Global organisations not agile enough to face change and digitisation

07 July 2017 7 min. read

Executives’ plans for redesigning their organisations to compete in a digital age do not effectively fold HR into the strategic process, according to new research. Unprepared leaders are currently juggling the demands of the C-suite and employee expectations in a rapidly changing workplace. Digital transformation meanwhile ranked lowly on HR professionals’ priorities in stark contrast to executives keen to harness new technologies to boost their companies and employee productivity.

With competition for talent on the rise as new competitors emerge across international markets, companies are overhauling their approach to talent strategies in the face of an “age of disruption.” According to Mercer’s 2017 Global Talent Trends Study, 93% of worldwide organisations worldwide report they are planning to redesign their structure in the next two years, yet only 4% of business executives would call their organisation “change agile.”

The consulting firm’s study, based on the input of more than 1,700 HR professionals, 5,400 employees, and 400 business executives from 37 countries and 20 industry sectors, shares insights from over 7,000 perspectives overall, comparing the views of senior business executives, HR leaders, and employees from businesses around the world. Examining top trends which are currently impacting today’s workforce and how organisations are responding, the report uncovered four patterns that are shaping the outlook for this year.

Top 10 priorities for HR in 2017

The first of these intersecting points was the C-suite’s agenda to adapt their companies to survive the changing market and grow. This in turn leads to the second focal point, ramping up the quest for insight as analytics will be a key player in winning the war for talent. The other two broad areas included the shift in values, recognising what matters most to employees in order to drive change and growth, which again, executives need analytics to understand and work toward, along with the final goal of personalisation and flexibility in a company as a route to greater productivity.

The most notable revelation of Mercer’s study of global talent trends is that HR leaders do not presently have organisation or job redesign on their list of priorities for 2017, despite such a huge number of companies pushing up demand for it. While HR leaders do have the facilities to provide data analytics on attracting top talent externally, developing leaders for succession, and building skills across the workforce – these priorities do not align with most executive’s goals for more substantial workplace change present in Mercer’s sample.

Complacent HR leaders miss out

When it came to businesses maintaining current employees however, while 70% of HR leaders expressed confidence in talent management processes they utilised, just over a third of employees revealed plans to leave their current role over coming year, despite being satisfied with their present roles. Meanwhile, employees not planning to leave their current roles reported they were less “energised”, and subsequently less likely to thrive in a collaborative and innovative workplace. HR professionals viewed talent scarcity less acutely than business executives, with 43% expecting a significant increase in competition compared to 34%, further illustrating a mismatch between HR and executive priorities.

What makes a unique and compelling EVP

According to Kate Bravery, Global Practices Leader for Mercer’s Career business, “Organisations need to prioritise a culture of agility to stay ahead of rapidly changing market trends.” In a statement following the release of Mercer’s report, she also said, “Those employers that empower their workforce – by helping them plan for the unknown, mitigate risk, and thrive at work – will be more successful in building a responsive and successful organisation.”

Many divides

HR leaders current misalignment with what executives need is something of a missed opportunity in this case. During potentially lengthy and complex periods of restructuring then, maintaining experienced employees to maintain a level of continuity is paramount. Mercer’s survey demonstrates the biggest priorities for employees in order to remain at a company, with the highest number of global workers interviewed suggesting their situation would improve with greater recognition for their efforts in their pay and compensation packages.

While a slim majority thought their companies already did reward hard work, around 97% of employees asked would like to be recognised and rewarded for their contributions to their employer’s financial results. While this ranked near the bottom of HR leaders priorities, it ranked top of employees wish-lists, above promotions (45%) and leaders who set a clear direction (44%) in terms of what would improve their working situation most.

Aspects employees believe will improve their work situation

This disconnect between employee goals and HR priorities was further echoed as 61% of employees globally ranked their health as more important than their wealth or career. A further 47% also indicated they expected their workplace to become more focused on employee health in the next few years. Health and wellbeing however ranked second to last on HR leaders’ list of top talent management priorities this year.

HR leaders were also shown lagging behind expectations of both executive leadership and employees. Only 5% of organisations considered themselves to be internal and external “digital organisations” today, while the largest minority of 31% found that they had “a long way to go” on both fronts.

61% of business executives believe technology at work, including automation, robotics, machine learning, and wearables, is the workforce trend likely to have the most impact on their organisations in the next two years, with increasing automation yielding a promise of opening up new markets to established businesses willing to brave digital disruption – however, only 35% of executives believe HR professionals provide a digital experience for staff. Less than half of such professionals meanwhile similarly prioritised digital transformation. For employees, meanwhile, just one in five organisations in Mercer’s study provided a digital experience for interacting with HR, while only 54% of employees have access to state of the art tools to supplement their training.

Where are you on the journey to becoming a digital organisation

“Despite the desire to cling to more traditional methods, the landscape for the workplace, the workforce, and the future of work are changing too quickly and drastically to do so,” said Bravery. “To stay competitive, it is imperative that business executives and HR leaders collaborate and that organisations take new approaches to how employees access knowledge, adapt to technology, manage, communicate, and leverage their careers.”