Global business growth jeopardised by companies’ failure to adjust to 21st century workforce: Deloitte survey
Survey reveals that organisations are not ready to address the striking shift in employee expectationsDOWNLOAD
20 March 2014: A significant gap exists between the talent and leadership issues organisations face and their readiness to respond, according to the Deloitte Global Human Capital Trends 2014 survey of over 2,500 business and Human Resource (HR) leaders. Across the world, respondents recognised the need to take action on critical issues including leadership (86 percent), retention and engagement (79 percent), and reskilling the HR function (77 percent). However, many expressed reservations about their teams’ ability to address the issues.
“The challenge facing the majority of global organisations is that they are not prepared to deal with the major trends that are reshaping today’s workforce,” said David Brown, Deloitte Australia’s Human Capital Leader. “The 21st century organisation is global, highly connected, and demanding. Organisations, and specifically HR leaders, need to better adapt if they want to attract, engage and develop the right talent in today’s competitive marketplace.”
Respondents felt that developing leaders at all levels was the top issue facing the majority of organisations, yet only 13 percent believe they do an excellent job in leadership development; 66 percent believe they are ‘weak’ in their ability to provide focused leadership programs for Millennials, and over half (51 percent) have little confidence in their ability to maintain consistent succession programs.
Retention and engagement of employees was the second top challenge, according to the survey. More than one-third (38 percent) of leaders report they are ‘weak’ at integrating social, community, and corporate programs and aligning employee and corporate goals. Additionally, four-in-ten (40 percent) state their organisation is ‘weak’ in helping employees balance their personal and professional lives.
The survey reveals that many HR teams lack the skills needed to meet the challenges of today’s global business environment characterised by disruptions in labour markets, evolving workforce demographics, shifts in technology and the changing nature of work itself. In fact, more than one-third (34 percent) of the respondents believe that their HR and talent programs are just ‘getting by’ or even ‘underperforming.’ Moreover, less than 10 percent of HR leaders have confidence that their teams have the skills needed to meet the challenge of today’s global environment and consistently deliver innovative programs that drive business impact.
“There’s no doubt that in Australia human capital strategies are now a major factor for business growth,” said Mr Brown. “One of our biggest findings in this research is the fact that doing more is not enough. Organisations are now seeing a new workforce, one that’s younger, more demanding, and more dynamic than ever. It is a time for organisations to do things differently.”
All respondents surveyed this year cited four issues as the most urgent for organisations: leadership, retention and engagement, the reskilling of HR, and talent acquisition and access. In many cases, respondents don’t believe their organisations are ready to take on these challenges as readiness scores lag behind the trend’s perceived urgency.
“The survey results show that organisations today have to manage people differently - creating an imperative to innovate, transform, and reengineer human capital practices,” said Mr Brown. “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 organisations today.”
The key trends identified in the Deloitte Global Human Capital Trends 2014 report fall into three major categories: attracting and engaging; leading and developing; and transforming and reengineering the HR function:
The overwhelmed employee. Information overload and the always connected, 24/7 work environment are overwhelming workers, undermining productivity, and contributing to low employee engagement. More than one-third (34 percent) of business leaders rate this issue among their top five priorities, and fewer than one in ten believe they are dealing with it effectively.
Reinventing talent acquisition. Even as the majority of organisations (62 percent) rely on social media channels for sourcing and advertising positions, when it comes to fully utilising analytics for recruitment and staffing, more than half (54 percent) indicate that their practices are ‘weak.’
Engaging the 21st century employee. Millennials will make up 75 percent of the workforce by 2025, yet 58 percent of executives indicate that their companies are not ready to attract and retain Millennials and report they have ‘weak’ capabilities when it comes to ‘providing programs for younger, older, and multi-generation workforces.’
Shifting from diversity to inclusion. Nearly all organisations promote diversity, but most fail to realise the business benefits of a diverse workforce. One-third (34 percent) of companies say they are unprepared in this area, while a small 20 percent claim to be fully prepared.
Developing leaders at all levels. Eight-six percent of business leaders rate leadership as ‘urgent’ or important, however, only 13 percent say they do an excellent job in developing global leaders – creating the largest readiness gap found in the survey.
Corporate learning redefined. More than two-thirds (70 percent) of executives see new learning methods, such as free online and mobile learning platforms, as ‘urgent’ or ‘important’, yet only six percent say they have mastered the content and technology capabilities needed to make online learning accessible and compelling for their employees.
Performance management is broken. Companies worldwide are questioning their forced ranking, rigid rating systems, and once a year appraisal process. This is the year a new model of performance management will likely sweep through HR.
The quest for workforce capability: create a global skills supply chain. But while 75 percent of those surveyed rate ‘workforce capability’ as an urgent or important challenge, only 15 percent believe they are ready to address it.
Delivering on big data. Big data is increasingly enabling HR departments to make informed talent decisions, predict employee performance, and conduct advanced workforce planning. However, only seven percent of organisations today believe they have the capability to use data analytically.
Racing to the cloud. Two thirds of business leaders believe that HR technologies are urgent and important and yet 56 percent report no definitive plans for their HR systems.
The reskilled HR team. The third most highly rated challenge in human capital noted in our survey is the need to reskill the HR team. Only seven percent of HR leaders surveyed feel their teams can consistently deliver innovative programs that drive business impact.
The global and local HR function. Global HR and Talent Management is the second most urgent and important trend for large companies around the world. Companies face the challenge of developing an integrated global operating model that allows for local implementation, enabling them to capitalise on business growth in emerging economies, tap into local skills, and optimise local talent strategies.
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