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Global Human Capital Trends 2016 The new organization: Different by design
Josh Bersin Principal, Founder Bersin by Deloitte @Josh_Bersin
Demographic upheavals: Millennials make up more than half the workforce, and Boomers are working into their 70s and 80s.
Digital technology is everywhere: Technology is disrupting business models and radically changing the workplace and how work is done.
Rate of change has accelerated: Business must become more agile to keep up with the rapid pace of change.
New social contract between companies and workers: Younger workers demand rapid career growth, compelling and flexible workplace, and a sense of purpose at work.
Disrupting the workforce landscape
Sources: Deloitte Human Capital Trends 2014 and 2015
The overwhelmed employee
The “average” US worker now spends 25% of their day
reading or answering emails
Fewer than 16% of companies have a program to “simplify work” or help
employees deal with stress.
More than 80% of all companies rate their business “highly complex” or “complex”
for employees.
The average mobile phone user checks their device 150 times a day.
The “average” US worker works 47 hours and 49% work 50 hours or
more per week, with 20% at 60+ hours per week
40% of the US population believes it is impossible to succeed at work and have a balanced family life.
Productivity is suffering — is technology helping?
US productivity last ten years
1 billion smartphones
i-Phone launched
100 million Twitter users
Since 2011 productivity gains have
slowed to crawl
Percent rating trend important
Importance of Human Capital trends to business
Organizational design
Leadership
Culture
Engagement
92%
89%
86%
85%
Learning
Design thinking
Skills of HR organization
People analytics
Digital HR
Workforce management
77%
74%
71%
84%
79%
78%
% very important
2016
56%
57%
54%
48%
44%
39%
36%
36%
32%
28%
% very important
2015
…
50%
50%
39%
…
39%
29%
…
…
Organizational design
The rise of teams say the trend is “very important” or “important” 92%
of large companies are organized functionally today
25% Only Shift from top-
down hierarchy to a network of
teams to deliver results faster
are reorganizing or plan to this year
feel expert at building cross-functional teams
believe their companies are very ready to effectively redesign their organizations
understand the way their people work together in networks
21%
14%
12%
83%
Shared values and culture
Transparent goals and projects
Free flow of information
and feedback
People rewarded for their skills and abilities,
not position
Organizational design
A network of teams
B A
D C F
A
C D E
B
G
How things were How things “are” How things work
E
Historic Perspective on Performance and Goals
HowOrganiza,onsEvolve
Startup Create
Sell
Functional Hierarchy
Scale
Efficiency
Distributed P&L
Expand
Delegate Manage
Federated Shared
Services
Consolidate Rationalize Watchdog
Network Of
Teams
Evolve Adapt
Collaborate Innovate
Agile Entrepreneurial
Control Grow
Delegate Decentralize
Coordinate Standardize
Innovative Mission-Driven
Agile, Shared, Fast Changing
Top-Down Structured
Delegated Aligned
Local and Global
Team-Centric Coordinated
Historic Perspective on Performance and Management
TheEvolu,onofManagementThinkingWeareHere
TheIndustrialCorpora4on
HierarchicalLeadership
Collabora4veManagement
NetworksofTeams
<1950s 1960s-80s Today1990s
AndrewCarnegieHenryFord
NeKlix,Google,Facebook,Amazon
JackWelchPeterDrucker
HowardSchulzSteveJobs
Profit,Growth,FinancialEngineering
CustomerService,EmployeesasLeaders
Mission,Purpose,Sustainability
Opera4onalEfficiency
2020
Purpose,Meaning,
andEmpow
erment?
IndustrialAgePeopleasWorkers
ManagementbyObjec4ve
ServantLeadershipWorkTogether
EmpowertheTeam
TheCorpora4onisKing
TheExecu4vesareKing
TheTeamsandTeamLeadersareKings
ThePeopleareKing(s)
13
Only 12% of companies believe their existing performance management process is “worth the time put into it.”
- Deloitte Human Capital Trends 2015
Performance Management
TheProcessisBroken
Goal Management
Organizations that revise or review goals quarterly or more are
3.5 X more likely
to score in the top quartile of business performance.
MoreFrequentGoalReviews
Note:Basedonouremployeerecogni,onsurvey,wecreatedabusinessperformanceindex(BPI1)thataveragesscoresonemployeeengagementandthreebusiness-relatedoutcomes(customersa,sfac,on,coststructurecomparedtocompe,tors,andmarketleadershipposi,on).Itthenranksorganiza,onsonthescale.Organiza,onsthatscoredinthetop25percentoftheBPIareconsideredtohave“strong”businessoutcomes.
16%
44%
21%
10%
9%
3%
24%
26%
31%
50%
No Goal Revision
Once Per Year
Twice Per Year
Quarterly
Monthly
Source:“High-ImpactPerformanceManagementUsingGoalstoFocusthe21st-CenturyWorkforce,”StaciaShermanGarr/BersinbyDeloiYe,December2014.
Improvement in Performance Based on Frequency of Goal Review
BoardofDirectors/CEO
Execu,veTeam/SeniorLeaders
BusinessLeaders
TeamManagers
TeamLeaders
IndividualContributors
TheIndustrialAgeProcess:TopDownCascadingGoals
The Old Model of Setting Goals
Where Goals are Going
Goals in a Networked Organization
B
A
D C F
G E
Goals Today
Meaningful Culturally Aligned
Transparent Agile
Developmental
Leadership awakened
Generations, teams, science say the trend is “very important” or “important” 89%
Need different types of leaders,
who are effective as an individual and in teams, at all levels
Initiatives to develop versatile leaders require rigorous structure backed by data
have little or no investment on diversity in leadership 59%
have strong programs to build Millennial leaders 7%
have strong programs to build Global leadership 13%
described themselves as “strong” at succession planning throughout the business
14%
Percent of companies rating leadership “important” jumped from 87% in 2015 to 89% in 2016. Percent of companies rating the problem “urgent” jumped from 51% to 57% from 2015 to 2016.
The problem is getting more urgent Yet progress is uneven and inconsistent
61% of companies are revamping or just revamped their leadership program in the last year and 30% are doing it this year. Yet 38% have no plans and 21% have no leadership development programs at all.
Deloitte Global Human Capital Trends
Leadership trends in 2016
Deloitte 2016 Human Capital Trends n=7,000
Inconsistent Management Training Content Available • No Development Process • Benefit to Employees
Level 1
Structured Leadership Training Core Competencies • Well-Defined Curriculum • Developing Individuals
Level 2
Focused Leadership Development Culture-Setting • Future-Focused • Developing Organization
Level 3
Strategic Leadership Development Championed by Executives • Talent Management Integration
Level 4 B
ersi
n by
Del
oitte
25%
38%
28%
10%
Leadership rewired
Why is the leadership market so broken?
8%
15%
9%
6%
13%
20%
15%
7%
Global skills and experiences in leadership program
Leadership programs for all levels (new, mid-level, senior)
Experiential leadership programs
Targeted Millennial leadership programs
2016 2015
Maturity growth in global and experiential programs, but not enough focus on Millennials
(% companies who are “excellent” at these areas)
Deloitte Global Human Capital Trends 2016, n=7,000
70% of Millennials
tell us they are receiving no leadership
development at all.
Focus areas
We are not building leaders fast or early enough
Essential Talent Activities Standalone disconnected staffing, training, and performance practices
Level 1
Critical Talent Growth Critical talent segments, focus on hiring, training, performance
Level 2
Managed Talent Relationships Workforce planning, development planning, leadership development integrated
into talent strategy
Level 3
Inclusive Talent System Talent strategies integrated with inclusion, diversity, and culture
Level 4 B
ersi
n by
Del
oitte
10%
19%
59%
12%
The New Bersin by Deloitte Talent Management Maturity Model
Source: Bersin by Deloitte, 2015.
Talent management has changed
Inclusion and diversity are key
Culture
Shape culture, drive strategy
Senior leaders must work with HR to align culture to business goals
Culture helps bind people
together and can drive execution and consistency
say the trend is “very important” or “important” 86%
believe “culture is a potential competitive advantage”
believe they understand their culture well today
believe they have the “right culture”
28%
19%
82%
Average 3.2
What are these companies doing?
Glassdoor ratings of employer recommendations — 200,000+ respondents
Engagement remains a global challenge
Culture, value, leadership, and career (The Big Four)
The issues that matter to employees
0.00
0.12
0.13
0.22
0.28
0.30
0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35
Year founded (age)
Compensation & benefits
Work life balance
Career opportunities
Senior leadership
Culture and values
Correlation of employment factors to glassdoor recommendations as place to work
Culture and leadership are 3X more important than salary in your employment brand.
Career development and learning are almost
2X more important than comp, benefits, and work environment.
Companies with “soul” had a
1026% return from 1996 through 2006,
8x higher than S&P 400 firms
Companies with “soul” experience: • Much higher engagement
and retention • Better customer service • Long-term profitability
Source: Simply Irresistible: Engaging the 21st Century Workforce, Bersin by Deloitte, 2014
Importance of Mission and Purpose
The Simply Irresistible Organization® What we have learned: An Integrated Approach is Needed
Meaningful Work
Hands-On Management
Fantastic Environment
Growth Opportunity Trust in Leadership
Autonomy Clear transparent goals Flexible, humane work environment
Facilitated talent mobility Mission and purpose
Selection to Fit Coaching & feedback Recognition rich culture Career growth in many paths
Investment in people, trust
Small Teams Leadership Development Open flexible workspace Self and formal development
Transparency and communication
Time for Slack Modern Performance Management
Inclusive, diverse culture High impact learning culture
Inspiration
A Focus on Simplicity
“Over 300 years of economic history, the principal and most enduring
mechanism for distribution of wealth and reduction in inequality is the
diffusion of skills and knowledge.”
Why learning is so important to employees
The learning curve is the earning curve
Training is key to Millennial engagement
Learning as Employment Brand
6%
6%
8%
14%
19%
22%
0% 5% 10% 15% 20% 25%
Greater vacation allowance
Retirement funding
Free private healthcare
Cash bonuses
Flexible working hours
Training and development
Millennials in the workforce For Millennials, “Training and development” is the most coveted job benefit
Source: KPCB
Percent indicating job benefit in first place
Back office, operational, contingent employees
Top Management
Senior management
First line management
SMES (Consultants)
Senior specialists
Functional specialists/front-line employees
Middle management
Career management
The traditional view
Back office, operational, contingent employees
Top Management
Senior management
First line management
SMES (Consultants)
Senior specialists
Functional specialists/front-line employees
Middle management
Career management
The reality
Contract hire
Job intern
Developmental assignment
Lateral promotion
Stretch assignment
External assignment Upward
promotion Lateral
assignment New
assignment
Part time loan
New candidate
New leader
Exec succession
The Feedback System
How Does Feedback Work Today?
Engagement Survey
Senior Management Team
Employees
Line Managers | HR
Performance Review
Filtering and Cleaning
Time Per Year
How Engagement is Evolving
Enterprise “Listening” Architecture
Integrated Reporting & Analytics Sentiment Analysis Network Analysis
Social Media Monitoring
Job Boards & Ads Employment
Brand
Customer Satisfaction
Anonymous Feedback
Tools
Pulse Surveys
Annual Survey
Performance Check-ins
Exit Interviews
Performance Appraisals
The context of people analytics has changed
Recruiting & Workforce Planning
Comp and Benefits, Rewards
Performance Succession Engagement
Learning & Leadership
HRMS Employee Data
Engagement & Assessment
+
Sales Revenue Productivity
Customer Retention Product Mix
Accidents, Errors, and Fraud
Quality Downtime Losses
Groundbreaking new insights and tools for managers to make better decisions
Data management, Analytics, IT, and Business Consulting Expertise
+ =
Defining People Analytics
Location, Travel, Meeting Time
Organizational Network Analysis
Sentiment, Heart rate, Voice +
People Analytics: Taking Off
2015 2016 % Change
Performing multi-year workforce planning 38% 48% + 26%
Correlating people data to business performance 24% 39% + 63%
Correlating people data to business performance (% excellent) 5% 11% + 120%
Using people data to predict business performance 28% 36% + 29%
Using people data to predict performance (% excellent) 4% 9% + 125%
Progress Rapidly Accelerating
Deloitte Global Human Capital Trends, 2016 and 2015
Plan
Correlate
Predict
Benefits & Compensation
Hiring Recruiting E-Learning Performance Talent Network Based
Applications New Systems of
Engagement
15 Year Evolution of HR Systems M
AR
KE
T G
RO
WT
H -
AD
OP
TIO
N
2 0 0 0 2 0 1 5 P R O G R E S S I O N O V E R T I M E
Compensation
HRIS Benefits
Administration
Applicant Tracking
Recruiting Sourcing
Learning Management
Workforce Management
Succession Management
Performance Management
Integrated Talent Mgmt
Analytics Tools
Social Recognition
Network Recruiting
HRMS + Talent + Workforce Management
Self-Service Apps
Personality and Pre-Hire
Culture Assessment
Predictive Analytics
Real Time Engagement
Mobile Apps for HR
Process Automation
Integration & New Talent Apps
Analytics Driven “Systems of
Engagement”
Apps that “Make Work Life
Better”
Employee Feedback Pulse Surveys
Wellness Life Balance
Video Learning MOOCs, Career Devt
Culture and Self-Assessment
Work Productivity
Integrated Self-Service
2016 and Beyond: A New Set of Disruptive Applications M
AR
KE
T G
RO
WT
H -
AD
OP
TIO
N
2 0 1 6
Pulse Survey
NextGen Engagement
Mobile Feedback
Fitness Self-Tracking
Location and Travel Support
Culture Assessment
Self-Assessment
P R O G R E S S I O N O V E R T I M E
Video Learning
Video Sharing
Gamified Onboarding
Career Planning
Help Desk Case Mgt
Integrated Self-Service
2 0 2 0
Communications Messaging
Virtual Work Management
Document Management
Goal Sharing Goal Tracking
The New Organization: Different by Design Goals
Meaningful Culturally Aligned
Transparent Agile
Developmental