Everyone talks about the future of work like it’s the next scary thing coming for us after the zombies have left. And that may be true (well, not the zombie part), so this short report can help you frame what you should be concerned about.
Working with the Economist Intelligence Unit, the SHRM Foundation identified 5 trends that their research shows are impacting the world of work:
Loss of middle-skilled jobs
Skills gap: disconnect between educational standards and organizational demand
Eroding physical barriers and increased globalization
New models of work: crowdsourcing
Taken individually, none of these trends are surprising, right? But taken together, they create a set of concerns that keep most C-suite leaders, as well as their HR colleagues, up at night.
I believe that the most impactful of the five trends is number 3: the skills gap. The growing disconnect between employer skills needs and output from the global education system is already impacting small, medium, and large employers everywhere in the world. The other four trends just make things even more challenging.
Take a look at the report. It’s a quick read and will put the whole “future of work” discussion into a helpful context.
I’m a big fan of the SHRM Foundation. The resources they put in the hands of HR professionals all over the world are impressive. They do this by funding academic research in areas of interest to HR and business leaders, they provide scholarships for HR professionals to further their professional development and credentials, and they partner with organizations like The Economist Intelligence Unit to provide deep dives into the most pressing people issues of the day. I like that. A lot.
Disconnect between educational standards and organizational demand
Services sector on the rise globally at the expense of agriculture and industry
Technology transforms workforce composition and culture
Wage expectations conflict with increased focus on shareholder value
Inequality on the rise as technology decimates the mid-skilled tier
Companies balance pros and cons of investment in new regions of development
The discussions in this 48 page report are fascinating and cover a lot of ground. Each topic has graphs from a multitude of sources – if you just read the graphs you’d start to develop a new awareness of the global challenges we face in providing sustainable people strategies for our organizations. This one tells a pretty interesting story:
Another one that takes an interesting look at global competitiveness – and perhaps an outcome of the chart above – is here:
I encourage you to pull down this report. It’s a little more than a year old, but it highlights the global issues with which organizations are grappling. HR professionals need to have meta data like this top of mind. Whether you’re leading HR in a one-location organization, or an HR team member in a large, global organization – work is changing. And workers are really changing. And some of the reasons they are changing have to do with what’s happening in other places in the world. It’s not enough any more to only know what the trend data are for your pocket of the world. We – especially HR professionals – need to understand all the levers that are pushing on our people, our industry and our work. This report could assist in developing a broader understanding of why this is important.
A recent study by the Economist Intelligence Unit, sponsored by SAP and SuccessFactors, explores the challenges of managing an increasingly diverse workforce while highlighting the importance of diversity as a strategic business advantage. The global study, Values-based Divesity, surveyed 228 executives responsible for designing and developing their organization’s human resources strategy, where 53% of respondents were very senior – either CEO’s or board members. As the study explains, many diversity initiatives in the last two decades involved a focus on demographic factors, such as gender and race, or “inherent” diversity. Today there is a wider awareness that the diversity focus should also consider values like cultural fluency, global mindset, language skills etc., or “acquired’ diversity. This shifting awareness, represented in EIU’s survey results, appears to represent a wider shift in organizational perception of diversity.
When respondents were asked about the primary benefits of a diverse workforce 83% of executives reported that a diverse workforce improves their firm’s ability to capture and retain a diverse client base; 82% agreed that a strategic approach to managing diversity can help access a rich talent pool; and 80% viewed diversity management as yielding a competitive advantage in labor markets. While the case for diversity has changed over the years, from a social initiative (it’s the right thing to do) to a strategic argument for supporting and creating new innovation, the bottom line remains the same – it’s always been about business success and competitive market advantage. With the increasingly diverse and multigenerational workforce that exists today however, certain organizational strategies will require greater adjustment. According to the EIU study, the top workforce characteristic that will require the greatest change in HR strategies over the next three years (cited by 57% of executives) was a “lack of interest in assimilating organizational values” followed by “conflicting values of a multi-generational workforce” (51%) and thirdly “educational differences among employees” (50%).
Given the strategic benefits of a diverse talent pool cited by executives, what strategies are organizations using to support and engage diverse talent? The top four strategies listed by respondents focused almost exclusively on learning and development: “mentoring of new and high potential employees”, “exposing high potential employees to diverse business situations”, “opportunities for international careers”, and “opportunities for diverse teams to address strategic business challenges”. When asked about the technologies used to manage diverse workforces, 35% of respondents cited human resources information systems (HRIS) as the highest adopted technology, followed by e-learning systems at 31%, and videoconferencing at 25%. Interestingly given the amount of hype and energy around social media, the adoption of enterprise social networks as a means to manage a diverse workforce was low, with only 20% of respondents reporting this as an adopted tool.
The data from this report clearly indicates that executives recognize the importance and benefits of having a diverse workforce, but also recognize that maximizing the potential of a diverse talent pool requires a strategic approach. Whether this approach means augmenting previous diversity initiatives, or developing new strategies altogether, approaches will likely be specific to each organization and the level of understanding and commitment by its leaders. The information does suggest that this will be an area of focus for many organizations now and into the future as the workforce becomes more globally mobile, multi-generational and flexible.
The survey – conducted in May 2012 – included 235 C-level executives, 134 of whom are CEOs. A total of 38 countries were represented from North America (47%), Western Europe (40%), Eastern Europe (8%) and the Middle East (4%). A range of industries were included and half of the companies had $500 million or more in annual revenues. Additionally, 6 in-depth interviews were conducted with 4 CEOs and 2 respected academics.
While the Economist Intelligence Unit authors tried to spin the results in a positive way, there’s just no getting around the conclusion that even big company CHROs are having a hard time getting access to the strategic business discussions at the top of their organizations. While 76% of the surveyed CEOs say their relationship with the head of HR is close and trustful, only 55% report that the head of HR is a key player in strategic planning.
What I found really interesting was the perception by the authors that the way to greater inclusion in strategic decision making is to become “a confidante and informal executive coach” to the CEO. “If the CEO has repeatedly relied on the head of HR for certain important matters, and they still see eye to eye, he or she is more likely to invite the HR head to participate in other areas as a matter of course.” So, developing a personal, “therapeutic” relationship with the CEO is the first best practice the report’s authors recommend. But you’re doomed, I guess, if you don’t see eye to eye.
Becoming liked and trusted by the CEO is the way forward to weighing in on strategic business decisions. This, despite the finding that 50% of the surveyed CEOs spend 5 hours or less a month – in either one-on-one or group settings – with their head of HR. I wonder how you figure out if you even see eye-to-eye in less than 5 hours a month.
The report has lots of interesting – and depressing – data, and you should probably take a look. But I think this gets filed under: Duh!
The Economist Intelligence Unit’s bottom line appears to be that CHROs whose CEOs like them get more involvement in the business. I hope IBM and Oracle didn’t spend big bucks on this research.
*Here’s Sally Field’s famous Oscar acceptance speech:
71% of employees exceeded performance expectations, compared to 14% of Laggard organizations
85% of 1st choice candidates accepted an offer, compared to 8% of Laggards
72% of employees rated themselves highly engaged, compared to 9% of employees of Laggard organizations
Most of the statistics we see about the value of engagement focus on tying engagement scores to financial outcomes. No question: we need that. Data about the outcomes of engagement are helpful in building business cases for investing in the employee experience.
But tying other types of outcomes to higher engagement scores can also be helpful – like the number of 1st choice candidates accepting employment offers. If a talent shortage truly is the number 1 concern of CEOs and their boards around the world, as the latest Lloyd’s Risk Survey suggests, then strategies that effectively raise the likelihood of securing the top talent you go after should be of interest. And it makes sense that A+ talent likes to affiliate with other A+ talent.
And connecting the dots between engagement outcomes and high levels of individual employee performance also makes sense. I’ve long wondered at the value of trumpeting the engagement scores of every employee — when we all know that it’s the most effective employees’ opinions we care most about. Linking employee performance and engagement scores makes a great deal of sense to me.
Take a look at the report. I think you’ll find the data extremely useful.