HR must prove its worth or risk being sidelined
The business world is going to change drastically in the next decade and HR professionals need to figure out how to make themselves relevant in the future or risk being pushed aside, according to a report from PricewaterhouseCoopers (PwC) in the United Kingdom.
In examining what the world of work might look like in 2020, PwC found there is significant opportunity for the HR function to become one of the most powerful parts of the business. But if HR doesn’t step up, the function could be almost completely outsourced or absorbed by other departments, according to the report Managing Tomorrow’s People: The Future of Work to 2020.
Previous PwC surveys of chief executive officers found they are increasingly focused on the people agenda. But CEOs also worry HR is not equipped to do what the CEOs want, said Michael Rendell, partner and leader of human resource services for PwC in London.
There are several steps HR professionals can take to ensure they deliver and help organizations thrive. The first is to understand the business in which they’re operating, said Rendell.
“Without that kind of knowledge, that kind of relevance to the business, they are hopelessly at sea when it comes to talking about what’s the people impact of the particular things the organization is trying to do,” he said.
HR also needs to use metrics that show the link between talent and profits to prove the department’s value to the executive team.
“The HR function needs to become more relevant again and the only way to do that is to link into the planning process and really understand what it needs to evolve to and then start measuring its effectiveness,” said Ellen Corkery-Dooher, partner in PwC Canada’s advisory services practice.
Three possible worlds
Knowing where the business is going is crucial for HR because the people they recruit today and the programs they put in place will shape the business of the future, said Rendell. To help them better predict the evolution of their business, Managing Tomorrow’s People gives HR professionals a glimpse into three possible worlds of work in 2020.
Blue World: Large corporations turn into mini-states and take on a prominent role in society.
Orange World: The focus is on specialization and the rise of collaborative networks of workers.
Green World: The environmental agenda drives the business strategy.
Most likely all three worlds will co-exist in some form, with aspects of one becoming more prominent in certain regions or sectors, said Rendell
“I think we’ll see a world that has a blend of the different characteristics of the different worlds,” he said.
The Blue World
In the Blue World model, corporations will lock in the best talent by providing employees with benefits such as housing, health care and tuition. But despite these perks, top talent will still be hard to find and senior executives will use personal agents to seek out the best deals. Young people will be profiled at age 16 and most of the top talent will be linked to an organization, which will pay for their education, by the age of 18.
This kind of link between corporations and education can be seen today, said Rendell. For example, one automotive manufacturer in the U.K. couldn’t find enough qualified graduates so it started its own university.
“Increasingly we’re seeing, especially in the U.K., academies and schools that are sponsored by and set up by particular employers,” he said.
In the Blue World, the people and performance model is the closest to what many companies aspire to today, linking HR interventions to business performance and using human capital metrics to evaluate corporate activity.
In this world, individuals will have long careers with a single employer and corporations will have a lot of control over employees, at work and at home.
“The question is, how much freedom are people prepared to trade for a certainty about a future?” asked Rendell.
There is already a clear desire among the younger generation for stability and regularity, according to a PwC survey of 2,739 graduates from China, the United States and the U.K. More than three-quarters (78.4 per cent) expect they’ll have just two to five employers throughout their career.
And while 74 per cent of respondents believe they’ll work from a mix of locations (home and office), 75 per cent expect to work regular office hours. Despite that result, employers shouldn’t abandon their move toward more flexible workplaces, said Rendell.
“Flexibility in the working environment is a critical element of attracting and retaining the best people,” he said, adding new graduates probably need to work for a few years before they truly value flexibility.
The Orange World
The Orange World is the diametric opposite of the Blue World. In this world, networks will prosper while large companies fall. Trade barriers will be non-existent and the global village will become a global network of small, linked communities.
In this world, individuals will develop specialized portfolio careers, usually working on a short-term, contract basis. They will join craft guilds that manage career opportunities and provide development opportunities, medical insurance and pensions.
Within organizations, the people strategy will be replaced with a sourcing strategy to maintain an optimum supply of people and HR will work with expertise networks and guilds to attract the talent the organization needs.
The Green World
In the Green World, consumers will demand ethics and environmental credentials, forcing companies to develop a social conscience. Audits and quarterly reports will include a measurement of greenness and companies that fail to meet government regulations will be penalized.
In this world, HR will play a critical role in developing the corporate social responsibility program to recruit new graduates who are looking for socially responsible employers.
This is something graduates are already looking for today, according to PwC’s graduate survey. Nearly nine in 10 respondents (86.9 per cent) said they would deliberately seek out an employer with corporate responsibility behaviour that reflects their own values. Unfortunately, businesses have been slow to catch on, said Rendell.
“I’m not sure that message has got through yet to the boardrooms,” he said.
Employers in the Green World will also take a holistic approach to learning, with secondments and paid sabbaticals to work on worthy causes becoming common. This is something young workers are already looking for, according to the PwC survey. Nearly all of the survey respondents (93.9 per cent) expect to work across more geographic borders than their parents did.
“There’s a real expectation for mobility,” said Corkery-Dooher in Canada. Usually this is reserved for more experienced employees, but relocation is becoming more important to people early in their careers.
“That’s viewed as a real incentive to work somewhere,” she said.
While it’s hard to predict what the working world will look like in 2020, the most important thing for employers today is to be adaptable, said Rendell.
“The key for me is flexibility in the way employers recruit, retain and develop their people,” he said.
In examining what the world of work might look like in 2020, PwC found there is significant opportunity for the HR function to become one of the most powerful parts of the business. But if HR doesn’t step up, the function could be almost completely outsourced or absorbed by other departments, according to the report Managing Tomorrow’s People: The Future of Work to 2020.
Previous PwC surveys of chief executive officers found they are increasingly focused on the people agenda. But CEOs also worry HR is not equipped to do what the CEOs want, said Michael Rendell, partner and leader of human resource services for PwC in London.
There are several steps HR professionals can take to ensure they deliver and help organizations thrive. The first is to understand the business in which they’re operating, said Rendell.
“Without that kind of knowledge, that kind of relevance to the business, they are hopelessly at sea when it comes to talking about what’s the people impact of the particular things the organization is trying to do,” he said.
HR also needs to use metrics that show the link between talent and profits to prove the department’s value to the executive team.
“The HR function needs to become more relevant again and the only way to do that is to link into the planning process and really understand what it needs to evolve to and then start measuring its effectiveness,” said Ellen Corkery-Dooher, partner in PwC Canada’s advisory services practice.
Three possible worlds
Knowing where the business is going is crucial for HR because the people they recruit today and the programs they put in place will shape the business of the future, said Rendell. To help them better predict the evolution of their business, Managing Tomorrow’s People gives HR professionals a glimpse into three possible worlds of work in 2020.
Blue World: Large corporations turn into mini-states and take on a prominent role in society.
Orange World: The focus is on specialization and the rise of collaborative networks of workers.
Green World: The environmental agenda drives the business strategy.
Most likely all three worlds will co-exist in some form, with aspects of one becoming more prominent in certain regions or sectors, said Rendell
“I think we’ll see a world that has a blend of the different characteristics of the different worlds,” he said.
The Blue World
In the Blue World model, corporations will lock in the best talent by providing employees with benefits such as housing, health care and tuition. But despite these perks, top talent will still be hard to find and senior executives will use personal agents to seek out the best deals. Young people will be profiled at age 16 and most of the top talent will be linked to an organization, which will pay for their education, by the age of 18.
This kind of link between corporations and education can be seen today, said Rendell. For example, one automotive manufacturer in the U.K. couldn’t find enough qualified graduates so it started its own university.
“Increasingly we’re seeing, especially in the U.K., academies and schools that are sponsored by and set up by particular employers,” he said.
In the Blue World, the people and performance model is the closest to what many companies aspire to today, linking HR interventions to business performance and using human capital metrics to evaluate corporate activity.
In this world, individuals will have long careers with a single employer and corporations will have a lot of control over employees, at work and at home.
“The question is, how much freedom are people prepared to trade for a certainty about a future?” asked Rendell.
There is already a clear desire among the younger generation for stability and regularity, according to a PwC survey of 2,739 graduates from China, the United States and the U.K. More than three-quarters (78.4 per cent) expect they’ll have just two to five employers throughout their career.
And while 74 per cent of respondents believe they’ll work from a mix of locations (home and office), 75 per cent expect to work regular office hours. Despite that result, employers shouldn’t abandon their move toward more flexible workplaces, said Rendell.
“Flexibility in the working environment is a critical element of attracting and retaining the best people,” he said, adding new graduates probably need to work for a few years before they truly value flexibility.
The Orange World
The Orange World is the diametric opposite of the Blue World. In this world, networks will prosper while large companies fall. Trade barriers will be non-existent and the global village will become a global network of small, linked communities.
In this world, individuals will develop specialized portfolio careers, usually working on a short-term, contract basis. They will join craft guilds that manage career opportunities and provide development opportunities, medical insurance and pensions.
Within organizations, the people strategy will be replaced with a sourcing strategy to maintain an optimum supply of people and HR will work with expertise networks and guilds to attract the talent the organization needs.
The Green World
In the Green World, consumers will demand ethics and environmental credentials, forcing companies to develop a social conscience. Audits and quarterly reports will include a measurement of greenness and companies that fail to meet government regulations will be penalized.
In this world, HR will play a critical role in developing the corporate social responsibility program to recruit new graduates who are looking for socially responsible employers.
This is something graduates are already looking for today, according to PwC’s graduate survey. Nearly nine in 10 respondents (86.9 per cent) said they would deliberately seek out an employer with corporate responsibility behaviour that reflects their own values. Unfortunately, businesses have been slow to catch on, said Rendell.
“I’m not sure that message has got through yet to the boardrooms,” he said.
Employers in the Green World will also take a holistic approach to learning, with secondments and paid sabbaticals to work on worthy causes becoming common. This is something young workers are already looking for, according to the PwC survey. Nearly all of the survey respondents (93.9 per cent) expect to work across more geographic borders than their parents did.
“There’s a real expectation for mobility,” said Corkery-Dooher in Canada. Usually this is reserved for more experienced employees, but relocation is becoming more important to people early in their careers.
“That’s viewed as a real incentive to work somewhere,” she said.
While it’s hard to predict what the working world will look like in 2020, the most important thing for employers today is to be adaptable, said Rendell.
“The key for me is flexibility in the way employers recruit, retain and develop their people,” he said.
