Unveiling the Top 3 Human Capital Trends for 2017

March 14, 201710:55 am751 views

In Southeast Asia, Talent Acquisition, Organization of the Future and Careers & Learning has emerged as the top 3 human capital trends for 2017. This is according to Deloitte’s annual Human Capital Trends report, titled “Rewriting the rules of the digital age”.

“We live in a digital first world and the impact of that is being felt by organizations here in Southeast Asia. HR professionals and business leaders are trying to make meaning of the ever accelerating digital challenges and manifestations,” said Mark Maclean, Deloitte Southeast Asia, Human Capital Consulting Leader.

Leadership continues to be a key priority for organizations. With the transition into digitalization, high-performing leaders today need different skills and expertise than in generations past, yet most organizations have not moved rapidly enough to develop digital leaders, promote young leaders, and build new leadership models.

The results from Southeast Asia show that even though 87 percent of the respondents feel that digital and transformational leadership is important, only 5 percent have a strong digital leadership development program. 12 percent of the respondents indicate that they did not have any significant program in place.

“The demands on leadership have increased remarkably in a relatively short period of time. Leaders are now being asked to lead within the context of digital disruption, changing employee demographics, and changing contours of the external geo political world. Leaders now have to change across three dimensions – Cognitive, Behavioural and Emotional often with very little support within their respective organizations,” said Pushp Deep Gupta, Executive Director, Deloitte Southeast Asia Human Capital Consulting.

According to this year’s report, HR and talent management professionals need to embrace digital and reinvent their strategies to be in tandem with the speed, with which the twenty-first century workforce is changing and evolving.

It appears that HR and talent management professionals in Southeast Asia have some way to go in this regard. While 64 percent respondents acknowledge that HR should be involved as an advisor in some way, as their organizations move towards augmenting the talent pool with robotics, cognitive tools and AI systems, none of them think that HR should be leading the effort.

36% feel that HR should be minimally involved at most. “HR has forever been asked to align itself to the business agenda of their respective organizations. Now there is an additional set of challenges and demands act with agility, build digital mindset and showcase 10X thinking,” said Mark.

Only 11 Percent Global Companies are prepared to build the Organization of the Future 

Driven by the ongoing digital revolution and demographic, political, and social forces, globally almost 90 percent of HR and business leaders rate building the organization of the future as their highest priority.

In the 2017 Global Human Capital Trends report, Deloitte issues a call-to-action for companies to completely reconsider their organizational structure, talent and HR strategies to keep pace with digital disruption.

“Technology is advancing at an unprecedented rate and these innovations have completely transformed the way we live, work and communicate,” said Josh Bersin, principal and founder, Bersin by Deloitte, Deloitte Consulting LLP. “Ultimately, the digital world of work has changed the rules of business.  Organizations should shift their entire mind-set and behaviours to ensure they can lead, organize, motivate, manage and engage the 21st century workforce, or risk being left behind.” 

With more than 10,000 HR and business leaders in 140 countries weighing in, this is Deloitte’s largest and most extensive Global Human Capital Trends survey to date. The hallmark study in its fifth year, reveals that leaders are turning to new organization models, which highlight the networked nature of today’s world of work.

However, as business productivity often fails to keep pace with technological progress, the survey finds that HR is struggling to keep up, with only 35 percent HR professionals rating their capabilities as “good” or “excellent.”

“As technology, artificial intelligence, and robotics transform business models and work, companies should start to rethink their management practices and organizational models,” said Brett Walsh, Global Human Capital Leader, Deloitte Global.  “The future of work is driving the development of a set of ‘new rules’ that organizations should follow if they want to remain competitive.” 

Building the organization of the future demands a team approach and talent-centric focus

As the workforce evolves, organizations are focusing on networks of teams, and recruiting and developing the right people is more consequential than ever. Survey respondents point to talent acquisition as one of the biggest issues organizations face, with 81 percent companies citing it as “very important” or “important.”

However, while Deloitte finds that cognitive technologies have helped leaders bring talent acquisition into the digital world, only 22 percent of survey respondents describe their companies as “excellent” at building a differentiated employee experience once talent is acquired.

See: A Tripartite Initiative to Develop Human Capital for the Future: HCP Programme

In fact, the gap between talent acquisition’s importance and the ability to meet the need increased by 14 percentage points over the last year. It is critical to take an integrated approach to building the employee experience, with a large part of it centering on “careers and learning,” which rose to second place on HRs’ and business leaders’ priority lists, with 83 percent of those surveyed ranking it as “important” or “very important.”

Deloitte finds that as organizations shed legacy systems and dismantle yesterday’s hierarchies, it’s important to place a higher premium on implementing immersive learning experiences to develop leaders who can thrive in today’s digital world and appeal to diverse workforce needs.

The importance of leadership as a driver of the employee experience remains strong, as the percentage of companies with experiential programs for leaders rose by nearly 20 percentage points from 47 percent in 2015 to 64 percent this year. However, today there is still a crucial need for stronger and different types of leaders, particularly as today’s business world demands those who demonstrate more agile and digital capabilities.

Organizations should capitalize on digital HR

As organizations become more digital, leaders should consider disruptive technologies for every aspect of their human capital needs. Deloitte finds that 56 percent companies are redesigning their HR programs to leverage digital and mobile tools, and 33 percent are already using some form of Artificial Intelligence (AI) applications to deliver HR solutions.

“HR and other business leaders tell us that they are being asked to create a digital workplace in order to become an ‘organization of the future,’” said Erica Volini, principal, Deloitte Consulting LLP, and national managing director of the U.S. human capital practice. “To rewrite the rules on a broad scale, HR should play a leading role in helping the company redesign the organization by bringing digital technologies to both the workforce and to the HR organization itself.”

The survey found, that the HR function is in the middle of a wide-ranging identity shift. To position themselves effectively as a key business advisor to the organization, it is important for HR to focus on service delivery efficiency and excellence in talent programs, as well as the entire design of work using a digital lens.

Organizations should better understand their employees

The trends in this year’s report show signs of reinvention on all fronts, including jobs themselves. Organizations should approach external talent, robotics, cognitive tools, and AI systems as the “new, augmented workforce.”

This year, 41 percent of respondents reported having fully implemented or having made significant progress in adopting cognitive and AI technologies within their workforce. But, only 17 percent of global executives report they are ready to manage a workforce with people, robots, and AI working side by side — the lowest readiness level for a trend in the five years of the Global Human Capital Trends survey.

While many jobs are being reinvented through technology and some tasks are being automated, Deloitte’s research shows that the essentially human aspects of work – such as empathy, communication, and problem solving are becoming more important than ever.

This shift is not only driving an increased focus on reskilling, but also on the importance of people analytics to help organizations gain even greater insights into the capabilities of their workforce on a global scale.

However, organizations continue to fall short in this area, with only 8 percent reporting they have usable data, and only 9 percent believing they have a good understanding of the talent factors that drive performance in this new world of work. “This represents one of the biggest opportunities for the HR organization,” said Volini. “To be able to rewrite the rules, HR needs to prove it has the insights and capabilities to successfully play outside the lines.”

Also read: Q&A with Kara Walsh, Chief Human Capital Officer, Unit4: Truly “In Business for People”

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