Discussion has raged around the impact of new technology and the fourth industrial revolution, from AI and machine learning, to 3D printing and block chain. Some of the forecasts made in the Future of Jobs report that Mercer undertook with the World Economic Forum are playing out. We predicted a decline in office and administration roles due to machine learning. We have seen the impact of robotics in manufacturing and production, and the impact has been felt in functional areas including legal and HR with robo-advisors and chat bots coming into the fray.
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But now the discussion is shifting: what are the implications for the jobs and skillsets of the future, and what does it mean for our people? How do we ensure that they survive the transition – and beyond this thrive in a new world of opportunity and potential?
We’re now looking not just at how technology has changed existing roles, but also what they can be in the future. We are seeing opportunity for people to have more meaningful work and better careers.
A revolution in talent is accompanying this change in jobs as we need to respond to the most diverse array of needs and expectations yet:
This is causing clients to ask broader questions. Business leaders want to know: “how can we build for an unknown future?” 93% of executives are redesigning their organisational structure for increased agility (Mercer 2017 Global Talent Trends Study). This has huge implications for HR to create a culture that sustains change now and in the longer term.
Thriving in an age of disruption
Successful organisations are focused on “thriving”. Our Thrive research shows when people feel energised and they feel they can bring their authentic self to work, they are nearly three times more committed to the organisation (link to mercer Thrive study). This has three aspects:
Thriving Organisation. What is the organisation’s purpose and contribution to society? They are redefining success and thinking about how this permeates into performance and reward systems.
Thriving Workforce. Thriving workforces place a premium on adaptable individuals who bring diverse views, perspectives, and ideas into the workplace. In turn they nurture them and think about them from a whole person perspective
Thriving Individuals. If we get that right, then individuals and their teams will thrive. Thriving individuals say that they are growing and building tomorrow’s skills and they know they are contributing to something worthwhile. These organisations have made it simple and efficient for people to connect to knowledge experts and to develop skillsets quickly.
How to create a thriving organisation
Organisations on a mission to release energy and vitality focus on four areas:
Craft a future-focused people strategy: Organisations need to approach their people strategy with as much dedication as they do with their innovation and digital strategies. Thriving organisations treat their workforce as an asset in which to invest – not simply a business cost.
Curate a compelling employee value proposition: People want jobs that work for them. They want tools to manage work and life in a way that is personalised, flexible and unique to their own interests and aspirations.
Create a thriving work environment: Individuals thrive when work is challenging and purposeful, when they feel empowered to make decisions and when they are connect to colleagues and experts
Cultivate a lab mindset: To stay ahead in changing times, cultivate a mindset that encourages experimentation, design thinking, balanced risk taking and a climate of continuous learning.
Survive or Thrive: Craft a Future-Focused People Strategy
When dealing with change we have found that a future focused, integrated, people-centred strategy has been a helpful way to concentrate on what businesses need for their own people and objectives.
Mercer’s People Strategy Model
During change and disruption the workforce must be aligned with the company’s vision. Start by understanding the external causes of change and the trends, and understand how the business will move forward and grow future revenues. When defining the future, workforce planning beyond the traditional approach is critical. Businesses need to think through what they need versus what they have. Rather than conducting granular, job-based forecasting, companies need to think about organisational capability, leadership, and critical roles, and then ask what skills and knowhow do they need in those roles to target the strategy appropriately. The next phase is design solutions, essential to identify the few and HR must align on key staffing principles such as what they need to attract talent and use the talent ecosystem, how/what they will develop and about what culture and leadership is needed.
Many of our clients like this approach because it is disciplined but it is also flexible, as the following case studies show.
Case study 1: Tech Co
Most of our clients are in a time of change transition. In Tech Co’s case, their product mix was moving from hardware to software and changing from a product focus to a customer focus.
Traditionally, Tech Co worked in verticals; now they wanted to use horizontals to achieve an end-to-end customer focus. We identified the future-focused critical roles to suit the changed direction and analysed their promotion and talent management processes to ensure they really valued the broad multi-discipline skills and international experience they needed to keep the customer focus.
First, our modelling identified those employees that had the desired skill-set and/or mobility such as a change in location or function. We ran did some deeper statistical analyses to see if those employee experiences were consistent with what leaders said was valued e.g. - were these employees more likely to stay be promoted, have a pay increase, and have a higher performance rating?
We found there were some consistencies with what was needed. International exposure meant better retention and higher chances of promotion - a great example of alignment. Unfortunately, however those that changed function were 22% more likely to leave and 40% less likely to receive the same pay when they moved - (all other things being equal). An inconsistency between what was happening and what the business leaders said was important. Similar analysis on other critical roles raised another red flag on employees from acquisitions, who were much more likely to leave.
Consequently this company looked closely into how they could more pro-actively manage transfers and assignments because of their positive impact on the workforce and realigning goals for function moves. Finally they focused on post-acquisition experience to help support retention for these employees.
Case study 2: Entertainment Co
This was a very successful company with strong growth.
However, they were feeling the pain of this growth. Specifically, in their R&D function they found that they could achieve amazing outcomes but with huge pressure to the workforce; they knew employees were working long hours to hit goals, with lots of stress. However they couldn’t identify what do to.
We looked at several insights, at speed using quantitative and qualitative inputs. We looked at the organisational design and internal labour market. We did a capability audit and aligned it with the company’s leadership model and used existing data such as engagement survey results.
We found gaps in the leadership capability – what leaders were saying was needed wasn’t part of the existing leadership model. The internal labour market showed decisions were made at too high a level and weren’t being pushed down into the organisation, so the leaders needed to think about the leverage and structure. That had implications for the organisation design itself. When we compared with elsewhere in the industry, the R&D spans of control were very different.
We found some key areas to focus on which would alleviate those pain points and we also came back to the employees themselves to ensure their passionate work was more appropriate and less stressful.
Case study 3: Engineering Co
This case study is around the supply/demand dynamic and is about understanding the existing workforce.
This organisation was an engineering workforce predominantly based in the UK. The employees were highly tenured and very experienced. The company knew that they had a retirement risk, but they hadn’t quantified it. They accepted the retirement bubble, but they weren’t too worried as they had a new graduate programme in place for two years which they believed would close the supply gap.
However, what they had not factored in was the impacts of changing technology and complexity which meant an upcoming increase in the number of people they would need. The supply (the pink line) dramatically declines over the next few years as the retirement bubble hits (after two years’ time) and keeps hitting year on year. So, we decided to factor in a “new” supply (yellow line) which would show the change because of the graduate programme. This is the “aha!” moment. The yellow line closes the gap but insufficiently, and that quickly becomes a big issue.
They needed to continue with the graduate programme but also think about accelerating the movement of people into these highly tenured roles. The insight -based approach allowed us to show management that changing the experience profile of feeder roles was necessary – a conclusion they would have dismissed at the beginning of the process. They could see what they did in past was not sufficient. And the good news was they had time to change it. Rather than waiting two or three years, panicking and putting operations on hold, they could think ahead and manage it and come up with creative solutions around the internal career path.
Hopefully this has given you some insight into the different ways your people strategy can be applied. This is just the start of the journey. The next step is to learn how to: Curate a distinctive employee value proposition.
No matter what stage of your journey, if you would like to speak to one of our experts about your people strategy, please get in touch via the form below.