge
and abilities,
Knowledge
Management,
Computer
programming/
coding abilities
Data and information
processing and analytics
Interdisciplinary/
generic knowledge
about technologies and
organizations
Specialized
knowledge about
technologies
Statistical knowledge Specialized knowledge
of manufacturing
activities and processes
Awareness of
ergonomics
Organizational and
proccessual
understanding
Awareness of IT
security and data
protection
Understanding of
legal aairs
Ability to interact with
modern interfaces
(human-machine/
human-robot)
Personal
Qualications
and Skills
Self and time
management
Trust in new
technologies
Adaptability and ability
to change
Mind-set for continuous
improvement and
lifelong learning
Team working abilities
Social skills
Communication skills

e Eects of Industry 4.0 349
redene its mission, job denition, and responsibilities (Alayoğlu 2010). Tab. 1
summarizes the qualications that are expected to have occupations for future
employees.
e impact of Industry 4.0 on human resources management processes is
explained below.
Strategic Perspective
In order for human resources to be able to contribute to business results, business
units need to be strategic partners. In order to achieve this, HR specialists who can
understand and interpret nancial data, have a good command of the dynamics
in the sector in which the company operates and to the up-to-date developments,
and who contribute to important projects carried out in the company and develop
applications and projects parallel to these elements will be needed.
Employment
According to the researches, employment is aimed to grow by 6% in the 2020s.
is growth will increase consumption, and the economy will be aected. e
presence of equipped elements in the installation and development of intelligent
devices and systems will be crucial. With digital conversion, all processes and
customer expectations will change.
With the spread of robots, technological unemployment will arise.
Technological developments will change the structure of the workforce in the
short run and partly cause unemployment. In the long run, the labor force will
increase in quantity and quality. e muscular power in the past will leave its
place to the mind. Intelligence will also increase the level and quality of educa-
tion. In the long run, highly qualied individuals will be employed. Robots and
people will act together and be managed together in harmony (EKOIQ 2014).
It will be very dicult to nd these talents. e denition of the workforce
will change. Consultants, home oce workers, freelancers, brand awareness
professionals, and suppliers will contribute to the activities of periodic and
project-based companies. ese people will never be deprived of their jobs due
to their talents. Objective perspective lines will present dierent perspectives as
an eye from outside with fresh information. is will make the companies rich.
Performance Management
Depending on changing corporate structures, new generation performance
measurement tools will emerge in the coming years. e concept of perfor-
mance consulting will take its place in business life. From a classical performance

Bayraktar and Ataç350
perspective that values seniority, it will shi to a performance manage-
ment understanding that rewards young and hardworking employees. Today,
employees want to work with managers who empower and inspire them, to
give feedback to managers, to regularly talk about company goals, and to follow
developments in this area (Alayoğlu 2010). Still, many companies continue to
incorporate new performance measurement methods into their work systems.
New network performance measurement methods are much more active than
the old ones. To build an eective system, it is necessary to build a complex
structure with components such as continuous monitoring, routine checks, per-
formance coaching, sta development, performance reviews, and returnability
infrastructure for leaders. ese data must also be viewed on a digital system.
Companies that provide human resources soware services will have to move
very fast and keep pace with change.
Reaching the Talent
Human resources will nd it dicult to nd human resources with the capabil-
ities required by digital conversion and Industry 4.0. Human resource manage-
ment, which focuses on closing open positions, will leave a proactive approach
to talent-oriented, talent-driven proactive approach (LinkedIn 2015). Human
resources will want to reach out to qualied personnel from all over the world
in order to nd and deploy the company’s required skills, and new strategies will
be developed in this direction. ese employees will provide exible working
opportunities for working in the countries where they are located.
Although their competencies are high and the number of qualied sta is
high, nding the right talents and positioning them will be one of the biggest
challenges in the coming periods. In the coming years, it will become even harder
to nd people with talent, experience, and skill and to put them into the right
jobs. Populations in developed countries are declining, and the baby boomer
generation will begin to retire. is necessitates nding talented people from
developing countries and joining them in the workforce.
With the digital era, Turkey’s most beloved countries have their own abilities;
countries with employees who think their skills are inadequate are Germany,
Japan, USA, Romania, and Hungary (EKOIQ 2014).
ere will be deciencies in skills in elds that require technical skills such as
information technology, mathematics, medicine, and engineering. In this case,
companies will try to nd and win people with critical skills. e only way to
be successful in this competition is to set up your own talent management sys-
tems and integrate them into HR processes. Companies that set up their own

e Eects of Industry 4.0 351
talent systems and actively use their processes have a nancial performance that
is over 300% higher than their competitors and twice as much as their labor
force applicants on the market (EKOIQ 2014).
Almost all employees in enterprises will be in the status of “knowledge
workers” who do business with technology help. It will not be easy to nd next-
generation digital capabilities such as Data Scientist, Articial Intelligence
Specialist, Application Developer, Cloud Architect, or Agile Project Specialist.
An important part of these abilities is very far from the concepts such as CV,
LinkedIn, and Assessment. In this case, standard resource hiring and recruit-
ment methods will not work. Companies like Facebook, Google, Microso,
and Amazon, which are advantageous in terms of culture and activity, will gain
importance in order to nd these proles and gain them to companies. In today’s
business world, we are experiencing serious problems in terms of the ability of
digital talents to come out and be protected even if they do. e value judgments,
habits, and behavior of companies cause this.
Training
Training is one of the most important elements of Industry 4.0. Recruitment of
the intelligent machines and the qualied workforce that can use these machines,
training of the expert sta, the formation of a structure that will perceive the
cyber-physical systems, and the updating of the education system from primary
school to the university parallel to these developments gains importance in time.
Data-Based Management
e most important decisions taken by institution concern employees. It is nec-
essary to take into consideration the data and vital information that is vital for
the company. HR analytics will be on the agenda of more and more companies,
and governance-based management will become very important. It will be ben-
ecial to incorporate data that will support personal comments and decisions in
the HR eld.
Protection of Information
Human resources have a detailed database of employees’ personal information.
e protection of these data is very important for both the employees and the
company. In the business world, the protection of condential information has
become a critical process. Risks in human resources are the protection of the
data, wrong recruitment decisions, and loss of ability in a short period of time.

Bayraktar and Ataç352
ERP soware, preferred by many companies, will leave their place to ana-
lytical tools that enable better measurement and decision-making on human-
induced issues that run through the cloud. Technological systems will be used
to evaluate employees. e storage of information on the cloud and the use of
mobile technologies will bring new privacy policies and risks. In addition, the
HR will need to tackle problems with information security and intellectual prop-
erty rights (www.turkishtimedergi.com 2016).
Working Environments
With Industry 4.0, the Y and Z generations will feel the power. In the oces
where these generations work intensively, common working areas such as cor-
ners and cafes that will support the use of the latest technology and individual
work will be preferred. It will increase the number of companies that use of-
ce designs to make oce work attractive. To attract large companies, young
entrepreneurs and equipped young people to their companies, they are devel-
oping oce designs using new systems in business environments.
In a social sense, a completely dierent working routine will emerge. e
9am–5pm shi is going to be a working concept that is not constrained by space,
and time will be very exible working away from the understanding of work.
Companies that prefer oce design to work with exible hours will multiply
(www.turkishtimedergi.com 2016).
Social Media
With social media, everything will go through a more transparent structure.
Social media channels will evolve into a democratic platform where information
workers can participate at all levels, from complaints or pleasures of customers
to employees’ side rights, working hours, or interactions with each other. e
democratization of work will take the institution away from the hierarchy to
a more horizontal organization. Employees can be eective in communicating
with each other, producing solutions. is interaction will make people more
proactive in making observations and taking responsibility for their work. is
new order will be organizational and will change job descriptions from the root
(Laleli 2017).
Business and Life Balance
Human resources should identify ways to improve the health and interaction
of employees as well as work and life balance. Are your employees healthy? Do
they have the habits and knowledge to make them energetic? Are the managers

e Eects of Industry 4.0 353
helping them focus? Do they have the skills to do their jobs? Can they spare time
for their friends and family? Do you have time for the hobbies? ey should ask
their questions.
Without discrimination, whether large or small, human resources departments
in all companies need to incorporate factors such as undertaking the role of
“helping people improve their performance”, recreation rooms, sports programs,
and job quality enhancement programs (Laleli 2017). (Lalei 2017).
Status of Businesses Prepared for Industry 4.0
is research covers four industrial operations operating in Bursa. ree of the
businesses are foreign capital. Two of the interviewed rms are textiles, both
operating in the eld of technology. e number of employees working in the
company ranges from 900 to 1500. Negotiations were held in May 2017 with
interviews with managers of the human resources and managers responsible for
technology, and interviews were conducted in the factory. Demographic infor-
mation on the interviewed enterprises is given in Tab. 2.
e following four questions were basically directed to business managers:
1. What are the general challenges businesses are facing in the environment that
Industries 4.0 brings?
2. How do you anticipate how these challenges will aect current and future
business and business processes?
Tab. 2: Demographic Information Related to Interviewed Operations
Company A B C D
Respondent HR Manager HR Manager HR Manager HR Manager
Position seniority/
Workplace seniority
12/12 26/19 6/20 5/28
Sector Industry
automation
Textile Textile Machine
production/
Industry
automation
Capital Structure Foreign Foreign Foreign Domestic
Age of Business 42 50 65 60
Number of Employees 1000 900 1500 1100
White Collar 200 175 300 250
Blue Collar 800 725 1200 850

Bayraktar and Ataç354
3. What are the core competencies that employees must have to fulll their posi-
tion in the current or future business?
4. Do you have any initiatives that you have developed as a business in this area?
e answers given by the enterprises to the questions are shown in Tab. 3.
Results
In response to the question “What are the general challenges that businesses
will face in the environment created by Industries 4.0?” the work structure will
become technologically more complicated, which will increase the demand
for high-qualied sta, but it will be dicult to nd and retain these qualities,
whereas some of the low-quality sta will lose their jobs. e need for existing
selection methods to be inadequate in the future and the need to organize adap-
tation programs to support existing employees in their adaptation to the new
situation are emphases on direct human resources processes.
e answers to the question “How do you anticipate how these challenges will
aect your current and future jobs and business processes?” emphasized that the
role of consulting rms will become more prominent when it comes to achieving
talent. Management directors seem to have agreed on the need for the public to
make signicant innovations in education in the new period.
e answers to the question “What are the basic competencies that employees
must have to fulll their current or future business?” show that the areas of
common emphasis are information technology, communication skills, problem
solving, and process skills.
In response to our question, “Do you have any initiatives to develop this
eld as a business?” it seems that every business is prepared for this. Programs
related to Industry 4.0 are carried out centrally in foreign capital enterprises.
Responsible persons have been identied and appointed in each business.
Conclusion and Evaluation
is study focuses on the theoretical background, the eld research, and the
working environment that Industry 4.0 will emerge in industrial enterprises
and the possible eects of this environment on the human resources processes.
Although the development of industry and technology in a country is realized
by the innovation capability and performance of the enterprises, the fact that it
can be achieved by the ecosystem approach requires a very wide participation
including the public sector. It is unthinkable for the public to be indierent to

e Eects of Industry 4.0 355
(continued on next page)
Tab. 3: Responses of Business Managers to Interview Questions
Question Answer
What are
the general
challenges
businesses are
facing in the
environment
that Industries
4.0 brings?
A. Company. e rise of technology will lead to a decrease in the number
of blue collar workers. Employment will shi to a sta that is competent and
skilled. ose who cannot use the technology will be the problem of adaptation
of the X generation, and those sta who cannot renew themselves will be
exported from their workplaces. It will be dicult to resume the exported talent
and adapt to the companies.
Managing the workforce centrally increases costs. e cost of a sta member
working in Istanbul at my company is 1.5 times higher than Bursa. With
digitization, the built-in labor force will cost less. It is important for companies
to conduct cost-benet analyses.
B. Company. Ithink we will have the problem of retaining the qualied
workforce to nd a qualied workforce. For this reason, our company has
diversied its motivation tools. We have actively involved our diversity team
in the HR processes to manage diversity. In this way, Ithink that we can reach
many human resources and make a dierence.
C. Company. e competencies of human power in the existing structure will
not be enough. e development and exchange programs need to be prepared
and implemented on the blue and white sides. Global human resources will
be needed. We have the risk of losing employees who are working hard with
digitization. Ithink this could harm the economy of the country. It will be
dicult to nd highly qualied employees. e selection methods available will
not suce.
D. Com pan y. Employment will vary. While the highly skilled workforce will
have a 5%–10% increase in employment, the collar workforce will be in the
same blue reduction. In this case it will cause unemployment. Orientation
programs will need to be prepared for the adaptation of the new workforce to
the company. Diversication of motivational actions and new proposal and
reward systems will have to be put into eect. Implementation of a structured
training development process is required. e consolidation of your abilities
and the retention of these abilities will become an essential necessity.
It is necessary for the public administration to determine some laws and policies
to pass the Industry 4.0 process. It should support this through training and
incentive processes. Otherwise, it is not possible to capture the Industry 4.0. We
cannot go beyond a system that we learn from global companies.
How do you
anticipate
how these
challenges will
aect current
and future
business
and business
processes?
A. Company. e state needs to change its policies. Asuccessful path cannot
be pursued if the state policy does not own the Industry 4.0. Education is
something that needs improvement at the beginning. ere is a need for reform
from primary education.
B. Company. Regrettably, the current education system (including vocational
high schools) is not enough to train qualied labor force. It is very dicult for
us to get rid of assemblage and labor-intensive work if there is no education
reform starting from the vocational high school.

Bayraktar and Ataç356
Tab. 3: (continued)
Question Answer
C. Company. Managing human resources processes will be very dicult. With
digitization, it will be dicult to manage people and technology together. It
will be dicult to keep the talent in the company. Standard practices will bring
diculties to employees. ey will ask for exibility during their stay. e state’s
rules and harmonization process will force companies. Concurrently companies
will be forced.
D. Com pan y. e expected qualication from the workers will change
with Industry 4.0. e jobs that are simple, self-repetitive standard tasks
will be replaced with a structure that can decide in complex situations, take
visualization and action, and attach importance to preventive care. It will be
dicult to nd and manage talent. Consultants and supplier companies will be
serious players.
What are
the core
competencies
that employees
must have to
fulll their
position in
the current
or future
business?
A. Company. Information technologies; technical skills; communication skills
B. Company. Technological skills; problem-solving competencies; process
skills; analytical skills.
C. Company. Technical skills; innovation; change; technological capabilities;
strong communication skill.
D. Company. Cognitive exibility; problem-solving; creativity; coordination;
emotional intelligence; to think right and to decide; service centrality;
compromise; people management.
Do you have
any initiatives
that you have
developed as
a business in
this area?
A. Company. Our company has accepted the “technology for life” approach.
Currently, we run more than 50 projects. In a project in our factory in
Germany, people live and learn how to work in high-tech equipment and how
products interact with each other. e machines are told which product to
produce next. More than one product can be produced on the same line. With
the RFID (radio frequency identication system) system, the status of the
products can be monitored at any time. Technicians can see the instruction
manuals in their glasses and use their hands freely. In case of any malfunction,
the robots give the knowledge of the service. e aim of this project is to
optimize production transport networks by bringing together information
technology and production automation through the internet. Asimilar model
is applied to our Bursa plant. Aperson in charge of Industry 4.0 has been
assigned. is person is collecting data and improving the process. en the
project will be spread to all our companies in Turkey. It is imperative that we all
have this change ready.
B. Company. We have just started outsourcing work on digitization. So what
we will do in this area will be planned in the coming period and roadmap will
be drawn. e very active use of HR analytics now is important. is process,
which is carried out globally, is also about to settle in Turkey. Many data will
be used to improve processes. is year’s motto “digitization” is that we are all
excited to keep up with this shi.

e Eects of Industry 4.0 357
Tab. 3: (continued)
this issue, as industrial production aects both the economy and employment.
Germany and China are the most striking examples of this.
e aim of this research is to clarify the state of opinion, expectation, and
preparedness about how the Industrial Industry transformation in the industry
will aect the processes of human resources. e information we receive from
business managers shows that every business is prepared for the new business
environment that this process will bring, and that they have developed initiatives
and measures. e common opinion of business managers is that some of the
low-qualied employees will lose their jobs, so some people in this group will
lose their jobs, while Industry 4.0 will aect employees based on expected skills
and skill proles, resulting in higher demand for high-qualied employees.
e most important condition of sustainable competitive power is investing
in technology. Staying behind the global economy will make competition almost
impossible. e country, the companies, the machines, and the employees have
to increase their capabilities in line with Industry 4.0.
Industry 4.0 will change the daily lifestyles of communities and all the habits
of business life. is change will have to keep pace with states, societies, compa-
nies, and employees. ose who cannot catch up with change will face the risk of
economic disappearance.
e research was carried out in the Bursa region and only on four enterprises.
It is not possible to generalize the results obtained in this direction. However,
it can be said that three of the interviewed companies are multinational
corporations and the results are considerable in terms of human resources when
considering the number of people they work with. Aresearch that will cover
Question Answer
C. Company. We divided the IT department into two and turned it into a unit
working with Industry 4.0. Pilot applications in production have already begun.
D. Com pan y. We want our company to become a factory of future technology.
We want to adapt our current conditions to the future with energy, ecient
production lines with high exibility, an optimized workow of information
and materials, ecient energy network for building and production processes,
and a practical and integrated training factory.
We want to optimize logistics and material ow, optimize inventories, produce
without bottlenecks, and incorporate suppliers into the production process.
We want to monitor and restore corrective measures with production cameras,
sensors, RFIDs, and barcodes, to minimize energy consumption. We are
working on an Industry 4.0 team for this and a computer engineer responsible
for operations.

Bayraktar and Ataç358
dierent geographical regions and larger numbers of businesses will undoubt-
edly reveal the expectations in this area more reliably.
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