Focus on the Human Operating System

May 22, 2018

Focus on the Human Operating System

It’s no longer far-fetched to imagine people using implanted microchips as their metro pass or walking out of a grocery store without physically paying. If this is how people choose to live, how will they want to work?

This year will be defined by how ambitious organizations are in building their workforce for the future. According to the 2018 Mercer Global Talent Trends Study: Unlocking Growth in the Human Age, business leaders feel apprehensive and excited in equal measure about technology’s heady mix of challenges and possibilities. After years of fretting about disruption, there is a readiness to take action as we reimagine a new future.

Mercer’s findings reveal organizations are poised to take advantage of human resilience, empathy, creativity, and strategic thinking. In pursuit of new technologies, it has become easy to lose sight of how people connect and collaborate, how teams co-create, and what motivates different segments of the workforce. To drive change, employers are focused on human skills, such as innovation, a global mindset, and complex problem solving that are highly sought-after in a period that has been dominated by disruption. Indeed, 94 percent of companies have innovation on their core agenda and are looking towards their people to drive this.

This new focus is exciting because it requires, and benefits from, executives and HR working hand-in-glove to drive success in a competitive climate. In particular, five key takeaways emerged:

1. Change is a core competency.
The C-suite believes we are entering a state of permanent transformation of structures, cultures, and people that have regeneration in their DNA. Fully 96 percent of companies reported planning an organization redesign this year, highlighting that the ability to change—and change at speed—is core for success.

Still, it will take time to achieve a vision of scaled agility. Only 18 percent of companies consider themselves change-agile today. Change agility requires a quickened pace of learning and giving more power to individuals. The challenge is balancing empowerment and governance, efficiency versus reskilling for tomorrow. Traditionally, executives have shown a bias towards buying talent (compared to HR’s tendency towards “building” it), but the reality is aggressive strategies on both dimensions are falling short. Fostering lifelong learning in employees has to be part of the equation to drive sustainable growth, particularly as more than half of executives predict at least one in five roles in their organization will cease to exist by 2022. This requires creating a virtuous circle of identifying skills for the future, making relevant learning accessible, and providing opportunities to apply that learning in the workplace.

2. The “thrive contract” is king.
A focus on automation and AI risks reducing work to a list of tasks and losing sight of the bigger picture. Rather than slipping into what Professor Daniel Cable of London Business School calls the “commute to the weekend” mentality, it is important to help people find meaning in what they do and empower them to be active participants in the change journey. For employees who are thriving—those who are fulfilled personally and professionally—one thing stands out: 75 percent say they work for a company with a strong sense of purpose (almost double those who don’t feel like they are thriving). Yet, firms are out of sync with only 13 percent of organizations differentiating their EVP with a purpose-driven mission today.

As organizations push forward at speed, taking people along on the journey is crucial in a tight talent market. Yet, our findings suggest current efforts don’t meet expectations. A top ask from employees this year is for “leaders who set a clear direction;” across the study those lower in the organizational hierarchy feel less “fit for the future” than more senior ranks. Employers need to work harder to convey a compelling vision that resonates personally with both existing and future workers.   

3. Make flexibility permanent.
The quest for flexibility is even more pronounced in 2018: Most employees want their company to offer more adaptive work options than they do today. The good news is more than 80 percent of executives view it as a core part of their company’s value proposition (up significantly from 49 percent last year). This is hardly surprising as flexible working allows organizations to tap into a wider talent pool—including parents, caregivers, and older workers—and gain access to skillsets that are otherwise in short supply. It can also help with gender diversity as organizations that make flexibility a core tenet tend to have better current and future projections of women in their workforce.

The bad news is that organizations are still grappling with how to apply flexible working, with just 3 percent reporting they are industry leaders in this area. The ability to apply it fairly is a top barrier to implementation, according to HR. Considering only the traditional dimensions of when and where work is done is insufficient; it’s about rethinking what work is done, how it is done, and by whom—exploring what tasks can be automated and where human time can be spent most productively.

4. Match skill supply and demand, intelligently.
Executives’ appetite for growth often outstrips capacity to supply talent quickly. How can organizations respond? The answer lies in moving beyond hierarchical models anchored in HR processes and embracing a talent platform approach that matches skill supply creatively with work demand. The C-suite is already starting to advocate this move by supporting access to talent, not ownership; executives claim the best return from talent investment this year would be speeding up the movement of jobs to people and people to jobs.

Enhanced data and analytics fuel a talent platform approach. This would have been difficult to accomplish even five years ago, but now employees and technology have caught up. And with two in five companies planning to “borrow” more talent in the next 12 months, we are moving in the right direction. We are witnessing a shift in how HR can add value—be it automating feedback collection based on actual work interactions or making performance reviews portable by storing talent records via blockchain. Now, it’s HR’s turn to keep pace with what data is needed and, more importantly, what data might no longer be needed. Executives say the most valuable talent analytics are those that help to determine whether to buy, build, or borrow talent (but only 30 percent of HR provides this today). Mercer’s findings reveal HR is most confident about using technology to collaborate and to manage staffing agencies, but less confident about using digital platforms to auction projects or their ability to retain institutional knowledge with a more dispersed workforce.

More, too, needs to be done to understand people’s backgrounds, skillsets, and future aspirations if we are to match core and contingent workers with business needs in real-time. Today, only half of workers believe their company understands their true skill sets and interests—without which a platform model is arduous to execute.

5. Augment the human work experience.
Digitization transforms how organizations build diverse workforces, embrace flexible working, improve teaming, and analyze performance. It also puts a stake in the ground that companies care about their employees’ experiences at work. There is potential here: less than half of employees say they have the digital tools to do their job and only 43 percent of workers have a digital HR experience.

This matters because if change at speed is the panacea, technology must be part of the solution. Companies that are digital report greater confidence in their ability to adapt and report that HR is pivotal in proactively managing talent risks. This year enhancements to performance management and learning systems continue to be in focus, but the research suggests great value might be unlocked by doubling efforts on predictive analytics and career applications, such as portals and pathing tools, and enabling remote working and virtual collaboration.

What is clear is that as companies reimagine work, we need to take great care of the human operating system that powers them. Unlocking growth in the human age is about diving head first into the future and laying a path for others. Success depends on how equipped managers are to execute on leaders’ ambition, and how willing employees are to jump into the fray with them.

The Authors: 

Kate Bravery is Global Practices Leader at Mercer, which delivers advice and technology-driven solutions that help organizations meet the health, wealth, and career needs of a changing workforce. She is the lead for Mercer’s annual Global Talent Trends Study, which this year features insights from over 7,600 board directors, senior business executives, HR leaders, and employees from 21 industries and 44 countries. To learn more, download the 2018 Global Talent Trends Study: Unlocking Growth in the Human Age. For more information, visit www.mercer.com or follow Mercer on Twitter @Mercer.