Building the organization of the future rated most important challenge
Posted by Human Capital Trends Editors on March 1, 2017.
As we get deeper into the digital age, the rate of technology change keeps accelerating, challenging individuals, businesses, and public policy to keep up. HR can play a key role in closing the gaps and helping people and organizations adapt.
This week we launched our fifth, and largest, Global Human Capital Trends study encompassing more than 10,400 business and HR leaders in 140 countries. We titled the report “Rewriting the rules for the digital age” because accelerating change creates the need for new rules for business and HR. These rules reflect the shifts in mind-set and behavior that we believe are required to lead, organize, motivate, manage, and engage the 21st-century workforce.
As a byproduct of the technology-driven Fourth Industrial Revolution, organizations face a radically shifting context for the workforce, the workplace, and the world of work. These shifts have changed the rules for nearly every organizational people practice, from learning to management to the definition of work itself.
As the following graph illustrates, four interrelated factors are at work.
Mind the gap(s): The four factors driving human capital change
- Curve 1 illustrates the exponential rate of technological change.
- Curve 2 reflects the relative speed and adeptness of individuals to adopt new innovations.
- Curve 3, however, shows that while individuals adapt to technology relatively rapidly, businesses and organizations move at a slower pace. The business practices of corporate planning, organizational structure, job design, goal-setting, and management were largely developed in the (first) industrial age, and companies must constantly revise them to keep up. The gaps between curves 1, 2, and 3 show the need for organizations to adapt to technology and lifestyle changes. They are a major focus of the trends discussed in this year’s report.
- Finally, curve 4 represents public policy, including policies around income inequality, unemployment, immigration, and trade. These issues, which directly affect businesses through regulation, taxes, and legislation, adapt at an even slower pace. Laws and policies on topics like minimum wage, trade tariffs, immigration, and education only shift after years of public debate. The gap between public policy and the other three domains results in imbalances and challenges for business and HR leaders.
Understanding these four curves, and the growing gaps among technology, individuals, businesses, and public policy is now essential to effectively navigating the world of human capital.
HR has a unique role to play: It can help leaders and organizations adapt to technology, help people adapt to new models of work and careers, and help the company as a whole adapt to and encourage changes in society, regulation, and public policy.
The 10 human capital trends
The trends in this year’s report identify 10 areas in which organizations will need to close the gap between the pace of change and the challenges of work and talent management.
Trend 1: The organization of the future: Arriving now
As organizations become more digital, they face a growing imperative to redesign themselves to move faster, adapt more quickly, learn rapidly, and embrace dynamic career demands. Leading organizations are moving past the design phase to actively build this new organization.
Trend 2: Careers and learning: Real-time, all the time
As companies build the organization of the future, continuous learning is critical for business success. The new rules call for a learning and development organization that can deliver learning that is always on and always available over a range of mobile platforms.
Trend 3: Talent acquisition: Enter the cognitive recruiter
Recruiting is becoming a digital experience as candidates come to expect convenience and mobile contact. Savvy recruiters will embrace new TA technologies to forge psychological and emotional connections with candidates and constantly strengthen the employment brand.
Trend 4: The employee experience: Culture, engagement, and beyond
Rather than focus narrowly on employee engagement and culture, organizations are developing an integrated focus on the entire employee experience. A new marketplace of pulse feedback tools, wellness and fitness apps, and integrated employee self-service tools is helping.
Trend 5: Performance management: Play a winning hand
Across all industries and geographies, companies are reevaluating every aspect of their performance management programs, from goal setting and evaluation to incentives and rewards. They are aligning these changes to business strategy and the ongoing transformation of work.
Trend 6: Leadership disrupted: Pushing the boundaries
In 2015, we termed leadership the “perennial issue” that never seems to go away. This year we see a radical shift. Today, as never before, organizations do not just need more strong leaders, they need a completely different kind of leader—younger, more agile, “digital-ready.”
Trend 7: Digital HR: Platforms, people, and work
HR leaders are being pushed to take on a larger role in helping to drive the organization to “be digital,” not just “do digital.” As digital management practices and agile organization design become central to business thinking, HR is focusing on people, work, and platforms.
Trend 8: People analytics: Recalculating the route
No longer is analytics about finding interesting information and flagging it for managers: It is now becoming a business function focused on using data to understand every part of a business operation, and embedding analytics into real-time apps and the way we work.
Trend 9: Diversity and inclusion: The reality gap
Fairness, equity, and inclusion are now CEO-level issues, but continue to be frustrating and challenging. Training and education are not working well enough. The new rules focus on experiential learning, process change, data-driven tools, transparency, and accountability.
Trend 10: The future of work: The augmented workforce
Automation, cognitive computing, and crowds are paradigm-shifting forces reshaping the workforce. Organizations must experiment and implement cognitive tools, focus on retraining people to use these tools, and rethink the role of people as more and more work becomes automated.
These are just brief summaries—you’ll want to read the report for further insights into what’s driving the trends as well as lessons from the front lines: examples of how some of the world’s most advanced organizations are leading efforts in each trend. You’ll also find a glimpse of the future, as we compare the “old rules” that governed HR in the past to the new rules for today’s digital age.
1 Klaus Schwab, The Fourth Industrial Revolution (World Economic Forum, 2016).