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.
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.