Global Business Driven HR Transformation: The Journey Continues
Deloitte Insights video
"By 2050, the global population is expected to grow by 50 percent — primarily driven by India and China," according to Global Business Driven HR: The Journey Continues, a new book published by Deloitte Consulting LLP’s Human Resources Transformation practice. Tune into this episode of Deloitte Insights to learn how HR capabilities can help organizations realign their workforces with their changing global footprints.
Jason Geller, Principal, Deloitte Consulting LLP
Sean: Hello and welcome to Insights. On this episode, we are welcoming back Jason Geller, a principal in Deloitte Consulting and the Global and U.S. Human Resources Transformation Practice leader. Jason, welcome back officially.
Jason: Thank you.
Sean: Now I understand that your practice recently wrote a book. It is called the “Global Business Driven HR: The Journey Continues” and it outlines a number of different trends and drivers that are effecting this global HR transformation. My question for you is among those 18 trends that you outlined, some of them are growth, globalization, cost pressure, which are the ones that you think these organizations should be focusing on now?
Jason: Right. It is actually pretty fascinating, the global business environment is changing pretty rapidly right now and as organizations think about their HR transformation strategies; our big message is to stay focused to where their business priorities are. And to understand business priorities, it is important to understand what is happening more broadly in the overall economy in the economic environment. We have talked about a lot of different business drivers, but I will pick three may be to highlight for you.
Jason: Growth, mergers and acquisitions and compliance and I purposely picked these three because they actually connect together, which I think demonstrates a bit of the complexity of the situation many organizations are facing. So, if you think about growth, organizations are very aggressively thinking about growth strategies, not just growth at the topline, but growth at the bottom line as well, so profitable growth. Secondly, take the mergers and acquisitions that is often a growth strategy for organizations, so they are merging, acquiring and divesting different parts of their business, so M&A is clearly connected to a growth strategy. And then add compliance, so compliance becomes increasingly important as organizations work on the global stage. So, now string them all together. A growth strategy that is driven by M&A, that moves in organization into new markets, creating new compliance issues. Really, a challenging situation for organizations to think about and if the business strategy is linked to growth and M&A, you are going to have compliance issues and HR needs to figure out their seat to the table and their role in addressing all these.
Sean: Thank you for showing the cascade there and it is interesting that you are talking about growth because as I read through the book, the stat that jumped out at me was you say here, “by 2050, the global population is expected to grow by 50 percent, primarily driven by India and China, yet 50 percent of the world’s corporate management is currently located on the west side, it is in North America and it is in Europe.” So, what does HR have to do there to address that trend?
Jason: Fascinating question. So, India and China, really in addition to all emerging market, pose a real opportunity for organizations as they think about their HR transformation initiatives. Those emerging markets, particularly India and China really have two dimensions; one is their markets for talent, secondly, their markets for the products and services that organizations actually sell and bring to markets. So, really both dimensions become extremely important and we are seeing this manifest itself in the HR transformation strategies organizations are employing. We typically use two terms, talent-led HR transformation as well as emerging markets led HR transformation. If you think about the typical approach to an HR transformation journey, the conventional wisdom is you start in large markets and work your way eventually with the smaller markets if you get there, kind of a small tail. Same thing from a talent perspective, what we typically do is start with core HR, payroll, benefits, core HR administration and then eventually get to the more strategic processes around talent performance, succession, compensation, career development and learning. What we were watching is, because of the focus on emerging markets, again China and India being particularly important these days, is a shift in deployment strategy. So, it is not okay to start in mature established markets. It is about focusing on the growth markets, the emerging markets, China and India. So, we are seeing people start their deployments in an emerging market rather than traditionally in the U.S. or the U.K., large established markets. Same thing from a functionality perspective, so I mentioned the term talent-led HR transformation rather than starting with core HR, clients are asking to start with talent processes. They don’t want to do HR in phase one and then performance and compensation and learning in phase two several years out. The business requires the talent processes. So, they are actually asking for that to be first, which presents some uncommon challenges, particularly if you don’t have global information and global data, had you run global talent related processes. So, the interesting part is that the organizations focus on emerging markets for the two reasons I mentioned. We are seeing that really shift the priorities back to the business connection I mentioned earlier around how the deployment strategies work for HR transformation, focus on emerging markets first and focus on the talent related processes first rather than the more typical approaches HR transformation.
Sean: Well certainly sounds like it is going to be a challenge to jump in with both feet. We are talking about emerging markets, but my next question for you is about emerging technologies, one of the areas that was highlighted in your book.
Sean: How do you see emerging technologies factoring into this HR transformation?
Jason: It is actually creating a whole new set of opportunities for HR organizations and not just opportunities, but also expectations. So, when we think of emerging technologies, there are four, bundled together; cloud, social, mobile and analytics and they really present two different challenges for HR. First is it changes the way HR delivers its services. So, if we think back years ago as different HR technologies came out, we started doing a lot of process redesign and reengineering around the actual HR processes and how that affected the delivery model, but with the push towards cloud, social, mobile and analytics, we are seeing a shift in how the delivery model works from a technology perspective. And secondly, may be even more important, more challenging for HR is the expectations of the consumer of HR services or the customer is changing. A younger workforce expects and perfectly demands access to HR information on a real time basis on the device of their choosing at the time of their choosing. Very different and very difficult for HR to quickly move in that direction as the workforce looks at the consumerization of the web and wants to see that at the enterprise level as well, but pushing even bit more in a strategic direction, we think about managers who have very typically relied on HR for information, for access to reports for the analytical information. They want that information now. They don’t want to have to go to HR. They want to be able to sit on their couch with their tablet and tap into information and navigate reports and look for things that are interesting to them. Questions they may not even know they have until they get in really live with the data and the information and may be one another additional point is almost everyone walks around with their mobile device or their tablet now. The ability to put employee information at the managers fingertips at the point in time they needed is pretty game changing, so think about the idea of walking into conversation with someone on your team and right before that meeting being able to pull up their information on your tablet and not just know their name, rank and serial number, but know about their last project, know about their performance review, be able to track your last conversation with them, know what projects they are being considered for, opportunities they are being considered for. And now you step into that 30 minute conversation with someone on your team and the ability to really influence that person, their level of engagement and their connection to the organization changes dramatically. You show up with a whole set of information, so it is not a cursory conversation or pleasantries, it is very focused conversation about that individual, their interest, their career and we, as managers, show up at a very different perspective when we show up engaged and knowledgeable in that employee. The level of engagement changes dramatically.
Sean: It sounds pretty impressive. It also sounds kind of wild to think that a new employee coming in with demands and to have all that information on the smart phone, but indicative of the world we live in. My last question for you is really about focus like you were just saying and that is there are 18 trends outlined in this book, a wealth of information that you laid out and your fellow co-authors have laid out, but if an organization wants to get started, if they want to go down this transformation path, how do they do that?
Jason: That is actually a great question. We use the term business driven HR and we use that term for a reason. The days of process and technology driven HR transformation projects are in the past. They are table stakes. Organizations expect HR to deliver services in an efficient, effective and compliant way. What we really should do is to focus on what the priorities of the business are and really change the conversation. So, as you bring forward an HR transformation case for change, aligning it to the business priorities and the business objective rather than just what we are going to do. So, it is really about change in the conversation. What HR services and capabilities and solutions will be provided to the organization with much less of an emphasis on the “how?” The technology is interesting, the sourcing strategies are interesting and they are important, but the business is not going to buy for that reason and the business cases get funded when they are linked to the business strategies. So, going back and go to my earlier example that I started with around growth, M&A and compliance, if an organization and HR function, finance organization and IT come together to the executive management and say, we understand your business strategy, we understand what is happening in the broader economy, we see what you are trying to do, here are the things we believe we can do to help you, global mobility, global performance management, global talent management, new market entry, global compliance and by the way here are the things we have to do in order to make that happen. That is a very different story than starting with, “hey, we want to do a bunch of initiatives and we think you can have these benefits.” We see much stronger take up for HR transformation, much more of a business collaborating approach when clients approach that way.
Sean: Sounds like an awful lot of collaborations. So, Jason thank you very much for being back on the program.
Jason: Thank you.
Sean: Okay. We have been talking about market drivers and trends for HR transformation with Jason Geller, a principal in Deloitte Consulting. If you would like to learn more about Jason or any of the topics discussed on today’s broadcast, you can find that information on our website, it is deloitte.com/insightsus. For all the good folks here at Insights, I am Sean O’Grady. We will see you next time.
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