Deloitte’s 2018 Global Human Capital Trends report argues that businesses must take on a new leadership role in today’s society, and hints that changes in workforce dynamics might put expanding engagement efforts at the center of their strategies.
As the use of advanced technologies like artificial intelligence, automation and workforce analytics continue to spread, employers are trying to reconcile the demand for human skills with the need for increased productivity, according to the report, this year titled The Rise of the Social Enterprise.
While the report identifies 2018’s “make or break” issue to be the need for C-level executives to recognize and act on business’s evolving role in society, Deloitte sees technology’s use growing in both breadth and complexity.
Yet as often seems the case, the majority of executives might grasp the importance of the issues involved of issues, but only a minority feel like they’re ready to deal with them.
For example, while 72 percent of 11,000 business and HR leaders see the skills-demand/productivity issue as important, less than a third—31 percent—said they were ready to address it.
In the same vein, 64 percent of companies say they actively manage the legal liability related to their workforce data, but just 22 percent have “excellent” processes in place to safeguard it. That’s playing with fire.
Automation’s Impact Preoccupies Everyone
Since last year’s report, companies have become “laser-focused” on how automation-driven job changes will affect individual workers, Deloitte said. More than 40 percent say the impact on jobs will be “major,” while 61 percent are at work redesigning roles around AI and robotics. Nearly three quarters—72 percent—of HR and business executives say AI is important or very important, Deloitte said.
But while both employers and employees recognize that traditional career paths are changing, over 54 percent of companies have no programs in place to build the skills that will be soon be needed, and only 18 percent provide workers with the opportunity to develop skills themselves. Quite correctly, Deloitte suggests that if companies are to be leaders of change, they need to become more serious about putting in place real learning solutions to address growing skills gaps in a number of areas.
In addition, the report said, “organizations must also rethink how they invest in their employees on a personal level.” Some 43 percent said well-being reinforces their company’s mission, 60 percent believe it improves employee retention and 61 percent agree it improves productivity and bottom-line results.
But here again, employers’ actions don’t synch up with what they believe: Research by Bersin found only 3 percent believe their rewards programs are very effective at motivating their employees. For organizations to succeed, Deloitte said, they “must explore more frequent rewards and other incentives like vacation time or student-loan forgiveness.
Social Engagement Could Get Hotter
“This year’s report is a wake-up call for organizations to look beyond their own four walls and reimagine their broader roles in society,” said Erica Volini, a Deloitte Consulting principal and its U.S. human capital leader. “Integrating the C-suite to build a more social enterprise will be a differentiator for businesses to attract the right talent, drive customer loyalty and sustain long-term growth.”
All this bodes well for providers of social HCM technology or related expertise. So does the fact that 34 percent of respondents say they have few or poorly funded citizenship programs and just 22 percent are giving them much thought at all. If you believe Deloitte’s contention that businesses will fill a large part of today’s void in societal leadership—and we see little reason to doubt it—companies that successfully engage customers and workers will put themselves in a strong position as both businesses and employers.
It’s worth considering that this could be achieved by social tools that blur the line between customer and employee. Deloitte says that by 2020, 37 percent of employers expect to hire more contractors, 23 percent to hire more freelancers and 13 percent to hire more gig workers. That growing proportion of contingent workers means more organizations will increasingly hire their customers. Thus, their messages to both must align.
Yet only16 percent of organizations have an established strategy for managing this mix of workers. “It is critical to successfully implement hybrid workforce strategies because they can have a significant impact on an organization’s employment brand and external reputation,” Deloitte said.
“Customers and employees alike are holding companies to higher standards than ever before and rewarding companies who demonstrate socially-conscious behavior with unwavering loyalty,” observed Deloitte Consulting Principal Josh Bersin. “It’s not about check-the-box CSR initiatives, but integrating citizenship, fairness, inclusion, and purpose as core values across work practices.”
You can explore the full report here.