The power of the social enterprise lies in its ability to bring a human focus to everything it touches, empowering people to work productively with technology to create lasting value for themselves, their organisations, and society at large.
2021 Global Human Capital Trends
IN just a few short years, the concept of the social enterprise—an organisation whose mission combines revenue growth and profit-making with the need to respect and support its environment and stakeholder network—has grown from an intriguing new idea into a concrete business reality. BlackRock Chairman and CEO Larry Fink made headlines in 2018 when, in his annual letter to CEOs, he asserted that “society is demanding that companies, both public and private, serve a social purpose.”1 Barely two years later, the Business Roundtable, in a letter initially signed by the CEOs of 181 of the world’s largest companies that has continued to gain signatures since, redefined the purpose of a company as serving all stakeholders, not just shareholders.2 And at the 2020 World Economic Forum, purpose and ethics were central themes on the agenda.3 In fact, 50 per cent of respondents in this year’s Global Human Capital Trends survey, which polled nearly 9,000 business and HR leaders in 119 countries, categorised their organisation’s purpose as broadening extensively to include all stakeholders, including the communities they serve and society at large.
Driving the social enterprise’s accelerating momentum has been a continuing societal shift toward individual empowerment and advocacy in workers’ relationships with their employers. In 2018 and 2019, people went on strike in numbers not seen since the 1980s4 to demand changes ranging from better working conditions to gender pay equity.5 Concerns about access to employment, wage inequality, and organisations’ impact on communities continue to make headlines.6 These mounting societal expectations—combined, in many countries, with greater worker power due to low unemployment rates—have put human concerns front and center for organisations and society.
At the same time as these human concerns were playing out, another equally powerful phenomenon was underway: an intense focus on technology as a primary driver, if not the primary driver, of enterprise value. “Every company is a technology company” became a common mantra as organisations invested billions in “digital transformation” efforts intended to turbocharge value creation through innovative technological applications.
However, through it all, most organisations viewed their efforts to address human and social concerns as wholly separate from their efforts around technology—the two conversations ran on separate tracks. Even today, pundits who connect the two realms often portray human interests not only as separate from, but as antithetical to, organisations’ interest in capitalising on technology to its fullest. Many individuals have come to subscribe to this latter view as well, most obviously in the belief that AI and robotics are an imminent threat to human employment.
Now, however, it’s time to challenge the view that technology and humanity are distinct domains, or even fundamentally at odds. We believe that the greater value often comes from a fusion of the two.
Last year, we put out a call to action on this front by asking organisations to “reinvent with a human focus.” But as we enter into a new decade, we have realised that that we need to go one step further. Instead of asking how to humanise a work environment inundated by technology, the deeper question for organisations is how they can leverage the environment that technology creates to humanise the world of work. By recognising the possibilities of that environment, organisations can chart a path forward to embrace one of the greatest paradoxes they face today: Can organisations remain distinctly human in a technology-driven world?
A view that fuses the human and the technological—one that calls us to work with a world shaped by technology—can enable people and organisations to transcend the most challenging conflicts that exist in organisations today by making three bold shifts:
These three shifts represent a new set of attributes that characterise what it means to truly become a social enterprise at work (figure 1):
To embody these attributes takes a high degree of change—one that extends beyond broad cultural descriptions and lofty purpose/mission statements to the tactical processes, programmes, and structures that bring an organisation’s culture, purpose, and mission to life. To help you think through these changes, we have used the framework of purpose, potential, and perspective to organise our discussion of this year’s human capital trends. These trends look across the components of an organisation’s infrastructure—from the systems that guide process execution to the metrics that track and measure strategic progress—and offer suggestions on ways to embed purpose, potential, and perspective into the very core of how they are designed and executed.
Organisations that can harness their people’s complementary strengths in the service of a common goal can benefit from diversity to drive higher performance. We explore three ways that organisations can transform individuality into collective value: by fostering belonging through a sense of contribution; by supporting worker well-being through the thoughtful design of work; and by formulating workforce strategies based on a nuanced understanding of people’s attitudes and values.
Belonging: From comfort to connection to contribution. Organisational efforts to foster belonging have primarily focussed on making every individual feel respected and treated fairly in an inclusive work environment. While this remains critical, leading organisations are forging a stronger link between belonging and organisational performance by strengthening workers’ connections with their teams and fostering their sense of contribution to meaningful shared goals. When teams are united by a common purpose, differences in opinion on matters unrelated to that purpose become less relevant—and differences in opinion in how to achieve that purpose become grounds for reasonable debate rather than a source of divisiveness.
Designing work for well-being: Living and performing at your best. Worker well-being is a top priority today, largely because of the widespread belief that it supports organisational performance. But how can organisations take something as personal as well-being and translate it into something that can have a broader impact beyond the individual? We believe the answer is to focus on the individual in work, not just the individual at work. To create a sense of contribution that translates into true organisational performance, organisations should expand their focus from programmes adjacent to work to designing well-being into the work itself. By doing so, organisations can restructure work in ways that help workers not only feel their best but perform at their best, strengthening the tie between well-being and organisational outcomes and fostering a greater sense of belonging overall.
The postgenerational workforce: From millennials to perennials. Organisations have traditionally leaned heavily on workers’ age and generation to inform and differentiate their talent strategies. But today’s workforce is more complex than ever, making any single demographic lens of limited value. Forward-looking organisations are shifting their approach to better understand the workforce’s attitudes and values. Based on these insights, organisations have an opportunity to understand individuals’ distinct characteristics to bring them together in ways that can promote a greater sense of belonging. This, in turn, can help workers to maximise their contribution at work, derive enhanced meaning in their careers, and, ultimately, better align themselves with the purpose of the organisation—one that not only understands what they can contribute, but how they uniquely can do so.
An organisation that can help its people find security through reinvention can gain an advantage through its ability to embrace productive change. We highlight three areas where organisations have opportunities to capitalise on change: the integration of artificial intelligence (AI) into workgroups and superteams; the transformation of knowledge management through technology; and the cultivation of, and investment in, workforce resilience.
Superteams: Putting AI in the group. Despite dire predictions about workers being replaced by intelligent machines, leading organisations are taking a new tack: actively searching for strategies to integrate AI into teams to help produce transformative business results. These “superteams” hold the promise of allowing organisations to reinvent themselves to create new value and meaning, while giving workers the potential to reinvent their careers in ways that increase their value to the organisation and the broader talent market.
Knowledge management: Creating context for a connected world. The power of people and machines working together offers the greatest opportunity for creating knowledge in human history. Advanced technologies are now able to automatically index, combine, tag, and organise information across multiple platforms. But to capitalise on these tools, organisations should also address the human element by creating a culture that helps people recognise that sharing their knowledge—contributing to personal and organisational reinvention—increases their value to the organisation, ultimately offering them a greater sense of security at work.
Beyond reskilling: Investing in resilience for uncertain futures. Renewing workers’ skills is a tactical necessity, but reskilling is not a sufficient path forward by itself. Organisations should consider an approach that treats workforce development as a strategy for building worker and organisational resilience—equipping workers, and thus the organisation, with the tools and strategies to adapt to a range of uncertain futures in addition to reskilling them for near-term needs. Through a resilience lens, reinvention shifts from something that may threaten worker security to the very thing that defines it: Workers who are able to constantly renew their skills and learn new ones are those who will be most likely to find employment in today’s rapidly shifting job market.
Organisations that view uncertainty as offering possibilities rather than threats can position themselves to take decisive action to shape an unknown future. There are three areas where organisations should move boldly ahead to create a future in which all stakeholders can thrive: Compensation, where taking a human-focused approach can help organisations meet emerging challenges; governing workforce strategies, where asking and answering new questions can help guide better strategic decisions; and ethics and the future of work, where organisations should examine their actions’ ethical implications to maintain their license to operate in a more transparent world.
The compensation conundrum: Principles for a more human approach. Considering how much time and money organisations spend on compensation strategies, processes, and programmes, any change to compensation practices represents a significant decision. Yet many organisations are stuck in a seemingly endless cycle of compensation reviews, reforms, and rollouts. To take bold action in the face of uncertainty, organisations need a new path forward that is anchored not only in data and benchmarks, but also in a set of human principles that reflects the fact that compensation is more than a set of numbers—it’s a reflection of how organisations value individuals and how individuals value organisations.
Governing workforce strategies: New questions for better results. As workforce strategies have evolved over the past decade, workforce metrics and governance have not kept pace. Today, organisations need forward-looking insights on every trend shaping human capital. Organisations should begin to ask fundamentally new questions that can inform bold decisions around critical human capital risks and opportunities, even as uncertainty about the future of work, the workforce, and the workplace persists.
Ethics and the future of work: From “could we” to “how should we.” As the future of work rapidly evolves and organisations integrate people, technology, alternative workforces, and new ways of working, leaders are wrestling with an increasing range of ethical challenges. These challenges are especially pronounced at the intersection between humans and technology. In the face of increasing ethical challenges, organisations should make intentional and bold choices. Those choices need to be framed by a change in perspective: a shift from asking only “could we” to also ask “how should we” when approaching new ethical questions.
For the last chapter of this year’s report, we address HR directly. As the fusion of humans and technology at work accelerates, the future of HR is one of expanded focus and extended influence. HR should look to broaden its focus from employees to the organisation and to the entirety of work and the workforce. And HR should increase its sphere of influence beyond the traditional lines of the function to the enterprise and to the business ecosystem as a whole.
The attributes of purpose, potential, and perspective are admittedly complex. Organisations have tended to view the conflicts within each as trade-offs: belonging or individuality, security or reinvention, boldness or uncertainty. But part of embracing the seeming paradox of fusing the technological with the human is to look beyond trade-offs to find ways to integrate these seemingly opposed pairs. In each of the following chapters, we show how organisations can work within an environment shaped by the fusion of technology and people to embed purpose, potential, and perspective into the DNA of how they operate. For the power of the social enterprise lies in its ability to bring a human focus to everything it touches, empowering people to work productively with technology to create lasting value for themselves, their organisations, and society at large.
Deloitte's Human Capital professionals leverage research, analytics, and industry insights to help design and execute the HR, talent, leadership, organisation, and change programmes that enable business performance through people performance.