June 27, 2016    7 minute read

How Human Resources Models Define The Future Organisation

Future HR    June 27, 2016    7 minute read

How Human Resources Models Define The Future Organisation

The challenges and importance of leading, managing and retaining talent have risen significantly over the past decade. In response to the financial crisis, many organisations employed cost-cutting measures which in turn decreased employee morale. In addition, with 80 million people born between 1945 and 1965 (“baby boomers”) expected to exit the workforce in the next decade, generational shifts are forcing organisations to adapt faster to the needs and desires of the younger generations.

Despite organisations looking for ways on how to engage and retain younger talent, employees in two age brackets – those born between 1960 and 1980 (“GenX”) and those between 1980 and 1990 (“GenY”) – are leaving their managers and not organizations with the frustration of a workplace characterized by significant decreases in productivity, increases in workplace conflicts and turnover caused by inadequate administration.

In its recently published 2016 Global Human Capital Trends report, global accountancy and management consulting firm Deloitte & Touche states that organisations are redefining themselves. After years of struggles to drive employee engagement and retention, improve leadership effectiveness and build a meaningful corporate culture, 92% of executives see a need to redesign the organisation itself thus directing us to an entirely new model of management.

New age developments might provide the tools for achieving the much-needed transformation. The new structure transforms its Human Resource (HR) function in five key areas to better serve its employees. The new organisation is:

Digital

The HR function must go digital. HR Departments need to work with IT to design and develop apps that bring innovative and easy to use solutions to all areas of the process in a single module. These ERP-like applications should manage everything from the recruiting process, compensation and payroll to video-based learning, talent analytics, and performance management.

HR must leverage on talent analytics to build a highly valuable database about people’s history, their experience at work and how they progress in their careers. This data is then used to identify specific solutions that tackle major business issues such as sales productivity, product quality, risk, growth or customer retention. Several cloud-based analytics vendors are now offering outsourced retention prediction and sentiment analysis tools that can indicate organisations which employees are more likely to quit, what sectors are poorly managed and which leaders are underperforming.

Engaging

Today’s leaders are “team leaders” rather than “top-down executives”. With research showing that companies which excel at leadership development, and see outsized returns from this investment, spend four times more than those which do not take it seriously, a new model of leadership is emerging. The focus on front-line and Millennial leadership development is growing rapidly – these new type of leaders are empowered by their ability to set an example, empower and encourage others as well as their ability to drive change, alignment, and inspiration rather than by their hierarchical position. Today’s high-performing companies promote young leaders at a highly accelerated rate and enable them to learn on the job.

The performance review process also faces a complete overhaul. More than 80 percent of Millennials, for example, expect to be able to give their bosses a performance appraisal. Companies must develop a feedback culture. The existing process is too complex. In fact, 88% of managers believe it is not worth the time put into it, the report says. Also, the process is not developmental enough. Building a sense of engagement and further enhancing the employee’s skills are what organisations aim to achieve. By simply giving employees goals and a rating, businesses are not helping accomplish this mission.

Advanced workforce analytics is part of moving beyond the annual performance review to better identify those individual contributors most likely to be successful as managers or future leaders. People in their 20s and 30s are often ready for far more responsibility than they currently hold. New tools show that intelligence, agility, self-management, and self-discipline are the characteristics of high performers, not work experience. These top performers will learn leadership by doing it. Research shows that developing a solid coaching and mentoring program helps drive employee engagement and achieving an innovative culture

Human-Centered And Design Thought

The digital focus of HR is all about changing the way an organisation serves and supports employees. By applying design thinking to jobs, we can concentrate on the “experience” rather than the “programs”. Employees now demand a brand from their employers the same way organisations offer a brand experience to their customers. This experience starts right from the moment of application to the employee learning and development process.

With the arrival of new technologies such as free online learning courses, high-quality video-based educational content and millions of blogs, articles and other materials, learning has become an “employee-owned” process. Organisations must study their employees’ training experiences and create an engaging learning process on the way. When employees do not find the education they need, they often look elsewhere (or even change jobs). Deloitte’s research shows that “availability of learning” is one of the biggest factors in employee retention and engagement. Gone also are the days of the typical 9 to 5 workday. Today’s employees demand flexibility, meaning, and autonomy at work, stressing the traditional role of management

Inclusive

The HR function needs to listen more to internal clients to understand where their culture and management needs to change. In recent years we have seen numerous stories around the globe on the lack of diversity within work environments, the lack of presence of women in executive positions and the role of “unconscious bias” in hiring, promotion and pay. Deloitte’s research points out conclusively that the highest-performing companies embed “inclusion” into talent practices everywhere in their organisations. But diversity and inclusion go far beyond race and gender, “being inclusive means creating an environment in which people feel, involved, respected, valued and connected – and to which individuals bring their ‘authentic’ selves (their ideas, backgrounds, and perspectives) to the team and the business.”

Decentralised

Due to the rapidly evolving business context and unstable economy, companies are now concentrating on becoming more agile and customer-focused causing traditional enterprise models to face obsolescence. To achieve this goal, organisations are shifting their traditional hierarchical structures toward more horizontal, interconnected and flexible working teams.

The new models are depicted by a high degree of empowerment, strong communication and rapid information flow. Employees have found that the traditional top-down management structure is just too slow. Teams are now empowered to reverse the traditional structure and set their goals and make their decisions within the context of working towards a bigger objective, strategy or business plan while promoting values such as transparency and openness.

Next steps

Employee engagement differences are very likely to continue existing between generations. But far more than a generational issue, these changes are part of a wider and global trend towards more sustainable and inclusive workplaces. Organisations have the responsibility to respond rapidly to these trends if they wish to keep their competitive advantages.  The future of the organisation is now. We do have all the resources, perhaps what some are missing is the will to make it happen.

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