Today’s workforce is no longer a set of employees who come into the
office or factory each morning or shift and go home each night. More and more
of the workforce is composed of contingent employees working variable, often
part-time hours or schedules, compensated hourly, operating remotely, or
actually working for an external firm.
Think
again about diversity
The power of diversity goes
far beyond talent supply; it’s becoming widely accepted, for example, that an
organisation is more likely to predict consumer preferences if it has a
workforce that mirrors its customer base. And there’s evidence that workforce
diversity brings greater innovation and creativity, a reduction in ‘group
think’ and improved governance. But it’s important to understand that diversity
comes in many forms. A recent report from the Center for Talent Innovation
in New York identified ‘two-dimensional diversity’ – this distinguishes
inherent or surface-level diversity (gender, race, age, religious background,
socioeconomic background, sexual orientation, disability, nationality) from
acquired diversity (cultural fluency, generational savvy, gender smarts, social
media skills, cross-functional knowledge, work experience, a global mindset).
Acquired diversity means, in essence, a proliferation of perspectives. Our work
with Professor Roger Steare, Corporate Philosopher in Residence at Cass
Business School, into the role of ethics in leadership and management has shown
how differences – especially gender, age, religion and politics – influence
ethical perspectives when making decisions. Organizations need to work with
inherent diversity as they adapt their talent strategy in response to
unprecedented demographic change, but they must cultivate acquired diversity if
they are to realize the greatest value.
Culture
and Engagement
Employees are now like customers; companies have to consider them
volunteers, not just workers:
As the job market has heated up and new technologies have exploded,
power has shifted from the employer to the employee. Websites like Glassdoor,
LinkedIn, Facebook, and others not only increase transparency about a company’s
workplace; they make it far easier for employees to learn about new job
opportunities and gain intelligence about company cultures.
• Leaders lack an understanding of and models for
culture:
Culture is driven from
the top down. Yet most executives cannot even define their organization’s
culture, much less figure out how to disseminate it through the company.
· The new world of work changes the way we engage
people:
The world of work is very different from and
more complex than it was only a few years ago. Employees today work more hours
and are nearly continuously connected to their jobs by pervasive mobile technologies.
They work on demanding cross-functional teams that often bring new people
together at a rapid rate. Flexibility, empowerment, development, and mobility
all now play a big role in defining a company’s culture.
• Employees’ motivations have changed
Today’s workers have a new focus on purpose,
mission, and work-life integration. Research shows that a variety of complex
factors contribute to strong employee engagement, including job design, management,
work environment, development, and leadership. Today, more than twice as many
employees are motivated by work passion than career ambition (12 percent vs. 5
percent), indicating a need for leadership to focus on making the work
environment compelling and enjoyable for everyone.
Google, a highly rated “best place to
work” in many studies, focuses heavily on culture. The company regularly
measures dozens of factors to understand what makes people productive and
happy. This research has shaped Google’s workplace culture in myriad ways— from
the company’s open workplace design and unlimited vacation policy to the
provision of free gourmet food and on-site laundry services for employees.
Although culture and engagement play such a critical role in business
performance, most organizations do a poor job of measuring their achievements
or shortcomings. Historically, companies have relied on annual engagement
surveys, often costing hundreds of thousands of dollars and taking months to
deploy. And very few companies have a process or tools to measure culture and
learn where it is strong, weak, or inconsistent. At a time when corporate
cultures are being continuously debated, shaped, and redefined on social
networks, the once-a-year survey is perilously obsolete.
Fortunately, new tools are emerging to provide organizations with
real-time sentiment and employee feedback. A new breed of vendors offers pulse
survey tools, employee sentiment management tools, culture assessment tools,
and real-time employee monitoring tools to help leaders and supervisors rapidly
assess when engagement is high and when problems are arising. These new tools
make it possible for organizations to monitor employee sentiment with the same
level of rigor and speed as they measure customer sentiment.
Predictive
analytics is here and now
If HR is to prove itself as a strategic
partner, it must make use of the tools at its disposal. The best HR functions
are already showing that they can provide genuine insight that helps businesses
make better decisions, through their use of predictive analytics. But this must
be analytics to support the business, and not just data for data’s sake. Too
many organizations are limiting their use of HR data to describe what has
already happened (points 2 and 3 on the curve), rather than using analytics to
predict what might happen and find ways to address the problem. The excuses
often put forward by HR professionals who have moved slowly on analytics – such
that HR is not mature enough for predictive analytics, or doesn’t capture
enough data to do predictive modeling – no longer apply. Predictive modeling is
about testing hypotheses with relevant historic data, and is about the quality
of that data rather than its quantity. HR is relatively new to data analytics;
as a function it lacks statisticians, analysts and data visualization experts.
HR analytics is about telling the story, rather than focusing on the numbers –
business leaders aren’t looking for a statement of fact, they need the ‘so
what?’ We’ve warned repeatedly that HR needs to act if it is to become a true
strategic partner – the window of opportunity for HR professionals is closing
A
Makeover is Necessary
Several factors are converging that should make reinventing HR a
critical priority for companies around the world.
• CEOs and other senior executives are more worried about talent than
ever before. Eighty-seven percent of our respondents are deeply concerned about
culture and employee engagement, 86 percent about their leadership pipeline,
and 80 percent about workforce capabilities. At the same time, 80 percent of
survey respondents believe their company’s HR skills—or lack of skills—are a
significant issue.
• Many organizations are moving to a global business services model, and
back-office functions and systems are transitioning to cloud technology. HR is
often at the fore- front of this transition. As a result, the HR function has
an opportunity to play a leading role in defining the scope of retained
functional roles such as business partners and centers of excellence.
• The newer HR technology platforms now offer integrated systems and
more access to data, including analytics and assessment science. Employee
self-service is now a reality, all but eliminating the need for HR generalists.
Yet HR continues to struggle to optimize analytics.
• A highly competitive global talent market has shifted power into the
hands of employees, forcing HR to redesign programs in the face of a much more
demanding workforce.
• Traditional HR practices such as performance management and
leader-
ship and development are undergoing radical change, forcing HR to throw
away the old playbook and deliver more innovative solutions.
It
all starts with the Senior HR Leader
In this era of rapid business change, the role of the CHRO becomes
radically different and more demanding than ever. Today’s CHRO must be
innovative and business-savvy and be able to stand toe to toe with the CEO. At
the same time, a CHRO must know how to bring the HR team together and help it
evolve into a more distributed, business-integrated function. CHROs must also
be comfortable adopting and embracing technology and analytics, which are
integral to HR’s future success.
One sign that many organizations are expecting something fundamentally
different from HR is that they are bringing in a fundamentally different kind
of executive as CHRO. Research shows that nearly 40 percent of new CHROs now
come from the business, not from HR. At Liberty Mutual, for instance, the chief
talent and enterprise services officer, Melanie Foley, previously served as
executive vice president of distribution at Liberty Personal Markets.
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