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HR ready for the future? No way, report says

The highly connected and global 21st-century workforce is here. And if a massive new report from Deloitte is to be believed, employers are simply not ready for the challenges that workforce will present.  

The Deloitte Global Human Capital Trends 2014 report combines 15 years of research as well as a global talent management survey, incorporating the views of more than 2,500 business and HR leaders in 94 countries.

According to the report, the single biggest challenge cited by most (86%) respondents is leadership development, followed by retention and engagement (79%), and “reskilling” the HR function (77%).

The bad news: Most respondents say that their organizations aren’t prepared to address those challenges, the report said.

“As the world’s population grows, the global workforce is simultaneously getting younger, older, and more urbanized,” Josh Bersin, principal and founder of Bersin by Deloitte, said in a press release. “Millennials are reshaping the talent markets with new expectations; new technologies are changing work in countless ways; and we are more frequently competing and racing with machines for knowledge work. The findings of our global survey reveal that a majority of global organizations are not prepared to deal with these trends that are reshaping the workforce.”

Developing leaders is the top issue facing these organizations, the research says. Yet only 13% percent of respondents believe they do an excellent job in providing leadership programs across all levels; 66% believe they are “weak” in their ability to provide leadership programs for Millennials, and about half (51%) have little confidence in their ability to maintain clear and consistent succession programs.

The second top challenge cited by respondents — retention and engagement of employees — is another area where executives rate themselves as either “weak” or just “adequate.” More than one-third (38%) reported they are “weak” at integrating social, community and corporate programs, and aligning employee and corporate goals. Four-in-ten respondents (40%) said their organization is “weak” in helping employees balance their personal and professional lives, and only 8% believe they have a strategy to help employees manage the barrage of information they receive every day.

HR under the microscope

HR gets an especially critical look in the Deloitte report: 43% of respondents to the survey indicated that their organizations are “weak” when it comes to providing HR with appropriate training and experiences. Forty-seven percent ranked their organizations “weak” on preparing HR to deliver programs aligned with business needs.

According to the study, many HR teams lack the skills and data they need to understand today’s global business environment, local labor markets, evolving workforce demographics, shifts in technology and the changing nature of work itself.

In fact, more than one-third (34%) of the respondents said their HR and talent programs are just “getting by” or even “underperforming.” Moreover, less than 8% of HR leaders have confidence that their teams have the skills needed to meet the challenge of today’s global environment and deliver innovative programs that drive business impact.

Jason Geller, a national managing director for Deloitte, said that “today’s HR departments are not equipped to face the challenges of this new role. When you add to this the rapidly changing landscape of HR technologies, such as cloud and big data, and their impact on attracting, retaining, and developing talent, it becomes clear that reskilling HR teams is arguably the most critical mission for organizations today.”

A closer look at some of the trends covered in the report:

Hiring — and keeping — the best employees

Reinventing talent acquisition: Even as the majority of respondents (62%) said their organizations rely on social tools for sourcing and advertising positions, when it comes to fully utilizing analytics for recruitment and staffing, more than half (54%) indicate that their practices are “weak.”

The overwhelmed employee: Information overload and the always connected 24/7 work environment are overwhelming workers, undermining productivity and contributing to low employee engagement. Sixty-five percent of executives responding to the survey rated the overwhelmed employee phenomenon as being an urgent or important trend, while 44% said that they are “not ready” to deal with it.

Engaging the 21st-century employee: Millennials will make up 75% of the workforce by 2015, and 66% of the respondents reported “weak” capabilities when it comes to providing focused leadership programs for Millennials. Fifty-eight percent of executives reported “weak” capabilities in “providing programs for younger, older and multi-generational workforces,” underscoring the challenges associated with a multi-generational 21st-century workforce.

Shifting from diversity to inclusion: Nearly all respondents say their organizations promote diversity, but most fail to realize the business benefits of a diverse workforce. About one-third (34%) of respondents say their organizations are unprepared in this area, while only 20% claim to be fully ready.

Leadership and development

Developing leaders at all levels: Eighty-six percent of respondents in the Deloitte survey rated leadership as “urgent” or “important.”  But only 13% said they do an excellent job in developing leaders.

Time to replace “rank and yank”: Even as the nature of the work done by a majority of employees has changed dramatically, the way organizations evaluate employees has not. Only 8% of respondents believe their organization’s performance management process drives high levels of value, while 58% said their current performance management process isn’t an effective use of time.

Corporate learning redefined: More than two-thirds (70%) of respondents surveyed see new learning methods, such as free online and mobile learning platforms, as “urgent” or “important” — yet only 6% say they have mastered the content and technology capabilities needed to make online learning accessible and compelling for their employees.

Meeting the future

Delivering on big data: Talent analytics is starting to enable HR departments to make informed talent decisions, predict employee performance and enable advanced workforce planning. While 78% of respondents from large organizations (with 10,000 or more employees) rated HR and talent analytics as “urgent” or “important,” enough to place analytics among the top three most urgent trends, 45% of the same respondents rated themselves “not ready” when assessing their readiness in HR analytics—among the lowest readiness rankings for any of the 12 global trends.

Racing to the cloud: Organizations are rapidly moving away from legacy systems to implement a new breed of highly integrated, cloud-based talent and HR systems. More than two-thirds (68%) of Deloitte’s respondents say that HR technologies are “urgent” and “important” and yet 56% report no definitive plans for their HR systems.

The global and local HR function: Global HR and Talent Management, an integrated global operating model that allows for customizable local implementation, is the second most “urgent” and “important” trend for large organizations around the world (those with 10,000 or more employees), according to the survey.