Rewriting the rules for the digital age

Deloitte report looks at global human capital trends

Rewriting the rules for the digital age
Organizations are being faced with a radically shifting context for the workforce and workplace, according to Deloitte. Credit: sdecoret (Shutterstock)

The data is in, and it shows organizations are being faced with a radically shifting context for the workforce and workplace, according to Karen Pastakia, partner at Deloitte’s human capital and talent strategies in Toronto.

And the workplace of the future continues to be the top concern for companies across the world, followed closely by career management, talent acquisition and employee experience, said Pastakia, speaking at a recent Strategic Capability Network (SCN) event in Toronto.

Deloitte’s 2017 Global Human Capital Trends report surveyed more than 10,000 business and HR leaders from 140 countries — including 300 Canadian companies.

“This year, we’ve seen a significant shift in terms of what the executives have been telling us through the research,” she said.

Trending topics

Nine out of 10 companies are currently exploring how to design the organization of the future, according to Deloitte’s research. But just 11 per cent believe they have a firm grasp on what that organization should look like, said Pastakia.

At the same time, 81 per cent of respondents pointed to shifting career models as an important trend. Contingent work is rising, and many employees are working well past traditional retirement age.

“Career management is something that I would say organizations are fundamentally rethinking how they do that, rethinking the structured models that have existed for many, many years and really opening up the career model to a much more flexible, agile model,” she said.

Talent acquisition came in third among important trends, at 81 per cent — its highest ranking yet — and just 19 per cent of companies believe they’re doing it right, said Pastakia. Shared talent and crowdsourcing remain unknown factors for many, significantly altering the way HR professionals find and assess recruits.

“Talent acquisition is ripe for disruption in my mind,” she said. “There’s such a fundamental shift in the way that we’re thinking.”

A new addition to the top trending concerns, at 79 per cent, is employee experience, with just 14 per cent of respondents believing in their current internal process.

“This is how our executives are actually articulating one of the fundamental issues that they’re dealing with in their business,” said Pastakia. “‘How do I need to evolve the experience that I’m giving to my talent in a landscape that is rapidly changing? What do I need to be thinking about differently?’ Because I can tell you, we are desperate for talent in this country.”

Other top trending topics in the 2017 report included leadership and the transformation of performance management — both ringing in at 78 per cent, she said.

“None of these trends are mutually exclusive... They’re all really about the experience that workforces have in the workplace today,” said Pastakia.

New world of work

Organizational design continues to go through an experimentation phase, said Amir Rahnema, a partner at Deloitte’s global organization design practice in Toronto.

“It’s going through a renaissance,” he said at the event. “This has been the number one trend over the last few years, with close to 90 per cent of organizations noting it was important to them.”

Half of the organizations surveyed are attempting reorganization, yet just 11 per cent believe they will get the structure right, said Rahnema.

“Obviously, that’s not a recipe for success,” he said. “This is a concern for us. Organization design is messy business. It’s about rewiring people’s day-to-day jobs. Rewriting power dynamics is effectively what we’re doing.”

The upheaval is hard to miss as the lifespan of companies continues to shorten, said Rahnema. The result is many employers are overhauling strategy at a frenetic pace in an effort to reorganize every two years.

“It’s troubling to think that in all this time, as the business world is revolutionized, we just haven’t kept pace. Unfortunately, the vast majority of global companies continue to be extremely bureaucratic and overlayered.”

In the United States, about $3 trillion — 20 per cent of the country’s gross domestic product — is lost in the economy each year due to excessive bureaucracy, he said.

While that old-world business model was predictable and easy to understand, “for many industries, that world is gone,” said Rahnema. “Organizations of the future, we anticipate, are going to move away from this focus on efficiency to a focus on adaptability.”

Nimble, functional teams with decision-making power are the future of work, he said, pointing to digital music service Spotify’s successful anti-hierarchal stance which sees employees structured by tribes, squads, chapters and guilds — cross-functional teams focused on specific business objectives.

Mission- and outcome-oriented, this style has increased the speed of ushering products to market.

“This is where we think the world is heading, from a design standpoint. If you’re in a traditional industry that’s either heavily regulated, or you’re not yet staring down the barrel of a looming crisis, think about where you want to disrupt and innovate. You actually have time to do this right now in a measured way versus doing it in a crisis (and) it’s always better to organize from a position of strength.”

Those involved with designing the workplace of the future should tread forward with humility, making predictions at maximum two years in advance, said Rahnema.

“We’re not in the business of predicting the future, but if you can at least adapt an organization and structure it in a way that it can be flexible enough to adapt to a new flexible world, that’s really what we’re talking about.”

Unlocking flexibility

New technologies continue to change the way work gets done and HR professionals need to position themselves as leaders of change, said Tracey White, owner and managing director at Strategy in Action in Toronto, prior to the presentation.

“The organizations we work in today operate in ways that are very similar to those of 100 years ago. They remain hierarchical, functionally siloed and rules-bound.”

Due to the advance of artificial intelligence, robots and mobile technology, the focus on design and flexible organizations will consume HR over the next 10 years, she said.

There are four ways flexibility can be unlocked at organizations in terms of how work gets done, said Rahnema: protecting the core, unleashing networked teams, adapting collaborative systems mindsets, and creating conditions for flexible design by thinking of the company first, rather than the function.

It’s not as difficult as HR professionals may think, as workers are essentially doing the same functional things, he said. HR’s role may well be communicating exactly that in an effort to reduce the fear of change.

“You’re not a unicorn. You don’t actually have to do superhuman things now,” said Rahnema. “You just keep doing your job. But now you have a different master that you’re accountable to. It’s not your functional home or boss — it’s the customer. It’s the outcome we’re trying to achieve.”

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