Executives’ plans for redesigning their organizations to compete in a digital age do not effectively fold HR into the strategic process
HR leaders juggling gap between demanding C-suite and employee expectations in a rapidly changing workplace
Mumbai, March 20, 2017
As the competition for talent continues to rise and business models are disrupted by technology and socio-demographic shifts, organizations are still taking an evolutionary approach to their talent strategies in the face of revolutionary changes. According to Mercer’s 2017 Global Talent Trends Study, the majority of organizations surveyed in India (83%) report they are planning to redesign their structure in the next two years, yet only 11% of business executives say their organization is “change agile” – although this is higher than the global average of just 4%.
"In a world dominated by technological and digital disruption, to be seen as a strategic partner, HR will have to play an anchoring role in enhancing the organization's change agility. And HR can lead the way in becoming more agile by, having a much stronger pulse on the needs of its two key stakeholders - both business leaders and employees, and leveraging these insights for prioritizing changes that matter," said Shanthi Naresh, India Business Leader - Talent Consulting and Information Solutions, Mercer.
Mercer’s study shares insights from over 7,500 perspectives globally, 461 of these in India, and compares the views of senior business executives, HR leaders, and employees from organizations around the world. The report assesses significant gaps in alignment, identifies several critical disconnects concerning change, and makes recommendations to capture growth.
Most notably, despite organizations’ plans to transform, HR leaders do not have organization or job redesign on their list of priorities for 2017. In fact, the top priorities of HR leaders – specifically building skills across the workforce, identifying high potentials, developing leaders for succession, and attracting top talent externally – reflect the priority of evolving employee capabilities, but may not align with executive’s goals for more substantial workplace change (see Figure 1).
Additionally, while HR leaders express confidence in the talent management processes they have in place (80%), employees are still looking elsewhere for new opportunities. Over half (54%) of employees say they plan to leave their current role in the next 12 months, even though they are satisfied in their jobs – which is more than in any other country surveyed. Equally concerning is that those employees not planning to leave their current roles report they are less “energized” in terms of bringing their authentic selves to work and therefore, less likely to thrive in a collaborative and innovative workplace. Moreover, business executives view talent scarcity more acutely than HR professionals, with 78% expecting a significant increase in competition compared to 59%, respectively.
“In an age where digitization, robotics, and AI are wreaking havoc with traditional business models, it is easy for executives to focus on superior technology as the solution to ensuring the competitiveness of their organizations and to overlook the human element,” said Ilya Bonic, President of Mercer’s Career business. “Growth rests on engaging and empowering today’s workforce in ways that we are just beginning to uncover. It takes employees armed with the right skills and opportunities to develop innovative solutions to advance the business and themselves.”
“Organizations need to prioritize a culture of agility to stay ahead of rapidly changing market trends,” said Kate Bravery, Global Leader for Mercer’s Career business. “Those employers that empower their workforce – by helping them plan for the unknown, mitigate risk, and thrive at work – will be more successful in building a responsive and successful organization.”
What is not on the HR agenda for 2017 demonstrates misalignment and perhaps missed opportunities to leverage what employees report as important:
Health over Wealth – Despite 53% of employees ranking their health as more important than their wealth or career, and 64% indicating they expect their workplace to become more focused on employee health in the next few years, health and wellbeing ranked in the bottom half HR leaders’ list of top talent management priorities this year. “Navigating the changing talent ecosystem by redesigning future roles and supporting employees’ health and wealth needs is already becoming a market differentiator,” said Mr. Bonic.
Wealth over Career – While the majority (94%) of employees reported that they want to be recognized and rewarded for contributions beyond the organization’s financial results and activity metrics, three-quarters(75%) think their company does this well. Fair and competitive compensation ranked in the top 5 (#4) when asked what would make a positive impact on their work situation, yet rewards ranked near the bottom of priorities for HR leaders (#7) (see Figure 2).
Gig Is Big – Flexible work arrangements are important to employees, with over two thirds reporting that both their direct manager and company leaders are supportive of it (73% and 70%, respectively). Nevertheless, 41% of employees believe working remotely or part-time can adversely impact promotional opportunities. And while nearly three-quarters (70%) of full-time employees would consider working on a contingent or contract basis, neither business executives nor HR leaders have embraced these new forms of employment as much as expected or desired. Both the C-suite and HR leaders agree that they do not expect the “gig economy” to have a major impact on their business in the next two years. “It’s a risk for any organization to ignore opportunities for people to work more independently,” said Ms. Bravery. “Those companies that find ways to leverage a more fluid workforce will harness growth and outpace the competition.”
A Relevant Experience – Beyond flexibility, personalization is essential for creating an experience that resonates with employees. While three-quarters (76%) of employees say that their company understands their unique interests and skills, 58% still want their company to increase this understanding and help them invest in themselves. “Employees are increasingly bringing a consumer expectation to the workplace since it is how they engage in almost every aspect of their lives,” said Ms. Bravery. “It creates an authentic environment in which employees can excel. When done right, it does not feel like personalization – it just feels like a great experience.”
Digital Divide – Business executives (83%) believe technology at work, including automation, robotics, machine learning, and wearables, is the workforce trend likely to have the most impact on their organizations in the next two years; and HR professions agree (74%). Moreover there are still improvements to be made to the employee digital HR experience: with less than a third (30%) of employees being able to do more than basic HR tasks (book time-off, etc.) digitally.
“Despite the desire to cling to more traditional methods, the landscape for the workplace, the workforce, and the future of work are changing too quickly and drastically to do so,” said Ms. Bravery. “To stay competitive, it is imperative that business executives and HR leaders collaborate and that organizations take new approaches to how employees access knowledge, adapt to technology, manage, communicate, and leverage their careers.”
Mercer’s 2017 Global Talent Trends Study, which examines the top trends impacting today’s workforce and how organizations are responding, uncovered four trends that are shaping the outlook for this year: Growth by design: The C-suite’s change agenda to drive growth, The quest for insight: Analytics will be a key player in winning the war for talent, A shift in what we value: Recognizing what matters most to employees, and A workplace for me: Continued focus on personalization and flexibility. The study is based on the input of more than 1,700 HR professionals, 5,400 employees, and 400 business executives from 15 countries and 20 industry sectors.
For more information or to download the full report, visit http://www.mercer.com/our-thinking/global-talent-hr-trends.html.
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and careers of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With annual revenue of $13 billion and 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.