Talentscapes

Refresh and Reboot - Reimagining the Future of HR

refresh.pngCome gather 'round people Wherever you roam And admit that the waters Around you have grown And accept it that soon You'll be drenched to the bone If your time to you Is worth savin' Then you better start swimmin' Or you'll sink like a stone For the times they are a-changin'

Bob Dylan would also have been a thought leader if he pursued a parallel career in professional services, for this excerpt from his song “The Times They Are a-Changin” captures the very essence of the times we live in today! Half a century ago, he could foretell the importance of change, agility and disruption.

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Businesses today are experiencing breakthroughs faster than ever, lifecycles for innovation are shortening, the east is gradually becoming the new west and more importantly, innovation and technology are the new fuels disrupting businesses. Leading firms are leaving behind the traditional models of market access; instead they are creating new markets and controlling consumer experience like never before.

The only static paradigm remains the access to talent as an enabler to organizational capabilities; yet, even in its static state, the entropy defining changes within the talent conundrum across demography, values, culture and psychographic is immense.

With close to 7 connected devices per human being on earth by 20201 and the average human spending close to 2.5 hours on mobile devices surfing daily 2, one does not really need to underscore the pace of change we are experiencing. The workforce of today is at the helm of actualizing and experiencing the new world like never before, be it in the form of digital connectedness, demand for here and now or changing aspirations from their careers.

As Organizations Navigate These Times, This Convergence of Talent, Technology and Shifting Psychographics Brings HR to the Crossroads. The New Work, Workforce and Workplace are Driven by Business and Talent Aspirations

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Business existence is gravitating towards three anchors:

  1. Agility: both in mindset and strategy to accommodate and create place for itself in the disruption era where megatrends are a given

  2. Speed: in executing an agile strategy that is living and mature enough to deliver until the next iteration kicks in

  3. Innovation: that remains the last standing pillar of competitive advantage in a world where the business model is short-lived

We have all read about the Kodaks, Nokias, Ubers and AirBnBs; the fundamentals of any marketplace success will have the dead silence or the resonating echoes of the three capabilities business anchors mentioned above.

The workforce of today can be best defined along the contours of a consumer. In the consumer products world, a brand is the cluster of beliefs, experiences and impressions that consumers attach to a product or service. A mismatch in expectations may trigger a shift of jobs.

This new consumer for businesses has its own demands:

  1. Experience: the employer brand has to be consistent across their journey in the workplace which adds to aspirations of careers, collaboration and learning

  2. Transparency: is a two-way street on them being able to voice opinions, track performance and getting recognized almost at real-time speeds

  3. A higher purpose: is the binding force connecting them to the work and organizational ethos, more importantly, how this translates to their individual intrinsic motivators

These three talent aspirations are not just pretty words anymore. Consider this: the employer brand is naked; platforms like Glassdoor give employees the freedom to express opinions and share perspectives on their journey within an organization. Social media is the leading channel for recruitment, and gamification is the new way of managing careers. Top talent will increasingly polarize towards employers that offer a real, relevant and consistent delivery on the aforementioned anchors.

Case in point, for the first time Aon’s Global Risk Management Survey that covers close to 1,400 risk decision-makers (only about a percent being CHROs), identified the failure to attract, and retain the right talent as a Top 3 risk4.

Taking Stock

Never before has HR been faced with such a challenge that brings with it the opportunity to be at the table co-creating business results rather than just delivering on them. The case of the refresh and reboot of HR is an imminent reality. A refresh that changes perspectives and relooks at what really matters to business and the workforce; a reboot on the way talent management runs and capabilities for the new world at work.

Successful HR organizations will live this “refresh and reboot” reality by breaking away from the usual rut of transactions and budget efficiencies.

“For a company of 30,000 employees, the HR budget will average USD 65 million per year. Even a 10% improvement in efficiency is more than USD 6 million annually — still important to address, but far less impact. HOWEVER, for the same organization a 10% increase in attracting and retaining pivotal employees adds approximately USD 70-160 million to a company’s bottom line 5.”

The power of co-creating and delivering business outcomes will be critical for the function to create impact. Our insights into this reimagined HR of the future led us towards five key outcomes that successful HR organizations will deliver upon.

1. Actualize culture: Culture plays the binding force between the what and the how; as the anchor of the values of an organization, it is the convergent point of delivering on both the business demands and the aspirations of the workforce. A strong culture results not only in great business results but also helps one become a talent magnet. While we need not to talk about the business side success of companies like Netflix and Google, their culture manifestoes “freedom with responsibility” and “how Google works” have over 11 and 2 million views on SlideShare respectively. In fact, in an interview talking about the Netflix culture note – It’s one of the most-viewed SlideShares week after week, has fetched more than 8 million views and has been called by Facebook COO, Sheryl Sandberg, as one of the most important documents to come out of Silicon Valley6.

2. Future-proof the business through capability: Consider these to statements made by revered business leaders almost two decades apart; Jack Welch (1999) “An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage” and John Chambers (2015) “Forty percent of businesses in this room, unfortunately, will not exist in a meaningful way in 10 years”. Between these two, one can really notice the growing importance of capability as an enabler of an organization's strategy. The ability to take a longterm view on 'here and now' capabilities needed for businesses today and how they will shift in the future

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is mission critical to businesses today. The “refresh and reboot of HR” will deliver on the goal of future proofing the business on the backbone of delivering a capability pipeline at all levels and for all skills.

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The 2015 Aon Best Employers Study in Asia identified “Critical Skills Shortage” and “Inadequate Talent Pipeline” as leading talent risks being viewed by CEOs. Digital skills are probably the hottest example in today’s context, investments in enhancing the consumer experience management on digital is a burning topic and so is the play of the Internet of Everything. The foresight to view these changes and new demand may be limited given the pace of change; on the contrary, the engine for capability generation and or sourcing are well within the grasp of businesses and HR.

3. Deliver on experience and aspirations: We spoke of today’s employee as a consumer wanting a real, relevant and a consistent employment experience. Organizations have to begin by understanding the employee as a customer, develop the offering, deliver the offering successfully, define the brand promise and then start amplifying it. This brand promise includes a higher purpose, meaningful work, the opportunity for personal aspirations actualization and learning, an appealing organizational culture, a sense of purpose, and a prideinducing set of workplace values. It is in this context that the HR function should introspect on why they exist! If the aim is to get to the head and hearts of their employees, they need to treat them as customers. The brand promise to the employees therefore needs to be real, relevant and consistent across all employee touch points.

LinkedIn was quick in realizing that “lifetime loyalty” is a dream; employees have aspirations and will need to experience the employment bond in the premise of that aspiration while living the employment experience. This gave rise to the “Tour of Duty” concept. If an employee moved the needle on the business during the four years, the company would help advance his/her career. Ideally, this would entail another tour of duty at the company, but it could also mean a position elsewhere7. “Learning and Careers” comes across as a disproportionate focus across the Employee Value Propositions of Best Employers, yet again underscoring the relevance of delivering on employee aspirations and engagement.

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4. Enabling high performance: High performance organizations have clear accountability for strategic goals, which are well-communicated and understood by their employees. This robust alignment across the employee hierarchy helps them not only to reward and recognize their prime talent but also provides challenging growth opportunities that meet the future needs of the organization. As we reimagine the future, there is room for creating a massive delta on performance through social collaboration, individual development and learning in the context of the enterprise.

Much has been spoken and written about the new fad of doing away with performance management; our take is that it is a small cog in the wheel of enabling high performance. There are different variations on this theme, but essentially two flavors. One is Wishful Thinking and the other is Surrender8.

Wishful thinking: Get rid of employee ratings, but still pay for performance and focus more on the employee-manager simply moves differentiation underground, the result is less transparency and trust, making employee-manager discussions even more difficult than they already are.

Surrender: Stop all differentiation, spread rewards evenly like butter and just let employees focus on doing their best. This school of thought says it’s just too difficult to differentiate employees, and merit increase budgets are too small to matter, so why bother? The only thing that this “strategy” gets right is the recognition that differentiation and paying for performance go hand-in-hand, so its solution is to simply get rid of both. Performance management that actually works and delivers on its promise can help you win the war for talent. But wishful thinking and surrender are losing strategies. So is jumping into a new fad without thoughtfully connecting it to your talent strategy. Managing, differentiating and rewarding for performance is still the winning formula. But it has to be executed well. Rethink your performance management process from top to bottom – stop complicating things and start simplifying. Performance needs clarity of purpose, the courage to follow through, investments in development, the elegance and user-friendliness of simplicity, and the basics of engaged managers.

5. Influencing change: All the efforts and outcomes we spoke of will come to fruition if there is the ability to influence change; there are elements that HR can drive, but there are also those where HR will play the role of a facilitator. The journey to driving these outcomes needs willful collaboration and not power plays, it needs shifting mindsets and not dictates, it needs storytelling and not numbers. Change and influence on the business and employees will define success. In a recent study concluded by Aon spanning close to 50 CHROs of leading global firms, the ability to drive and influence change came up on the Top 3 competencies critical to succeed in the role of a CHRO9.

Here are Some Thought Starters as You Look at Your “Refresh and Reboot” Journey

  • Looking at all these triggers, a simple way would be to rate your HR organizations on a scale of 1 to 6 (1 being not there at all and 6 being spot on) across the current and desired state
  • We suggest you involve some external inputs (business, employees, etc.) and do this exercise
  • The differences we are sure will be an eye opener on the journey that needs to be made
  • Feel free to share your findings with the authors for some more insights
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There’s More to Come!
We started this reimagining with a song and will conclude it in the way of the movies!

While this article focused on the contours of the future of HR, in the coming editions, watch out for our insights on spotless execution, the role of digital, a self-assessment on your execution journey and more.

Data Sources

  1. Cisco (2011)
  2. Digital, Social & Mobile Report by We Are Social (2015, Singapore)
  3. Forbes (2013)
  4. Aon Global Risk Management Survey (2015)
  5. Aon Hewitt Human Capital Foresight Research covering HR data of more than 1,000 large companies and more than
    20 million employees
  6. SlideShare, Business Insider (2014, 2015)
  7. Harvard Business Review; Tours of Duty: The New Employer-Employee
    Compact (2013)
  8. Aon Hewitt, Surrender is Not a Strategy (2015)
  9. Aon Hewitt, Developing the Next Generation of CHROs (2015)
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Shaswat Kumar
Partner, Talent & Performance, Aon Hewitt
Vikrant Khanna
Lead – Insights & Innovation, Asia Pacific & Middle East, Aon Hewitt
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