But is human resources up to the task?
When it comes to the workplace five years from now, employers — and human resources in particular — are going to have to make improvements when it comes to issues such as strategic workforce planning, generational differences and leadership and skills gaps, according to a global survey from Oxford Economics.
“These numbers are about the aggregated human sentiment of thousands of people,” said Ed Cone, managing editor and senior analyst for Oxford Economics’ thought leadership team in New York. “That can get a little messy but that messiness is what makes the HR function so powerful and it’s also what makes it kind of hard sometimes.”
Strategic challenges
HR’s strategic — or lack of strategic — role is a continuing issue, found Oxford, which surveyed 100 executive and 100 non-executive employees in each of 27 countries. One-half of the executives surveyed were in an HR capacity.
Fifty-two per cent of the executives said workforce issues drive strategy at the board level while 28 per cent said HR advises the C-suite but does not have a voice in decision-making. One-third (31 per cent) said HR works with the C-suite to make strategic decisions about the business while 26 per cent said HR is not consulted at all about business planning and 24 per cent said workforce issues are an afterthought in business planning.
“As we get more granular, the numbers are just depressing,” said Cone in a webinar about the survey. “(These are) not very encouraging numbers there in terms of HR’s role.”
In trying to explain why, Cone said one respondent told him: “We can’t make the case. When we do have access, we don’t know how to make the case to the board to get the funding and the focus we need.”
That’s because HR doesn’t know enough about its own work, he said. Just 39 per cent of executives said they have ample data about the workforce while 38 per cent said they use quantifiable metrics and benchmarking as part of a workforce development strategy. And 42 per cent said they know how to extract “meaningful insights” from the data available, found the survey.
“HR’s got a long way to go in terms of the tools and techniques to understand what’s going on,” said Cone. “There’s this opacity, this lack of clarity into the workforce itself by HR.”
It’s like a business is blindfolded, said Nick Potts, practice area leader of HCM in the cloud at IBM Europe in London, U.K., who was also in the webinar.
“Sixty per cent of a business’ costs are related to its people and it doesn’t know how it’s using that, how it’s making money, where those people are coming from, how it’s developing them, where the skills will come from in the future. It’s the blind leading the blind at that point and… there’s a real potential for businesses to suddenly be in significant trouble.”
There’s no question HR has to be “datafied,” said Kara Walsh, senior vice-president and head of HR for middle central and eastern Europe at SAP in Walldorf, Germany, who was also in the webinar.
“But there’s also another issue here as well — it’s that we need to educate the business to expect more from HR… I don’t believe that every business actually knows what HR could be and that’s where the struggle is, that’s where we’re at a crossroads,” she said.
“And some of them get it, some of them never will, to be very honest with you, and some can be convinced. That’s the challenge, actually — we’re still caught up in this activity trap, with operational tasks, instead of having the space and the freedom to be able to innovate.”
Millennial misunderstanding
Despite what we’ve been hearing, differences between millennials and non-millennials are slight, found the survey. Both groups want competitive compensation (64 per cent of non-millennials compared to 68 per cent of millennials), bonuses and merit-based rewards (56 per cent versus 55 per cent), supplemental training programs (43 per cent versus 45 per cent), flexible work locations (46 per cent versus 43 per cent), up-to-date technology (42 per cent versus 40 per cent) and access to social media at work (37 per cent versus 36 per cent).
“We are not arguing that all of these articles and books and think pieces and blog posts you have seen saying that millennials are different are entirely wrong, we just think they’re maybe a little overblown and certainly off-base,” said Cone.
“Every generation or cohort is different in some way — we grew up with different tools, we grew up in a slightly different culture. I think there’s a huge exaggeration of generational differences… People, once they’re in the workforce, want similar things.”
It can be misleading to box people in, said Walsh, and it should be more about how the work world has changed, with globalization and technology accelerating.
“It’s more about diversity and how you work together and how you break down silos, how you share information, how we use technology to reach all people all over the world… and the kind of leadership we’re going to need actually to meet this very diverse, multi-generational workforce.”
The leadership cliff
But gaps are evident when it comes to leadership capabilities, found Oxford Economics. Fifty-two per cent of executives said their leadership has the skills to effectively manage talent; 51 per cent said their leaders know how to inspire and empower employees; 47 per cent said their leaders are prepared to lead a global workforce; 44 per cent said their leaders are able to drive and effectively manage change; and just 34 per cent said their leaders are prepared to lead a diverse workforce.
“We see companies heading over a cliff because the leadership isn’t there,” said Cone. “We really see this as an issue that’s going to have big repercussions for business and that business had better get it right in terms of training their people from the ranks.”
SAP may not have prioritized it enough in the past, but the company is now in an accelerated mode, fast-tracking employees and rounding them out, said Walsh.
“We’re looking at rotation programs, putting them on challenging assignments, social sabbaticals… education programs,” she said. “We’re really looking at the multiplier effect, how do we make sure that we have that leadership culture... and we measure that through employee survey results.”
It’s not apparent whether organizations really understand what they want in leadership, said Potts.
“Sometimes, we find it’s difficult to do the hard messages: ‘Frankly, you’re not going to make it.’ We tend to shy away from delivering those messages and it is a pyramid, in the end — there are only certain people whose roles and characteristics demand leadership and we should be ruthlessly selecting the best. And I don’t think we do.”
Skills gap
When it comes to employee concerns, layoffs (18 per cent) are the least of their worries after obsolescence (40 per cent), not enough opportunities for advancement (35 per cent), inadequate staffing levels (31 per cent), wage stagnation (27 per cent) and technological change and economic uncertainty (both 19 per cent), found the survey.
“Employees are freaking out about their jobs going away,” said Cone. “People are really concerned about getting left behind by a changing workplace, by technology and by culture changes, globalization… and they don’t feel that their companies can support them.
“There’s a real anxiety out there among workers and a real hunger for leadership and development and training, and yet companies are having a hard time developing a learning culture.”
Newer ways of learning can be much more effective, user-friendly and less expensive than traditional top-down training where you go off-site or pull everybody off work for a while, said Cone.
“Instead, it’s real-time, as-needed and peer-generated — I think that can be very powerful.”
The pace of change is just so fast now, it’s about keeping up with what’s going on, keeping up your skill set, said Potts.
“I find it amazing when I go around businesses now to see how few of them have genuine knowledge-sharing, instant products in the way young people and all of us are used to using things like YouTube,” he said.
“Businesses don’t do it and they shy away from it... we’ve got to change very quickly how we think about learning and how we learn from each other.”
It’s about the balance between being able to deliver your work and learning at the same time, which can mean giving people challenging assignments, with like-minded people, where they’re evolving their skills, said Walsh.
“We have to use multiple mediums to be able to address the whole topic of learning.”
This is a huge challenge for companies, said Cone.
“If you get this right, if you build that learning culture, it’s not going to solve all your other problems but it’s going to address each of those problems,” he said.
“It’s going to help you with leadership, it’s going to help you acclimatize and acculturate millennials, it’s going to help you bring contingent workers in and educate a generation of leaders, it’s going to help people understand what’s available to them and be a benefit to them.”
