Leading in the new world of work: Deloitte’s 2015 Global Human Capital Trends

Leading in the new world of work: Deloitte’s 2015 Global Human Capital Trends

Posted by Josh Bersin on March 5, 2015

This week we officially launched one of the largest-ever longitudinal studies of talent trends and readiness around the world: Deloitte Human Capital Trends 2015. More than 3,300 companies from 106 countries participated, and the results are staggering. In this year’s report, we explore 10 major trends that emerged from our research, which reflect four major themes: leading, engaging, reinventing, and reimagining.

The bottom line is pretty simple: We are all living in a “New World of Work” — one that is always-on 24×7, operates at lightning speed, and in which the team takes precedence over the organization. When we enjoy our team and we operate well as a team, we thrive. When the leaders are weak or the team is not aligned, we feel overwhelmed and overworked.

Part of this new world is a flood of information, technology, and data. HR teams have the opportunity to help us simplify our lives, simplify their own programs, use data to make decisions, and innovate. Traditional practices like performance management are being left in the dust as we embrace agile, feedback-rich systems that let us talk to each other, set and reset goals, and collaborate more easily.

Part of this new world is the “continuous learning organization”— one where each of us can learn what we need to know, when we need it. This means companies should redesign the learning experience as they simplify HR.

A large team of us spent many months interviewing, surveying, and meeting with companies around the world to do this research. We were surprised at how hard HR teams are working to keep up — and how many of them feel behind. This is an exciting time for business and HR leaders, as the work equation has changed. We have to focus on engagement, empowerment, and environment — to make jobs enjoyable, achievable, and rewarding.

Here are the 10 big trends we identified this year, with some data on the priority of each. Please review our online data dashboard to look at specific data and detailed analysis in your industry or geography.

Fig 1: The Ten Global Trends Shaping Corporate Talent in 2015

Each of these trends is discussed in detail in the report, along with company capabilities, trends, leading practices, and examples of world-class solutions.

Top Findings:

1. Culture, engagement, and retention is now the No. 1 issue around the world. Eighty-seven percent of companies surveyed rate this a high-priority problem and 50 percent rate it urgent. Company readiness to deal with this issue has dropped by 43 percent year over year, and today approximately half the companies we surveyed believe they are unable to drive the desired culture in their organizations.

I’ve written extensively on this topic, and the big message is that engagement is now central to everything we do as managers and leaders. If we can’t build a company that attracts and inspires people, we will likely lose them to our competition. (Read The Simply Irresistible Organization for more on this topic.)

The research also points out the biggest contributors to engagement, and they vary by industry. As I discuss in the Simply Irresistible model, leadership, management practices, work flexibility, and learning opportunities are highly correlated with engagement and retention, and in retail, hospitality, and services, diversity is as well. Interestingly, the skills of HR are highly correlated with strong employee engagement — so all of these various trends are connected.

2. Gaps in the leadership pipeline remain an urgent issue, and there has been almost no progress from prior years. 87 percent of surveyed companies rate this important and 51 percent rate it urgent. Despite the fact that leadership development spending increased by 14 percent last year, only one-third of companies have programs focused on Millennials, and overall capability dropped by about 18 percent.

There are essentially “haves” and “have nots” in leadership — our assessment is that companies that continuously invest in modern (reengineered) leadership programs far outperform their peers. Companies at maturity Level 4 are spending three to four times as much as Level 1 maturity companies, and the gap remains large.

3. Corporate training and learning is now “in the spotlight.” The importance of learning has jumped from the No. 8 to the No. 3 issue, and capabilities to meet desired needs plummeted by more than 200 percent.

The training industry is in the middle of a renaissance, and companies should reengineer their employee learning experience to give people the equivalent of the on-demand, highly engaging materials (and access to experts) they can get on the public Internet. Building a culture of learning, creating a modern digital learning experience, and bringing experts to help teach is now critical to business success.

4. Performance management is now being reengineered at an accelerated rate. More than half the companies we surveyed are reengineering or have recently reengineered their performance practices. This is a radical trend: Performance management, goal setting, and ratings, or lack thereof, are at the center of the way we manage people. They define how we pay people, promote them, develop them, and move them.

After years of trying to build top-down, hierarchical, forced rankings to evaluate people, the world is shifting toward a feedback-centric, agile, strengths-based approach. The data prove that companies that modernize their performance management process see 20–30 percent higher engagement and dramatic improvements in retention. And performance goes up, too.

5. The skills of HR professionals are lagging behind at an accelerating rate. The data show that HR skills are the fourth highest issue (80 percent rate this important and 39 percent rate it urgent), and business leaders rate HR 20 percent lower than they rate themselves.

HR as a function rated itself a 1.65 on a 5.0 scale (a C- at best) and business leaders rated HR a 1.35 (a D+) — almost 20 percent lower. This is not for a lack of dedication and effort; it is likely a problem of skills and often the wrong people in these jobs. Many of today’s HR functions are not functioning well, and the problem may be the people, not the technology. Only 11 percent of companies have robust development programs for HR, and self-ratings for HR have barely budged in three years.

Our research also shows that nearly one-third of new CHROs are coming from the business, so there is now immense pressure to build what we call “Bold HR” — a function that can reinvent itself, start with a fresh sheet of paper, adopt technology as a tool (not a solution in itself), and boldly innovate and consult with business leaders.

6. People analytics seem to be stuck in neutral. Despite the fact that HR professionals all over the world are excited about Big Data and analytics (read The Geeks are Coming to HR for more on this topic), our research shows little to no progress in maturity since last year.

Vendors are offering new analytics tools like candy, but HR departments are generally still not able to use them because underlying infrastructure and data quality remain issues. The problem is not only replacing the technology (only 11 percent of our respondents have implemented full cloud technology!) but also making the multi-year investment to create a serious “people analytics” function.

7. Simplification is becoming the new mantra. Finally, as we looked at the 2014 trends, we realized that what was The Overwhelmed Employee in 2014 is now “The Need to Simplify Work” in 2015. Our research shows that more than half the companies we surveyed believe their work environment is “highly complex” and nearly half still suffer from the overwhelming complexity of the environment.

Complexity creates cost, reduces engagement, and hurts productivity. One of our mandates for HR in 2015 is to “think simple” and practice design thinking, as we describe in detail throughout the report.

2015: Time to Be Bold

Despite all of these challenges, the research shows tremendous innovation and progress in all 10 trends. We don’t mean to sound overly negative here — we see amazing new solutions in companies of all sizes, and the report details some inspiring examples of new strategies to deal with these problems.

The big issue is one of focus: In 2015, as the economy grows and Millennials take over companies, HR has to “be bold” and get serious about recreating its solutions, consulting with a closer relationship to the business, and leveraging data and technology for business solutions— not just “creating great service.”

I look forward to your feedback on this research. Please visit our online data visualization dashboard to view data in your industry and geography.

predictions for 2015


Josh Bersin Josh Bersin Josh Bersin is the founder and a principal of Bersin by Deloitte, Deloitte Consulting LLP, a leading research and advisory firm focused on corporate leadership, talent, learning, and the intersection between work and life. Josh is a published author on Forbes, is a LinkedIn Influencer, has appeared on Bloomberg, NPR, and The Wall Street Journal, and speaks at industry conferences and to corporate HR departments around the world. You can contact Josh on twitter at @josh_bersin and follow him at Linkedin. Josh’s personal blog is at http://www.joshbersin.com.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Talent strategies for 2015: The world has changed

Talent Survey

Posted by Josh Bersin on January 09, 2015

This year, 2015, is shaping up to be a big year: low unemployment, low oil prices, many tech companies to go public, and growth expectations for most businesses.

While the business world expands, the world of talent has completely shifted.

This year our Talent and HR predictions for 2015 has some important new ideas to consider — in this article I will give you some highlights, and you can download the report here.

Top Line: Changes are Ahead

Our entire workplace has changed, and so has the way we attract, manage, and empower people. The three themes I have for the year are Engagement, Empowerment, and Environment. Engage people in our mission and strategy; empower and develop people to perform and thrive; create an environment of simplicity and productivity.

predictions for 2015

Thinking back over my 35 years as a working professional, I barely recognize what work is like today. I was joking with my children about how I used to go to work with a briefcase filled with papers; there were no computers, no voicemail, and only an office of people and a telephone to work with. We had a steno pool (people who typed letters for us), and I had an old-fashioned boss who sat in the corner office with his tie on and his jacket buttoned. He was really a wonderful manager, but it was all about “doing your job” and getting a good performance appraisal.

Today we work at home, in coffee shops, on airplanes, and often late at night. We interact with people all over the world easily, and we have tools and technologies at our fingertips to find information, write, communicate, and analyze data like never before. And thanks to the growth of cognitive computing technologies, we may all soon have thinking machines in our phones, machines that monitor where we are, what work to do, what customer problems to solve, and even what HR problems to address.

Much of this transition has been positive, but much has also been difficult. Many of us are “overwhelmed employees” and our research shows that employee engagement and retention is at an all-time low.While many people are still looking for work, more and more people are getting fed up with the 24/7 work environment around us, so they go to social websites like LinkedIn or Glassdoor, and jobs are offered to them.

The concepts of “integrated talent management” are rapidly changing, with many HR practices being reinvented. In fact I’d say that talent management as we’ve known it over the last 10 years is about to go away and be reinvented, with a focus on what I call Engagement, Experience, and Environment. (Read my latest article “Is Corporate Talent Management Dead?“ if you want more on that topic in particular.)

The 10 predictions we write about for 2015 cover topics from employee engagement to new technologies for HR, a whole new focus on culture, renewed strategies to develop leadership, and the need to revitalize HR and invest much more heavily in analytics. But overall the big trend is this: Almost everything we’ve done traditionally in HR has to be adjusted (or re-engineered). The younger, more mobile, more agile workforce and workplace we now live in demand new approaches: flexible work policies, more focus on empowerment and skills development, a more humane work environment, and both financial and workplace benefits that are locally relevant.

As we look at 2015, we see five fundamental shifts that dramatically impact corporate talent, leadership, and HR strategies.

1. Technology has removed the barrier between work and life.

Companies have to focus on culture, environment, and simplification.

We are working all the time, emails and messages are arriving 24/7, and information, conversations, and content are literally streaming at us wherever we go. The work “environment” we live in today is radically different: People work wherever they want, leading to a huge wave of open offices; over-work is a tremendous challenge, and people are not sure how to deal with the overwhelming amount of information they receive each day. Design thinking, simplification, and ease of use are the new mantras for corporate talent programs.

2. Employee engagement, culture, and leadership are lifeline issues.

Glassdoor data shows a split in companies. There is a huge segment of companies who are “highly engaged” and a similarly large number of companies whose employees are ”actively disengaged.” The highly engaged companies are attracting the best people, delivering greater customer service, and innovating better. These companies are focused on mission, culture, and leadership — and they understand that people are not “talent,: they are people — with their own personal needs and aspirations.

This focus on engagement has impacted everything we do, because ultimately employee engagement is all a business has. Companies have to rethink their coaching and development strategies, their career mobility strategies, and how they develop and select leaders. Today’s leader focuses on “building a highly engaged team” not just “delivering on business results.”

Unfortunately our research shows that the gaps in corporate leadership are wider than ever. Research by Deloitte and others (highlighted in the report) will show you how leadership development, assessment, and coaching has to be a top focus for 2015.

3. Learning, capabilities, and skills are the currency of success.

From both an individual and organizational standpoint, technical and professional capabilities are now the currency of success. If you can attract or develop better scientists, engineers, sales people, or functional experts, you will likely beat your competition. And once you attract these people, you must give them a compelling learning environment to stay current, as technology advances at an accelerating rate. L&D organizations and strategies have not kept up, and we are in an era where corporate learning is going through as much change as we witnessed in the early 2000s when e-learning hit the scene.

4. HR as a function is at a crossroads and must reinvent itself.

Underlying most of these issues is the need to reskill and re-energize HR. It’s interesting that the US organizations SHRM and HCI are now competing to sell HR certifications. The problem is not one of certification; it’s one of redefining what HR professionals do. Company after company I talk with is going through a restructure of their HR team, moving HR closer to the business, and reskilling generalists into finely tuned business consultants. I believe this is a decade-long transition taking place within the HR function.

5. Data is now integral to all decisions HR must make.

Finally, we are entering a talent world where people data is now central to every decision we make. Organizations that are investing in analytics teams, analytics tools, and analytics expertise are going to far outperform their peers. Who to hire, who to promote, how much to pay, how to develop, what next job to take — all these decisions are now “data enabled,” and we expect HR technology, which is becoming more integrated every day, to become more and more like “instrumentation of your organization”— giving you data to improve organizational performance every day.

Read our predictions and join me on our webinar on Friday, January 23, 2015, at 2PM EST. (Register Here.)

This is my 11th year writing the Bersin Predictions for the coming year, and I think the changes ahead are more transformational than ever before. I hope you find the report educational, inspiring, and helpful as you plan your year. I am thankful to the world community of talent and HR leaders I get to work with every day.

And as always I look forward to your comments and feedback. (Click here to download report.)

predictions for 2015


Josh Bersin Josh Bersin is a principal and founder of Bersin by Deloitte, Deloitte Consulting LLP, delivering analytics, research and tools that employers use as a foundation for day-to-day decision making. He has worked with hundreds of companies to help them deliver high impact employee learning, leadership development and talent management

1 Global Human Capital Trends 2014: Engaging the 21st-century workforce, Deloitte Consulting LLP and Bersin By Deloitte, Deloitte University Press, April 2014

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

HR Chargebacks: Avoiding the pitfalls, realizing the benefits

HR Chargebacks

Posted by Art Mazor and Gary Johnsen on October 30, 2014

In Part I of our discussion of HR chargebacks, we noted that chargebacks are a natural step in the evolution of HR from a purely transactional function to a strategic partner with the business. Done well, chargeback programs can offer a number of benefits — HR clarity, efficiency, cost control, and more. Done poorly, the desire to add accountability and alignment to HR costs and programs can backfire. Here in Part II, we explore some of the ways to execute chargebacks effectively.

Continue reading “HR Chargebacks: Avoiding the pitfalls, realizing the benefits”

HR Chargebacks: An important step in HR’s journey

Businessman in Conference Room

Posted by Art Mazor and Gary Johnsen on October 23, 2014

As HR finds its seat at the business table, it faces increasing scrutiny to demonstrate, like its counterparts around that table, how HR contributes to the business strategy and objectives.This scrutiny is good for HR in that it moves the function further from a purely transactional cost center to a strategic business partner. It also forces HR to be more accountable for how it manages the business of HR and aligns the cost of its operations and programs to business objectives. A chargeback process is a common “go to” approach for providing visibility into internal or shared costs and increasing accountability for cost management, yet can bring a mixture of benefits and pitfalls if not designed and implemented properly.

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Human Resources: Securing and Preserving a Seat at the Table

Securing and Preserving a Seat at the Table

Posted by Rick Wald on December 12, 2013

With Thanksgiving behind us, and colder weather ahead of us, we are officially in the midst of the 2013 holiday season. During this time of year, there are many occasions that bring family and friends around the dining room table for a festive meal. And, for many, these meals bring up the same questions every year: Who gets invited? And who sits where? Holiday seating arrangements can be tricky: there’s often a kids table, certain relatives are best kept at opposite ends of the table, and grandma has to be able to hear her grandson’s latest stories from school.

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Working as One: Collective Leadership

Working as One: Collective Leadership Posted by Fred Miller on October 19, 2011

Collective leadership is an approach to thinking about how organizations achieve major goals: deploy new strategies or implement transformational change. It identifies ways leaders can more effectively galvanize their people to work together toward a common purpose. It is a business strategy, rather than an HR strategy, but its emphasis on people and leadership means HR can be an important driver and supporter of the effort (as explained in our Human Capital Trends 2011 report).

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