HR TRENDS: REWRITING THE RULES FOR THE DIGITAL AGE

The accelerating rate of change in business, the economy, and society challenges both business and HR to adopt new rules for leading, organising, motivating, managing, and engaging the 21st-century workforce.

The 2017 Deloitte Global Human Capital Trends report reflects seismic changes in the world of business. This new era often called the Fourth Industrial Revolution or the Big Shift has fundamentally transformed business, the broader economy, and society.

A principal characteristic of the new era is not merely change but change at an accelerating rate, which creates new rules for business and for HR. These shifts have changed the rules for nearly every organisational people practice, from learning to management to the definition of work itself.

The trends in this year’s report identify ten areas in which organisations will need to close the gap between the pace of change and the challenges of work and talent management.

2017 trends by importance are:

Trend 1. The organisation of the future: Arriving now

Given the pace of change and the constant pressure to adapt, it is not surprising that executives identified building the organisation of the future as the most important challenge for 2017. In this year’s survey, nearly 60 percent of respondents rated this problem as very important, and 90 percent rated it as important or very important. This level of interest signals a shift from designing the new organisation to actively building organisational ecosystems and networks. Agility plays a central role in the organisation of the future, as companies race to replace structural hierarchies with networks of teams empowered to take action.

Trend 2. Careers and learning: Real-time, all the time

The concept of a “career” is being shaken to its core, driving companies toward “always-on” learning experiences that allow employees to build skills quickly, easily, and on their own terms. This year, careers and learning rose to second place in rated importance, with 83 percent of executives identifying these issues as important or very important. At leading companies, HR organisations are helping employees grow and thrive as they adopt the radical concept of a career described in “The 100-Year Life”. New learning models both challenge the idea of a static career and reflect the declining half-life of skills critical to the 21st-century organisation.

Trend 3. Talent acquisition: Enter the cognitive recruiter

As jobs and skills change, finding and recruiting the right people becomes more important than ever. Talent acquisition is now the third-most-important challenge companies face, with 81 percent of respondents calling it important or very important. The chapter on talent acquisition highlights how leading organisations use social networking, analytics, and cognitive tools to find people in new ways, attract them through a global brand, and determine who will best fit the job, team, and company. A new breed of cognitive technologies is radically transforming recruiting, which stands at the early stages of a revolution.

Trend 4. The employee experience: Culture, engagement, and beyond

Culture and engagement are vital parts of the employee experience, and leading organisations are broadening their focus to include a person’s first contact with a potential employer through recruitment and beyond. Today, companies are looking at employee journeys, studying the needs of their workforce, and using net promoter scores to understand the employee experience. Workplace redesign, well-being, and work productivity systems are all becoming part of the mandate for HR.

Trend 5. Performance management: Play a winning hand

For the last five years, companies have been experimenting with new performance management approaches that emphasise continuous feedback and coaching, reducing the focus on appraisal. This year, companies are moving beyond experimentation to deploy new models on a wide scale. Even though HR technology tools have not quite caught up, new approaches to performance management are working, and they are increasing productivity and changing corporate culture.

Trend 6. Leadership disrupted: Pushing the boundaries

As companies transform and digital organisational models emerge, leadership needs change as well. Eighty percent of our respondents say that leadership is an important issue, and 42 percent call it very important. Organisations are clamouring for more agile, diverse, and younger leaders, as well as new leadership models that capture the “digital way” to run businesses. While the leadership development industry continues to struggle, companies are pushing the boundaries of their traditional leadership hierarchies, empowering a new breed of leaders who can thrive in a rapidly changing network.

Trend 7. Digital HR: Platforms, people, and work

As the enterprise as a whole becomes digital, HR must become a leader in the digital organisation. This means going beyond digitising HR platforms to developing digital workplaces and digital workforces, and to deploying technology that changes how people work and the way they relate to each other at work. Fortunately, the path to digital HR is becoming clearer, with expanded options, new platforms, and a wide variety of tools to build the 21st-century digital organisation, workforce, and workplace.

Trend 8. People analytics: Recalculating the route

Data about people at work has become more important than ever, but the focus of people analytics has changed. Formerly a technical discipline owned by data specialists, people analytics is now a business discipline, supporting everything from operations and management to talent acquisition and financial performance. Readiness to capitalise on people analytics remains a challenge, however. Only 8 percent of organisations report they have usable data, while only 9 percent believe they have a good understanding of the talent factors that drive performance.

Trend 9. Diversity and inclusion: The reality gap

Fairness, equity, and inclusion are now CEO-level issues around the world. Executives can no longer abdicate diversity strategies to the CHRO or chief diversity officer. A new focus on accountability, data, transparency, and “diversity through process” is driving efforts around unconscious bias training and education throughout the business community. Despite these efforts, however, we see a reality gap. Issues around diversity and inclusion continue to be frustrating and challenging for many organisations.

Trend 10. The future of work: The augmented workforce

Robotics, AI, sensors, and cognitive computing have gone mainstream, along with the open talent economy. Companies can no longer consider their workforce to be only the employees on their balance sheet but must include freelancers, “gig economy” workers, and crowds. These on- and off-balance-sheet workers are being augmented with machines and software. Together, these trends will result in the redesign of almost every job, as well as a new way of thinking about workforce planning and the nature of work. Change is already taking place: In this year’s survey, 41 percent of our respondents have either fully implemented or made significant process in adopting cognitive and AI technologies, and another 35 percent report pilot programs.

 

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THE REPORT*

The 2017 survey Deloitte’s largest and most extensive to date, with input from more than 10,400 business and HR leaders across 140 countries. Twenty-two percent of respondents were from large companies (more than 10,000 employees), 29 percent from medium-sized companies (1,000–10,000 employees), and 49 percent of small companies (fewer than 1,000 employees). Respondents from the Americas accounted for 31 percent of the total; Europe, Middle East, and Africa contributed 51 percent, and Asia Pacific 18 percent. Respondents represented a broad cross-section of industries, including financial services; consumer business; technology, media, and telecommunications; and manufacturing. Sixty-three percent of the respondents were HR professionals, with other business executives comprising 37 percent. C-level executives accounted for 30 percent (more than 3,100) of the respondents.

 

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