In the new world of work, HR needs to be one of expanded focus and extended influence.
According to Deloitte's 10th annual 2020 Global Human Capital Trends report, while HR has managed to make a difference over the past 10 years, progress cannot stop here.
Despite 65% of global respondents reporting that HR has made progress over the past decade, respondents still reported a 64-point gap between importance and readiness. Further, while 75% said the evolving role of HR was important or very important for their success over the next 12 to 18 months, only 11% said they were ready to address this trend.
The fundamental question the Deloitte report posed is: Given the growing importance of the human element at work and the continued gap in HR readiness, will HR remain as a distinct function, or has 10 years of progress been overshadowed by a persistent view that HR may never get there, signalling the end of HR as we know it?
On the bright side, 93% of respondents believe that HR will remain a distinct function over the next five years. At the same time, however, a majority (55%) believed that HR will substantially or radically change within the next 12 to 18 months.
So, there is no doubt that change is coming. But, how will that unfold?
Deloitte's analysts believe that the change needs to be more than a transformation, reinvention, or revolution. Instead, it will shake the foundation of HR.
The report titled “The social enterprise at work: Paradox as a path forward” recommends:
- Looking beyond reskilling and investing in resilience;
- Integrating technology and humanity and finding potential through its convergence;
- Providing workers with an increased sense of belonging through being a social enterprise;
- Viewing worker well-being as an organisational responsibility;
- Leaders must and should initiate and lead the dialogue around tech-related ethical concerns and the alternative workforce; and
- Closing the generational gaps through purpose.
These recommendations have been based on a mechanistic view with three fundamental assumptions:
- Work outcomes are stable (organisations know what they need to do and how to do it)
- Jobs are predictable (composed of fixed, task-based work)
- People are fungible (mechanised work enables most humans to do most jobs)
However, in the future of work, we can no longer ground HR in these assumptions, given they no longer hold. While the recommendations above may be the same, the outcomes HR is working towards will change.
Moving forward, as businesses evolve in the face of disruption and organisations realise that productivity has been flat and in decline, organisations will be forced to rethink outdated views and establish a new set of truths for the social enterprise at work:
- Beyond focusing on how to improve the way work is done today, organisations now need to first consider what work they should be doing tomorrow, putting work outcomes in a constant state of flux and work in a continuous state of reimagination.
- With work becoming less mechanic and work outcomes evolving, jobs have been increasingly fluid and dynamic, with some thought leaders believing that the end of jobs - fixed, task-based work - is near. This change will be accelerated as ways of working shift away from rigid reporting lines to networks of teams; from prescribed routines and job descriptions to expanded job canvases; and from narrow skills to broad capabilities.
- Humans need to be viewed not as interchangeable cogs in an organisation, but rather as individuals with unique and disparate experiences, thoughts, attitudes, needs, and ultimately, value. All this will make the management of the human element at work more important and complex than ever before.
As these truths change, for HR to keep its seat at the table, the function needs to change its foundation to one of expanded focus and extended influence.
Thankfully, HR is not about to fizzle out as a function, as 55% of respondents recognise this shift, indicating that HR will change substantially or radically over the next 12 to 18 months. An overwhelming majority (75%) thought that the change would be an expansion of HR's accountability.
HR needs to expand its scope of influence beyond the traditional lines of the function to the enterprise and ecosystem as a whole. It needs to broaden its focus from employees to the organisation and ultimately, to the work and workforce itself. In other words, this is a shift to "exponential HR".
Here's how this will look like in these seven areas:
- Building leadership skills
- Today's outcome: Building leaders with the skills required to fill current leadership pipeline roles.
- Tomorrow's outcome: Building leadership teams and capabilities for future and unknown opportunities that can lead through ambiguity and operate with an enterprise and ecosystem mindset.
- Upskilling the workforce
- Today's outcome: Delivering skills-based learning programmes for critical workforce segments.
- Tomorrow's outcome: Curating personalised and team-based learning experiences that build sustained capabilities relevant to the organisation and the broader ecosystem.
- Promoting teaming and agility
- Today's outcome: Experimenting with the use of teams across an established (often hierarchical or matrixed) organisation structure.
- Tomorrow's outcome: Embedding collaborative ways of working across the enterprise and the ecosystem, making teams the core unit of analysis and action for performance and management.
- Developing the workforce experience and brand
- Today's outcome: Implementing targetted employee experience programmes focused on reinforcing the internal workforce brand.
- Tomorrow's outcome: Designing an end-to-end human experience that integrates both the workforce and customer perspectives both internally and externally.
- Accessing new capabilities
- Today's outcome: Hiring new talent in accordance with business demand.
- Tomorrow's outcome: Creating on-demand access to capabilities (humans or machine) across the enterprise and the ecosystem.
- Integrating automation in the way work gets done
- Today's outcome: Introducing digital tools to increase the efficiency and effectiveness of HR-specific processes.
- Tomorrow's outcome: Digitising the flow of work across the organisation.
- Defining and promoting the organisation's purpose
- Today's outcome: Crafting and reinforcing mission and value statements/principles.
- Tomorrow's outcome: Engaging the workforce in continuously reimagining work to tie purpose to meaning - personal, organisational, and societal.
These shifts will require HR to make significant changes, with the top four being:
Increasing new capabilities (47%)
HR organisations can do this by adopting a new mindset - embracing new traits and behaviours that can help the enterprise to thrive in the digital age.
Change the HR organisation design to incorporate more agile and team-based work (45%)
This can be done by applying a new lens- adopting an operating model that enables HR to flex based on dynamic business needs.
Increase efficiency through which HR activities occur through automation (38%)
HR organisations can do this by adopting enablers - deploying advanced tech to promote productivity and value, and simplifying the experience.
Expand the expectations and stature of HR leaders (24%)
HR leaders can do this by elevating their focus - driving tangible, measurable value across the enterprise.
No change comes without challenges. Similarly, to move in this direction, HR needs to address two key barriers - the way in which HR is typically structured, and HR's general lack of alignment with the areas where the biggest business impacts can be made.
Despite clear signs that structural changes may be required, 42% believe that the structure of HR should remain aligned to HR functional areas.
When it comes to HR's alignment to the business, critical gaps were identified. While developing leaders, upskilling the workforce, and promoting teaming were the top three areas where respondents thought HR could make the greatest impact, two of these three areas - leadership and teaming - scored the lowest in terms of perceived readiness. This shows that a more in-depth look at the prioritisation of HR's work and effort is needed.
Despite the barriers, the shift to exponential HR is already underway in a number of organisations.
In the coming decade, HR's expanded role makes the function a vital enabler of an organisation's ability to thrive in a world where the old rules of work no longer apply, and the new ones are evolving rapidly. For future-focused organisations seeking to make the most of human capital in today's dynamic environment, exponential HR, focused on humanising the world of work, will be a key source of strength.
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