As C-suites focus on business’ evolving role in society, they find their organizations battling skill gaps, workplace shifts, and a more empowered workforce.
Amid concerns about automation, the need for new skills, an aging workforce, and tightening labor markets, the make-or-break issue facing companies this year is the need for realignment among the C-suite to focus on business’ evolving role in society.
In its 2018 Global Human Capital Trends report, The Rise of the Social Enterprise, which can be viewed on its digital-first, progressive web app, Deloitte also examines the increasing expectations of the individual and the breathless pace at which technology is shaping organizations’ human capital priorities.
As society grapples with daunting demographic, technological, and social challenges, people want business leaders to ll the gap, but our research shows they have a long way to go,” said Erica Volini, principal US human capital leader at Deloitte Consulting LLP.
“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. 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.”
With more than 11,000 HR and business leaders weighing in, this year’s Global Human Capital Trends report is the largest longitudinal survey of its kind. Respondents overwhelmingly point to the need for a symphonic C-suite—a team-based, cross-disciplinary approach to tackling complex issues—with 85% regarding this trend as important or very important.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”3,4,5,6″ ihc_mb_template=”3″ ]
Survey results show companies where C-suite executives regularly collaborate are one-third more likely to be growing at a rate of 10% or more than companies whose leadership operates in siloes. Despite such an approach being necessary to advance the enterprise, however, 73% of respondents said their executives do not regularly collaborate.
Filling society’s leadership vacuum
Increased transparency and heightened political awareness have drawn widespread attention to business’ role in society as a driver of change.
Organizations find they are increasingly expected to exercise their ability to do social good, both externally for customers, communities and society, as well as internally for their employees.
True social enterprises must take a total stakeholder approach to pressing public issues to maintain their reputation and relevancy.
With more pressure on businesses to be good citizens and engineer solutions to critical social challenges, citizenship must be a core part of an organization’s identity and mission.
In fact, 77% of survey respondents cited citizenship as important or very important. According to the Deloitte Millennial Survey 2017, millennials’ high expectations for corporate responsibility is a strong contributor, with 76% regarding business as a force for positive social impact. Yet despite the emerging link between social impact and companies’ financial performance, only 18% of respondents say citizenship is a top priority in corporate strategy. At least 34% have few or poorly funded citizenship programs, and 22% are not focused on this at all.
“Corporate citizenship is now a CEO-level strategy and critical to a company’s bottom line” (…) “It’s not about check-the-box CSR initiatives, but integrating citizenship, fairness, inclusion, and purpose as core values across work practices. Customers and employees alike are holding companies to higher standards than ever before and rewarding companies who demonstrate socially-conscious behavior with unwavering loyalty.”
Josh Bersin, principal at Deloitte Consulting LLP and founder and editor-in-chief of Bersin.
Internal and external social forces are also driving attention to the aging global workforce.
Extended life expectancies raise questions on how long careers will last and how aging workers will impact economies and public policy. 15% of survey respondents report that their organizational perspective is that older employees are getting in the way of rising talent.
Despite the aging global workforce and the competitive advantages older talent offers, 49% of respondents indicate their companies have done nothing to help older workers find new careers as they age, and another 15% say older workers are viewed as an impediment to rising talent.
However, the aging workforce remains an untapped resource of experience and knowledge for social enterprises to use to their advantage.
As constituencies look to how companies treat their own employees, tackling the alternative workforce takes center stage for socially-conscious organizations. By 2020, 37% of organizations expect a growth in contractors, 23% in freelancers, and 13% in gig workers.
Despite this anticipated growth, only 16% said they have an established set of policies and practices to manage this variety of worker types. 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.
In the past year, organizations have become laser focused on how automation-induced job shifts will impact individuals.
The Deloitte research shows that more than 4-in-10 companies believe automation will have a major impact on jobs, and 61% are now actively redesigning jobs around AI and robotics.
Additionally, 72% of HR and business leaders rated the topic of AI as important or very important.
Against this backdrop, companies and individuals realize the traditional career model is becoming defunct. 47% of those surveyed consider building new career models and skills as very important. More than 54% have no programs in place to build the skills of the future, and only 18% feel they give employees opportunities to develop themselves.
Espousing their role as drivers of change in the social enterprise, companies need to work to develop and implement robust solutions to decrease the growing skills gaps.
In addition to investing in employees’ professional development, organizations must also rethink how they invest in their employees on a personal level.
43% of those surveyed say employee well-being reinforces their organization’s mission, 60% say it improves employee retention, and 61% say it improves productivity and bottom-line results. However, according to the Bersin research, only 3% of companies think their reward offerings are very effective at motivating talent.
In a new social enterprise, companies must explore more frequent rewards and other incentives like vacation time or student-loan forgiveness.
“Personalized incentives and well-being strategies are key differentiators in talent acquisition and retention, particularly in a tight labor market,” said Volini. “Once-a-year reviews and bonuses are table-stakes in today’s enterprises. Expanding rewards and well-being strategies is critical for the C-suite if they want to attract and retain the right individuals.”
With the deployment of AI, robotics, automation, and people analytics showing no signs of slowing down, companies are reconciling a demand for human skills and the need for increased productivity.
While 72% of respondents see this area as important, only 31% feel ready to address it.
“Automation is here to stay and will improve scale, speed, and quality, but it’s important to remember that as routine work is automated, new jobs will be created—jobs that are more service-oriented, interpretive, social, and play to our essential human skills. Only companies whose C-suite embraces this transformation and redesigns how work gets done to leverage these skills will be able to stay a step ahead of their competition.”
Brett Walsh, global human capital leader at Deloitte Global.
Executives anticipate a growing requirement for complex problem-solving (63%), cognitive abilities (55%), and social skills (52%).
To that end, 70% of respondents believe workers will spend more time on collaboration platforms in the future and 67% anticipate a growth in “work- based social media.”
As a flood of new workplace communications tools augments team-based work, 47% of organizations cite the productivity of the hyperconnected workforce as a very important issue.
As technology permeates the workplace, people analytics is at the top of executives’ minds, with 84% of respondents rating it as important or very important, while only 10% of respondents feel very ready to deal with this challenge. With 64% of companies actively managing legal liability related to their organization’s people data, only 22% have excellent processes to safeguard this data, exposing them to additional risks that can threaten their status as a social enterprise if these are not proactively managed.