First of all there are a number of broad environmental trends to consider. These include:
- Organizations need to embrace openness, fuelled by collapsing boundaries, increased competitiveness and demanding customers.
- Career starters outnumbered by new retirees – in Germany for example there are now more retirees than career starters. This pattern of a greying population is present in both North America and Europe.
- More people working in part time jobs than 10 years ago – this is a combination of knowledge workers making choices about employment and liberalized labour laws making employment more flexible for employers.
- • Economy – the financial crisis and the downturn came as a shock to many people and there are still many who are uncertain about the future. In many cases employees are in a state of mourning co-workers who have been laid off through downsizing or re-structuring. Confidence is low.
There are five main trends that HR professionals should be reflecting on and considering if they have accommodated them in how they deliver within their own organisation. These trends were very well described by Rajeshwari Sharma who is Editor at the Society for HR Management India.
- Rise of the HR Business Partner
- Globalisation - One World, One HR
- Enhanced Employee Engagement
- HR and Technology
- HR Data and Analytics
The Rise of the HR Business Partner
CEO’s and senior managers expect HR to understand the business and partner with them to enable and execute the business’s strategic intent and strategic plans. This requires HR professionals having a very good understanding of business strategy and finance and their application to the company and it’s business model. HR must be able to facilitate the senior management determine a People Resource or People Management Strategy that will be required to realize the business strategy. HR can then use this to develop the HR strategy. Mark Thomas, International Consultant and author, often explains that “This step of defining the People Management Strategy is often forgotten by both Senior Managers and HR resulting in HR not having a clear specification from Senior Management on what they consider is needed in terms of people management to inform the HR strategy”.
In addition when working as a partner to the business does HR enable the business? This question was put very eloquently by J Craig Mundy, vice president of human resources and communications for the Climate Solutions sector of Ingersoll Rand, in a HBR blog post in 2012 when he said: “does it cause friction in the business or does it create flow? Friction is anything that makes it more difficult for people in critical roles to win with the customer. Flow, on the other hand, is doing everything possible to remove barriers and promote better performance.” As HR professionals are we thinking in terms of the impact we have on the business or in terms of technically and professionally good HR solutions?
Globalisation – One World, One HR
Larger companies are shifting to global operating models and small and medium sized companies are also re-structuring and re-aligning to leverage their resources in a better way in the face of tougher competition and declining margins. This presents many challenges including:
- How is the global business strategy developed and cascaded to local markets? Is it a combination of local market priorities or is it global priorities interpreted to local market conditions? How does HR cascade the global HR strategy including core elements of company culture, behavior and systems to local markets in a way that creates flow and not friction?
- What is very important in ensuring the relevance of global approaches is that local inputs are sought out to inform the global strategy and policy. The meeting I attended last week was a very good example of the HRVP actively seeking and listening to the informed opinions of his colleagues from around the world including North America, South America, Asia and Europe.
- Global leadership requires a leadership team reflecting global diversity. Often the leadership team reflects the geographical origin or base of the parent company and headquarters. Global thinking and acting companies need to foster a more diverse representation.
- Facilitating global collaboration. People need to be able to know which colleagues to get in touch with and be able to access them and work with them easily.
- For global operating models to work information and authority need to flow in all directions. People need to be empowered to act or the organisation’s ability to respond freezes up.
Another dimension of globalization is the war for talent. An interesting statistic from a leading recruitment company - in a global survey of 4,348 HR managers conducted on line from September to December 2012 by recruitment consultancy Michael Page, 48% of the participants described the search for suitably qualified staff as difficult or very difficult. The participants were drawn from North and South America, Asia, Europe and Australia, New Zealand so reflected a global perception.
The challenge for HR professionals, does is HR policy shaped to cater to global requirements and regional needs?
Enhanced Employee Engagement
Employee engagement is still a challenge for many companies. How do you ensure that your people are not only present at work but are also fully mobilizing and applying their brain power on the job? A Coporate Leadership Council Study of more than 20,000 employees dubbed “emerging stars” in more than 100 organisations worldwide over the period 2004 to 2010 was reported in an article in the Harvard Business Review in 2010 “How to Keep your Top Talent” by Jean Martin and Conrad Schmidt. They found that:
- The number of employees “highly disengaged” doubled between the first half of 2007 and the end of 2009 to 21%. This figure is especially high among star employees.
- The willingness to go above and beyond normal effort can be 50% lower in highly disengaged employees.
More recent research published by Aon Hewitt in their Trends in Global Employee Engagement 2012 found that:
- Four employees out of ten are not engaged worldwide: Engagement level by region varies. While almost three fifths (58%) of employees globally are considered in the engaged status, 42% of employees are somewhat or completely disengaged.
- Employees’ motivation to stay and exert extra effort falls short: While engagement levels are relatively stable, 2012 will be a challenging year for retention as employees seek new opportunities outside their organization as a result of limited career development and advancement opportunities.
Most recently and quite startlingly the Gallup Survey State of the Global Workplace in 2013 found that “Currently, 13% of employees across 142 countries worldwide are engaged in their jobs — that is, they are emotionally invested in and focused on creating value for their organizations every day. As in Gallup’s 2009-2010 global study of employee engagement, actively disengaged workers — i.e., those who are negative and potentially hostile to their organizations — continue to outnumber engaged employees at a rate of nearly 2-1.”
How does your organisation compare with these findings?
One trend that may be coming to your aid is the transformation of employee development and training. Technology has meant more development opportunities for more people through webinars, e learning, and on line workshops. In addition a greater emphasis is now being placed on formal individual mentoring and coaching.
Also critical in engagement will be the behavior of managers. As Gallup found in earlier research there are 12 elements that impact on employee engagement at work and the manager in his or her approach has the ability to influence and often strongly impact all of them. Two examples are:
- There is someone at work who encourages my development
- At work my opinions seem to count
How can you help your managers to be more effective in their behavior to not only mobilize but gain the commitment and energy of their teams? Together with my colleagues in the PPI Network we have worked with many companies in skilling managers with precisely this, the awareness, understanding, knowledge and skill to behave in ways that energize their direct reports and increase engagement and commitment. This is always a core element in our leadership development activities as it has such a direct impact on performance. Managers equipped to take more accountability for people and culture makes a bigger impact.
Related to this is another trend recognizing that organisations no longer provide lifetime employment nor have the expectation that talented people will stay with them permanently we are seeing the evolution of performance management to a contract from on-boarding to employee leaving which includes a mutually beneficial defined contribution and development plan laying out what is in it for both sides.
Adding to the complexity of the employee engagement question is the increasing nature of the diversity of generations in the workforce with different expectations. Millenials and Generation Y have a stronger sense of work/life balance and managers need help in figuring out how to manage this. For this generation work-life balance is more important than status and one of their criteria in choosing an employer is lifestyle. They are very interested in independence and collaborative forms of working.
HR and Technology
Technology is bringing about significant change that will continue to impact on HR and challenge HR professionals to keep up.
Social media and mobile devices are raising the bar on HR service delivery. There is increased collaborative and virtual working using tools and on-line platforms. Social networks enable people to work in decentralized teams, share knowledge, and particularly young employees want more communication and involvement. There are also an increasing use of internal social networks in companies.
These developments bring with them a new threat or danger to the company’s reputation - “If the promise they make to the outside world doesn’t match what it’s really like to work at the company, the credibility of organizations can be called into question using social media,” HR needs to manage this.
Real time talent management is becoming a reality. There are tools that allow continuous monitoring of performance. “A formal employee review every six months is fast becoming obsolete. What is far more important is software that enables us to stay on top of things in real time. Problems are nipped in the bud and the good stuff like recognition, gamification and rewards are in place to offer more productive employee relationships that can be nurtured.” (quoted from Forbes Magazine - 7 Hottest trends in HR technology)
Gamification is another new development. Video and on line gaming has exploded in popularity in recent years and many members of company workforces particularly the younger generations socialize around and through computer games. Companies who want to recruit, engage and mobilize this group are turning to the use of gaming concepts. Accenture, the respected international consulting group, has identified two distinct forms:
1. "Serious games"—a game whose main purpose is something beyond entertainment—education, advertising or behavior shaping, for instance.
2. "Gamification"—the use of game mechanics and/or game design principles in contexts other than games.
For more information surf to here.
Employee recruiting and networking has moved on line through linked-in, Facebook, Twitter, etc. and HR needs to keep up. Social media networking is the new way to find employees, find jobs, get answers to questions, build a wide-spread, mutually supportive network of contacts, and keep track of colleagues and friends.
Made to order employment relationships. Knowledge workers are increasingly demanding more flexibility in when and where they work. They are not doing less but are doing more in a different daily structure. There is increasing teleworking and flexible anything – hours, weeks, paid time off, babies and pets to work. The HR challenge is to make work and communication more transparent and measureable so this flexible working is possible and performance is tracked.
The Big Blur. Increasingly people are on line all the time and employees never stop working and what is done at work and at home is blurred. This can lead to conflicts caused by constant availability - “The boundaries between work and leisure are blurring,” Some people cannot cope with this and want a strict nine to five working structure while others want more flexible options for when and where they do their work leading to a more diverse workforce. Some companies have taken action by blocking e mail after a certain hour and at weekends or by prohibiting staff to access the office during weekends.
HR Data and Analytics
There is a growing need for HR professionals to understand how people management initiatives lend value to business to be able to augment ones that generate utmost value. Companies are expanding the use of Software in HR particularly in recruitment and talent management. HR Analytics or the use of data (not just HR-specific but organization-wide data), metrics, statistics and scientific methods, with the help of technology, are increasingly being used to gauge the impact of human capital management practices on business goals.
Companies are using data mining to capitalize on the data and the technology in ways that can drive business performance. They also want to make people decisions with the same rigor as they do decisions about customers, products, supply chains and business strategies.
How do these trends affect your business and your practice as a HR professional? Within our network we have a number of HR experts who will be happy to help you. Call or e mail Gerry Buckley if you would like to explore this.