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Global Human Capital Trends - Deloitte's 2021 Report

Posted by Mathew French

23 February 2021

Every year, one of our most popular Blog posts is our summary of Deloitte's annual 'Global Human Capital Trends' report. Given the amount of disruption that's occurred in the last twelve months, it is surprising that this year's report has been published much earlier than usual. Then again, perhaps the disruption created some urgency in making their annual benchmark report available. If you want to know what's changed and what to keep an eye on, then this week's HR Blog covers all the highlights. Essentially, it can be summed up in this sentence: "Making the shift from 'survive to thrive' depends on an organisation becoming distinctly human at its core - a different way of being that approaches every question, every issue, and every decision from a human angle first." 

Global Human Capital Trends Blogs from Previous Years

Before you dive in, here are the links to all the Blogs we've done in previous years to summarise these annual reports (so you don't have to read through them all).

The Social Enterprise in a World Disrupted

According to Deloitte, the events of 2020 served to highlight the pitfalls of workplace strategies that envision moving from point A to point B on a static path. The year that was also illustrated that organisations which assume there are years, not months or weeks, in which to rethink outdated views and establish a new set of truths, were caught severely short. In an environment that can shift from moment to moment, that approach simply doesn't work.

What this means is that in a world of perpetual disruption, a focus simply on surviving restricts aspirations to merely accepting each new reality and working within it to accomplish what an organisation has always done. This type of survival mindset, one that views disruptions as not much more than point-in-time crises to simply be addressed, with the expectation that business can return to 'business as usual' once the crises are over, is now officially a fantasy.

The pursuit of thriving, in contrast, orients organisations toward welcoming each new reality and using it to reimagine norms and assumptions in ways that were not possible before. A thrive mindset recognises that disruption is continuous rather than episodic, and embraces disruption as a catalyst to drive the organisation forward. Businesses with this type of thrive mindset aim to create new realities that they choose and engineer for themselves; rather than having to react to that which is imposed from the outside.

Deloitte's ultimate assessment is that today’s environment of extreme dynamism calls for a degree of courage, judgment, and flexibility that only humans and teams led by humans can bring. A predictable world can be effectively dealt with by algorithms and equations. A messy world cannot, even in an age of increasingly intelligent machines.

Highlighted below are Deloitte's callouts for navigating the most important workplace considerations in 2021 and beyond.

  • Integrating workers’ physical, mental, financial, and social health into the design of work itself, rather than addressing well-being with adjacent programs: Embedding well-being into work design helps workers experience well-being while they do their work, not just when they’re away from it. This is good for organisations as well as workers. Work that addresses the human need for quality of life can motivate people to give their best when on the job.

  • Capitalising on worker agency and choice as the means to drive learning, adaptability, and impact: Giving workers more control over what work they do and what learning experiences to pursue can increase their engagement because it allows them to focus their efforts on things that truly matter to them. Aligning workers’ passions and interests with organisational needs can improve an organisation’s performance as well. The equation is simple, workers are more motivated and engaged in their work and learning.

  • Shifting HR’s role from standardising and enforcing workforce policies to a new responsibility of re-architecting work across the enterprise: For an organisation to truly become human at its core, HR must take the lead in embedding human considerations into every aspect of work, collaborating with business and other functional leaders to reimagine the what, why, who, and how of work across the entire organisation.

  • Creating teams and superteams that use technology to enhance natural human ways of working: The thoughtful use of technology makes it possible to change the nature of work so that it makes the most of people’s distinctly human capabilities. From collaboration tools that enhance teamwork and connection, to artificial intelligence technologies that can guide people in making decisions, technologies integrated with humans on teams can enable those teams to pursue new and better outcomes at greater speed and scale.

  • Developing and acting on forward-looking insights using real-time data to harness workforce potential: Understanding the workforce is the first step to aligning their behaviour with organisational objectives in ways that recognise workers’ needs, develop their capabilities, and respect their values and those of the organisation. Insights into what work is being done and how people are doing it can help organisations craft new ways of working that bring out the latent potential in every worker.

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Charting a Course From Surviving to Thriving

In this year's report, Deloitte also outlines the journey that organisations need to take to get from survive to thrive. They do this through assessing the workplace of the future through the lens of five of the 2020 Global Human Capital Trends.

  • Designing work for well-being - The end of work/life balance:

    • The Trend: Organisations are taking well-being beyond work/life balance by starting to design well-being into work, and life, itself.

    • Surviving: Supporting well-being through programs adjacent to work.

    • Thriving: Integrating well-being into work through thoughtful work design.

  • Beyond reskilling - Unleashing worker potential:

    • TheTrend: Organisations need a workforce development approach that considers both the dynamic nature of work and the equally dynamic potential of workers to reinvent themselves.

    • Surviving: Pushing training to workers from the top down, assuming the organisation knows best what skills workers need.

    • Thriving: Empowering workers with agency and choice over what work they do, unleashing their potential by allowing them to apply their interests and passions to organisational needs.

  • Superteams - Where work happens:

    • TheTrend: 2020 taught organisations that teams are even more important to thriving amid constant disruption than they might have thought before.

    • Surviving: Using technology as a tool to make teams more efficient.

    • Thriving: Integrating humans and technology into superteams that use their complementary capabilities to re-architect work in more human ways.

  • Governing workforce strategies - Setting new directions for work and the workforce:

    • The Trend: Organisations are looking for forward-facing insights about their work force that can help them quickly pivot and set new directions in the face of uncertainty.

    • Surviving: Using metrics and measurements that describe the workforce’s current state.

    • Thriving: Accessing and acting on real-time workforce insights that can support better, faster decisions based on an understanding of what the workforce is capable of in the future.

  • A memo to HR - Accelerating the shift to re-architecting work:

    • The Trend: Thanks to their handling of 2020's challenges, HR organisations have earned the right to expand HR’s remit to re-architecting work throughout the enterprise.

    • Surviving: Having a functional mindset that focuses on optimising and redesigning HR processes to manage the workforce.

    • Thriving: Embracing an enterprise mindset that prioritises re-architecting work to capitalise on unique human strengths.

Emerging Priorities In the Top 5 Most Important Human Capital Trends

According to Deloitte's research, the disruption of 2020 and the plethora of ways in which organisations adapted to change, pointed to the following emerging priorities for each of the 5 most important human capital trends.

  • Designing work for well-being - The end of work/life balance:

    • Individual: Workers should take the initiative in setting their own boundaries and making their well-being needs understood. They should influence the prioritisation and design of well-being by participating in the development of flexible and responsive policies and practices that balance individual needs with those of the team and the organisation.

    • Team: The power of teams comes from their ability to connect people with each other to unleash their collective capabilities. Tapping into those capabilities requires team members to understand and honour each individual’s well- being needs to create an environment in which the team can perform at its best.

    • Organisational: Leaders have a responsibility not only to invest in and promote well-being, but also to commit to it by designing well-being into work and making well-being a consideration as important as any other factor that affects the bottom line.

  •  Beyond reskilling - Unleashing worker potential:

    • Shift the supply and demand equation:

      • Build talent marketplaces that actively address both sides of the workforce supply and demand equation. Marketplaces can expose business and project needs to workers and can expose workforce skills and capabilities to the organisation.

      • Design roles to assume ongoing reinvention and include excess capacity earmarked for it. Cultivate worker passions to solve unseen and future problems. Reward workers who identify critical gaps and reinvent themselves to fill them, allowing workers to engage in lifelong learning while limiting the typical opportunity costs.

    • Centre workforce planning on potential:

      • Consider AI-enabled technologies that can help make sense of unstructured data from inside and outside the organisation and surface latent patterns such as the inferred presence of one skill based on the presence of others. It’s important to ensure that such new AI tools are integrated into the strategy and that the implications of their deployment are understood and accepted by all stakeholders. They will struggle to get traction if their value is not acknowledged and demonstrated.

      • Shift workforce planning approaches away from a reliance on top-down mandates, providing more agency to workers themselves. Empower workers to reimagine what, how, and where work gets done.

    • Drive towards real-time dynamic action:

      • Gather and act on workforce data that provides a real-time view of workers’ skills across the entire talent ecosystem. Ask forward-looking questions about workers’ desired future directions rather than tracking prescriptive metrics such as hours spent in training or credentials earned, and use the answers to encourage workers to make learning choices that benefit both themselves and the organisation.

      • Remember that teams are becoming the driving unit of organisational performance. Teams will be able to learn and adapt faster than individual workers alone, since teams of motivated individuals will challenge each other to come up with better, more creative ideas.

  • Superteams - Where work happens:

    • To create an environment where superteams flourish, executives should consider the following:

      • Set audacious goals. Stop focusing on how to improve existing processes and outputs and instead focus on defining new aspirations and outcomes.

      • Don’t stop with envisioning new ways to achieve those outcomes. Re-architect the work to put reimagination into action.

      • Avoid the instinct to use technologies only as an enabler for the work you already do. Instead, take a broader view of technology’s transformative potential to elevate the impact it can have on work.

      • Use technology to design work in ways that allow humans to perform at their best; working collaboratively in teams, breaking down silos to work across functions and businesses, creating knowledge, learning in the flow of work, and personalising and humanising the work experience.

      • Make the creation of superteams a cross-organisational imperative, leveraging the best thinking from HR, IT, and the business.

    • Governing workforce strategies - Setting new directions for work and the workforce:

      • Capitalising on worker potential: In 2020, organisations experienced an unprecedented need to redeploy skills and rethink work outputs as they struggled to deal with the changing nature of work and life. The reality of 2020 was a forcing mechanism for workers and leaders to consider how to apply their workforce in new ways to address new needs. Employers called on workers to extend their remit to all necessary tasks, whether or not those tasks fell within their preexisting roles. In tandem, jobs and roles underwent a de facto expansion to reflect what workers were actually doing. And workers proved that they were capable of reaching far beyond their job descriptions when their potential to do so was tapped.

        Tapping into the entire talent ecosystem: As many organisations were discovering they could expand responsibilities and roles, many also realised that a clearer view of, and greater access to, their entire talent ecosystem could make these efforts far more effective. The more precisely an organisation knows where to find the capabilities to do what’s needed, and the better able it is to access those capabilities, the more effectively it can deploy and redeploy people to plug operational gaps. This need is especially evident at organisations that are drawing heavily on alternative workers, whether because they are growing quickly and need extra workers to support their growth, or because they needed to reduce on-balance-sheet headcount and are using alternative workers as a more flexible substitute.

The Role of HR in Re-architecting Work

The report highlights the fact that some of the most immediate needs for the re-architecture of work fall within the remit of HR itself. Especially given the increasing criticality of work and work-related issues. The image below shows the progression of new outcomes that HR can drive in the context of the trends that Deloitte highlighted in this year's report.

The common thread running through these examples is a broadening of outcomes, an expansion of focus, and as a result, increased value to the organisation. To see this in action, consider the issue of remote work. A traditional HR response might focus on, for example, providing well-being subsidies to cover ergonomic chairs for home offices, and this is a positive action.

But by looking more broadly, HR can make a more substantive impact in addition to supporting workers’ physical health. Underlying the shift to remote work is the idea that leaders must manage, support, and develop people who are working in radically different ways. Understanding what effective leadership entails under these circumstances gives HR an opportunity to pull a thread to see what may be ahead. HR needs to do this to better understand what the organisation’s leaders are doing, to determine if they have the right competencies, to shape leadership development plans and performance indicators and incentives, and, ultimately, to prepare next-generation leaders for a future where much of the workforce may be working remotely and flexibly.Deloitte-Global-Human-Capital-Trends-Survive-Thrive

So what's the main takeaway from this year's report? To repeat, because it bears repeating: today’s environment of extreme dynamism calls for a degree of courage, judgment, and flexibility that only humans and teams led by humans can bring. A predictable world can be effectively dealt with by algorithms and equations. A messy world cannot, even in an age of increasingly intelligent machines.

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Topics: hr software, deloitte, Cloud HR Software, Global human capital trends, Codeless cloud HR software, Putting the human back in human resources, Re-architecting work, Workplace wellbeing, Superteams

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