New rules for HR in the digital age!
For HR, these are testing times - from expectations, execution, purpose and knowledge, every piece of conventional wisdom in this sector is either being tested or is well on its way to get updated. However, addressing the challenges pertaining to workforce, talent, learning, automation and technology often deprive us of fully understanding the overarching changes that are gaining a feverish pace in the domain. Deloitte’s 5th Annual Global Human Capital Trends Report and Survey does precisely that, and paints a picture that helps in comprehending the big trends – prevalent and upcoming – in HR, what to expect in the future, and how to best adapt accordingly.
The report “Rewriting the Rules for the Digital Age” takes into account the inputs of over 10,400 HR and Business leaders from 140 countries and discusses technology, analytics, digital tools, automation, and the future of work extensively. Findings from the survey and expert opinions are segregated into ten relevant trends, which cover diverse domains like leadership, Artificial-Intelligence (AI), People Analytics, Learning and Development (L&D), Talent Acquisition (TA), and diversity among others.
The report reveals that talking about the future of workplace and work is indispensable today because the “way high-performing organizations operate today is radically different from how they operated 10 years ago. Yet many other organizations continue to operate according to industrial age models that are 100 years old or more, weighed down by legacy practices, systems, and behavior that must be confronted and discarded before true change can take hold.” It says that as traditional hierarchies are redefined, the question “For whom do you work?” has been replaced by “With whom do you work?” The findings are supported by the fact that 88percent of the respondents of the survey believed that building the organization of the future is an important or very important issue, and the percentage who viewed it as very important increased 3 percent from last year. However, only 11 percent of the respondents were of the view that they understood how to build the organization of the future. Another aspect of the future that the report mentions is the future of work and the increase of augmented workforce. The report mentions that aided by connectivity and cognitive technology, the nature of work is changing and that AI systems, robotics, and cognitive tools will reinvent jobs and role, which will force organizations to reconsider how they design jobs, organize work and plan for growth. 41 percent of the organizations that participated in the survey reported to fully implementing or making significant progress in adopting cognitive and AI technologies, and another 34 percent said they were in the midst of a pilot, however, a meager 17 percent admitted to being ready to manage a workforce with people, robots and AI working side by side – the lowest since the inception of the study.
Leveraging technology & data
The focus on the ‘digital’ aspect of work will only increase and HR is being asked to spearhead this transformation, which will change the interaction with the workforce and the workplace, the report says. It states that:
HR leaders are being pushed to take on a larger role in helping to drive the organization to ‘be digital,’ not just ‘do digital”.
The writing is on the wall, as 56 percent of the companies surveyed said that they are redesigning their HR programs to leverage digital and mobile tools, 51 percent are currently in the process of redesigning their organizations for digital business models, 33 percent of surveyed HR teams are using some form of AI technology to deliver HR solutions, and 41 percent are actively building mobile apps to deliver HR services. Furthermore, the rapid adoption of cloud HR systems means that data will be used extensively for workforce planning, talent management and operational improvement. The analytics of engagement and learning will offer solutions to several challenges, and go as far as enabling organizations to conduct real-time analytics at the point of need in the business process. While 71 percent of the organizations viewed people analytics as a high priority, the adoption has been slow. Recruitment, followed by performance measurement, compensation, workforce planning and retention remained the top challenges that people analytics catered to, but performing predictive analytics, and deploying enterprise scorecards barely changed from last year. Additionally, only 8 percent admit that they have usable data, and only 9 percent believe that they have a good understanding of which talent dimensions drive performance in their organizations; and only 15 percent have broadly deployed HR and talent scorecards for line managers.
The new-age employee
The report notes that the notion and concept of “career” has witnessed a monumental change, the biggest outcome of which has organizations re-strategizing their management of careers and delivering L&D opportunities. Although most organizations are in the nascent stage of this transformation, technology-aided learning has witnessed widespread adoption.
However, despite identifying this upheaval in learning and careers, the capability of organizations to keep up with employees’ demands for learning and career growth has dropped 5 percent.
“To keep pace with these changes, Chief Learning Officers (CLOs) must now become the catalysts for next-generation careers while also thinking about how to support the overall growth of the business.” The report also takes cognizance of the challenges faced by the talent acquisition executives and recruiters, as careers and career models are evolving, and there is a dearth of talent to meet the demand. Notably, attracting the right talent is no longer just an HR function, and has become a business challenge. 83 percent of the executives surveyed stated that TA is important or very important; and in India this figure was the highest at 89 percent. Furthermore, using social and cognitive technologies, integrating video and gamification-based with screening processes and using referrals are discussed in the report.
Diversity and inclusion too has been identified as another essential trend, and is described as an important ingredient for enhancing employee engagement, improve brand value and drive performance. “The era of diversity as a “check in the box” initiative owned by HR is over.” This is evident from the fact that the proportion of executives who cited inclusion as a top priority has risen by 32 percent as compared to 2014; 69 percent rate diversity and inclusion as an important issue (up 59 percent since 2014) and 38 percent say that the primary sponsor of company’s diversity and inclusion efforts is the CEO. The Indian percentage of respondents who voted inclusion and diversity as important or very important stood at 78 percent.
Employee experience & Performance Management
Organizations are integrating several different aspects of the employee experience, and using feedback tools, wellness and fitness apps, integrated employee self-service tools in helping HR and management understand, design, and improve the experience. Creating a journey and experience that satisfies an employee is increasingly become a strong priority, but not everyone is able to hit the nail on the head. Although about 80 percent of the respondents (Indian figure is 89 percent) rated employee experience as important or very important, only 22 percent said that their organizations were excellent at building a differentiated employee experience. Additionally, 59 percent stated that they were not ready or only somewhat ready to address the employee experience challenge. The very next trend that follows this pertains to performance management practices, and states that new practices are becoming transparent and standardized. The realignment and redesign of traditional practices has included agile goal management, continuous feedback, check-ins, and adoption of new models of evaluation and rewards. 79 percent of those surveyed viewed redesigning of performance management systems as a high priority as opposed to 71 percent from three years ago, and organizations are 10 percent more capable than they were in 2015 to implement performance management. 90 percent of the companies that have redesigned performance management see direct improvement in engagement, 96 percent admit that processes have become simpler, and 83 percent say that the quality of conversation between employees and managers is going up.
The report also analyses the leadership challenges that organization around the world are facing owing to shifting paradigms and new priorities. It says, “High-performing leaders today need different skills and expertise than in generations past, yet most organizations have not moved rapidly enough to develop digital leaders, promote young leaders, and build new leadership models.” According to the results of the survey, the organizational capability to address leadership has dropped 2 percent, despite 42 percent of the companies viewing ‘leadership development’ as very important.
The report is a call for all HR and business leaders to sit up, take notice and contextualize the rapid changes taking place in the HR domain, and what they need to do in order to prevent redundancies. Furthermore, organizations struggling to come to terms with the stated changes, or identifying a starting-point to jump on the wagon have also been offered practical ‘Start-here’ tips to realign their goals, vision and processes. The report has rich and informative data, which upon careful inspection can provide insights on how the HR community is changing, and how to make the best sense of this change.