UK HR leaders key to avoid mismanaged one-size-fits-all restructuring

18 July 2017 Consultancy.uk

As business models are disrupted by technology and socio-demographic shifts, professional service firms specialising in HR management must bridge the gap between employees and executives for UK clients to avoid being left behind. According to the annual Global Talent Trends Study, the vast majority of organisations worldwide report they are planning to redesign their structure in the next two years, however executives who seek analytics to boost employee engagement in changing companies are largely let down by HR specialists.

According to a recent survey, the future prosperity of British business rests in the hands of employees, with HR leaders and c-suites divided as to whether they should overhaul companies to adapt amid an increasingly disruptive global market. Mercer’s recent Global Talent Trends report derives insights from over 7,000 world-wide perspectives, comparing the views of senior business executives, HR leaders, and employees from organisations around the world. The 2017 report assesses significant gaps in alignment, identifies several critical disconnects concerning change, and makes recommendations to capture growth.

Recent years have seen business model disruption leading to a boom in demand for restructuring services, with analysts believing an “age of disruption” will cause up to 80% of Fortune 1000 corporations to be replaced, as new smaller competitors better more suited to the times, may mean that an incumbent company becomes stressed, and, given enough change within its ecosystem, may fall into a full blown crisis. Subsequently, HR leaders are required perhaps more than ever before by global companies to help aid shifts within established firms.

Unique views from around the world

Most notably, despite 93% of organisations’ plans to transform themselves in the next two years, HR leaders do not have organisation or job redesign on their list of priorities for 2017. In the UK, businesses are noted as being particularly divided, as while many businesses eye performance ratings as a way to increase efficiency, researchers cite British respondents as being the most content with the status quo of workplace compensation in the world, along with Japan and China, leaving employees at odds on whether their businesses should change by adopting controversial performance ratings.

While companies stated this was a better way to set base rates for salaries in order to maximise the returns they can make on the labour of their employees, the method could also lead to greater employee attrition as staff double-down to insulate themselves from falling base pay. However, with over 88% of the global survey stating they had already implemented this sort of measure, it may well be that UK HR departments begin a full roll-out of this kind of contract in order to maintain their edge, particularly as competitive labour markets in Asia including India see employees contrarily hungry for feedback and performance ratings from employers.

According to Mercer’s analysts, while increasing efficiency remains the number one aim of design changes in the majority of countries studied including the UK, and performance ratings would indeed be aimed toward such a target. However, alongside workers from Australia, Canada and Hong Kong, the top suggestion for improvement from UK employees surveyed was for leaders to set clearer priorities. This contrasts with a vague drive for constantly improved efficiency, suggesting the onus is on higher management to make plans clear for workers, to enable them to better meet demand.

What would make a positive impact to their work situation?While for employers in Germany, France and others, work ratings might improve performance, as 47% of employees there suggested fair and competitive compensation would improve their performance, global firms operating in multiple countries should beware implementing a one-size-fits-all solution when it comes to overhauling a UK-based operation.

Mercer’s paper cites top executives and HR managers of organisations often taking a disconnected “world is flat” view of the universe in this manner, suggesting that decision-making regarding a company’s change might do well to listen to thoughts further down the company chain. As the people who deal with the day-to-day running of the company, employees are best placed to pick out the day-to-day areas of weakness of the business.

Talent Mismatch

Behind this chasm in executive and employee goals, Mercer argue that a mismatch in talent analytics from HR leaders must be improved if companies are to effectively engage their workforce in pivotal decision making. One example pointed to by the report is that executives say understanding the key drivers of workplace engagement would be the key insight to adding value to their business, however just 35% of HR leaders were actually able to provide this information.

The gap in executives’ demand for data types, and the types actually provided by HR globally led to large disparities. HR professionals were capable of providing exponentially more data on why employees join a company than executives actually required, while the reverse was true of team performance, and who was likely to leave a company for which reason.

Mismatch in talent analytics

The outlook for the UK in this case is promising however. While the global figures suggest this gap as a major concern, UK HR professionals, along with those based in Canada and France, cited a capability for data analytics and predictive modelling as one of the top three in demand skills for the coming 12 months. This suggests British HR consultants are anticipating having to decrease this gap in outlooks between employees and executives quickly to help clients best add value to their companies.

 “In an age where digitisation, robotics, and AI are wreaking havoc with traditional business models, it is easy for executives to focus on superior technology as the solution to ensuring the competitiveness of their organisations and to overlook the human element,” said Ilya Bonic, President of Mercer’s Career business. “Growth rests on engaging and empowering today’s workforce in ways that we are just beginning to uncover. It takes employees armed with the right skills and opportunities to develop innovative solutions to advance the business and themselves.”

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