New research reveals how organizations can keep up with the evolving workplace.
By Bill Pelster
The pace of technology is at odds with the traditional organizational structure. One-hundred-year-old industrial models and rigid hierarchies can no longer accommodate the rapid pace in which technology is upending businesses. Siloed departments are increasingly giving way to cross-functional, project-oriented teams as digitization demands agility and collaboration. Individuals are relatively quick to acclimate to technological advancements, but are companies prepared to do what it takes to adapt and remain competitive?
Deloitte’s 2017 Global Human Capital Trends Report captures the degree to which companies feel unprepared for the future of work. Marking the fifth anniversary of Deloitte’s annual deep dive into workforce challenges, this year’s report revealed that while 88 percent of surveyed executives understand the urgent importance of restructuring for the future, only 11 percent feel prepared to take action.
Having tracked workforce trends and challenges for the last five years, Deloitte releases this year’s report as a call to action that reflects the shifts in mindset and behavior that are required to manage the 21st-century workforce. Organizations can keep pace and make strides by keeping an eye on these three trends:
Structure is everything. Organizational restructuring came in as a top trend. The research found that companies feel 31 percent “less ready” to redesign their organization around digital business models this year than they did in 2016. Given that technological advancement shows no signs of slowing down, this increasing level of unpreparedness is alarming.
This data reveals that HR departments are struggling to wrap their arms around solutions. To better equip themselves to build the organization of the future, companies should:
• Shift to team-centric structures. Dismantle traditional hierarchies that mire organizations in process and bureaucracy. Instead, structure teams that are nimble and project-based. Because only 6 percent of respondents consider themselves agile, restructuring will be critically important.
• Get a handle on internal structures. Only 9 percent of respondents truly understand how their internal organization’s network works. Companies that are unclear about their networks should strongly consider using software and tools to analyze the communication patterns within their workforce to determine synergies and connectivity. This kind of data allows leaders to see quickly what networks are in place and identify the connectors and experts.
• Consider new communication tools. Approaches that complement teaming efforts are especially helpful. New technologies allow for cross-functional communication that mirrors the way work is getting done.
• Put employees on a pedestal. To operate effectively in a digital ecosystem, organizations should approach human capital strategies with an employee-centric approach. Four out of the five most important trends in this year’s report focus on the employee experience in a meaningful way. From talent acquisition to performance feedback, leading organizations are increasingly relying on sophisticated technologies that source new talent pools, eliminate unconscious bias, and keep employees engaged in the business. In today’s competitive talent pool, companies should make every effort to leverage the technology at their fingertips. How can HR improve the employee experience?
• Incorporate learning and development as a career strategy. Careers today look nothing like they did in the past. Shorter tenures and evolving skill-development needs mean that companies should shift their career models. In fact, the Deloitte research indicates that 83 percent of respondents consider career models, and by extension, learning and development, to be of critical importance. Operating in a proactive way, companies can use new learning experience software and utilize metrics measurement to track progress and skills development.
• Leverage the latest technologies to attract the best talent. Utilize the latest cognitive recruiting technologies to optimize source channels. Explore the latest gaming and video interviewing tools to attract the right talent and showcase a savvy brand to potential candidates.
• Put a high premium on digital leadership. Most organizations have not moved rapidly enough to develop digital leaders, promote young leaders, and build new leadership models. Only 5 percent have strong digital leadership development programs today, and 65 percent have no significant program to drive digital leadership skills. Leading companies are rethinking their digital leadership model and identifying young, innovative, risk-taking employees and putting them on the fast track to leadership.
• Capitalize on digital HR for the future of work. Today’s world of work demands digital HR capabilities. To manage the workforce of the future, HR is going through an identity shift. HR leaders are being pushed to take on larger roles in helping to drive the organization to “be digital.”
This year, 41 percent of companies reported that they have fully implemented or made significant progress in adopting cognitive and artificial intelligence (AI) technologies within their workforce. Thirty-three percent of surveyed HR teams are using some form of AI technology to deliver HR solutions, and 41 percent are actively building mobile apps to deliver HR services. Only 15 percent of global executives, however, report they are ready to manage a workforce with people, robots, and AI working side by side—the lowest readiness level for a trend in the five years of the survey. Companies should:
• Make innovation a core strategy within HR. Become familiar with networked organization structures, organizational network analysis, and digital leadership models. Leverage cloud platforms, apps, analytics, and a range of tools for AI, case management, and other solutions.
• Invest in people analytics. Bring together a multidisciplinary team and integrate HR, organizational, and external data to provide insights that enable action.
• Treat robotics and automation as an opportunity. Leveraging AI for mundane tasks can free up employees for deeper, more strategic work. Companies should invest in the skillsets of their employees and redesign their approach to multiyear strategic and annual operational workforce planning accordingly.
The groundswell of the digital revolution has dislodged the workplace of the past, and companies must adjust their human capital strategies rapidly. Considering these workplace challenges through an organizational, employee-centric, and digital HR-focus, companies must throw out the old rulebook and use the technologies available now or risk losing the game.
Bill Pelster is principal of Deloitte Consulting LLP.