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Organisational Restructure White Paper - Growth By Design

Posted by Mathew French

25 May 2017

According to Mercer's 2017 Talent Trends 2017 Global Survey, 93% of business executives plan to make some type of design change or transform their organisational structure within the next two years. According to the survey results, organisational restructure and re-design is no longer simply about evolution, 'to stay ahead, organisations are transforming structures and jobs in a desire for increased efficiency, agility, and customer intimacy. Ensuring that the People agenda is not lost amid the drive for change will be critical to sustainable growth.'

Redesigning The Organisation

The Talent Trends Survey data indicates that executives globally recognise that stasis and the staus quo are a formidable enemy of business growth. Surveyed executive acknowledge that existing organisational structures often impede, rather than accelerate, change and that a heavily layered or hierarchical organisation structure is a hindrance to the agility needed in today’s competitive markets.The result is that leadership teams across the globe are driving an aggressive change agenda in an attempt not just to keep up, but to stay ahead of the game. 93% of business executives plan to make a design change in their company within the next two years and this trend is consistent across all geographies and industries.

Mercer's report indicates that:

'Vertical hierarchies are being replaced by simpler, more horizontal organisational structures. This change reflects a desire for greater efficiency and lower costs, closer relationships with customers, and increased agility and innovation. Companies in different industries are going about this in different ways. Executives in the Auto, Energy, and Healthcare sectors are flattening their organisation structures, while those in Financial Services and Logistics are focused more on moving support functions to shared services. Consumer Goods organisations are also creating special units to handle project-based work.'

Mercer's survey data also illustrates interesting differences by geography. Greater efficiency is the number one driver of organisation design changes in the majority of the countries they studied (including US and UK), however it is less of a focus for executives in Japan (who are committed to improving collaboration) and in Hong Kong (for whom innovation is paramount).

Mercer's report states:

'The organisation in a “world is flat” universe pushes decision-making authority further down the chain, thus employees must be more self-reliant and skilled enough to independently make day-to-day decisions. This requires a shift in how we support employees at different stages of readiness, career, engagement, and work status. What do employees say they want? When asked in which areas their company should provide more support, simplified approval chains to enable quick decision making ranked third globally. This may reflect their company’s current challenges in this area — with only 15% of employees saying that their company excels at this today.'

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Image Source: Mercer, Talent Trends 2017 Global Survey

Change-Agile Methodology

One methodology gaining traction in organisational re-designand re-structure is 'change-agile,' or agile change management. Agile change management is a set of principles that can help change practitioners focus efforts on the most important activities, determined by customer value and stakeholder impact. It provides a lean, flexible and iterative approach to achieving sustainable change in an agile environment.

What Does it Mean to be a Change Agile Organisation?

A change-agile organisation prioritises a flexible culture that is able to pivot easily so as to stay ahead of rapidly changing market trends. Thus, employers who embrace change and empower their workforce will be more successful.

However, according to the Talent Trends 2017 Global Study, the HR agenda for 2017 demonstrates some misalignment that may fail to leverage what employees report as important, which can spell the difference between a thriving and a stagnating workforce. Here are some key findings from the study:

  • Health over Wealth: While 61 percent of employees globally rank their health as more important than their wealth or career, and 47 percent indicate they expect their workplace to become more focused on employee health in the next few years, health and well-being ranked second to last on HR leaders’ list of top talent management priorities for 2017. Navigating the changing talent ecosystem by redesigning future roles and supporting employees’ health and wealth needs is becoming a market differentiator.
  • Wealth over Career: While nearly all (97 percent) of employees report that they want to be recognised and rewarded for contributions beyond the organisation’s financial metrics, only slightly more than half (51 percent) think their company does such rewarding well. Furthermore, fair and competitive compensation ranked at the top when employees were asked what would make a positive impact on their work situation, yet rewards ranked near the bottom of priorities for HR leaders.
  • Gig is Big: Flexible work arrangements are important to employees, with more than half reporting that their direct managers and company leaders are supportive of it (61 percent and 57 percent, respectively). Nevertheless, 50 percent of employees believe working remotely or part-time can adversely impact promotional opportunities.
    And while more than three-quarters (77 percent) of full-time employees would consider working on a contingent or contract basis, neither business executives nor HR leaders have embraced these new forms of employment as much as expected or desired. Both the leadership team and HR leaders agree that they do not expect the 'gig economy' to have a major impact on their business in the next two years. But the remarkable growth of the gig economy makes it a risk for any organisation to ignore opportunities for people to work more independently.
  • A Relevant Experience: Beyond flexibility, personalisation is essential for creating an experience that resonates with employees. Less than half (49 percent) of employees say that their company understands their unique interests and skills, while 53 percent want their company to increase this understanding and help them invest in themselves. Employees are increasingly bringing a consumer expectation to the workplace, since it is how they engage in almost every aspect of their lives. Consumer-grade personalisation can encourage a more authentic environment in which employees can excel.
  • Digital Divide: In technology, HR lags behind on expectations of both executive leadership and employees. Business executives (61 percent) believe technology at work, including automation, robotics, machine learning and wearables, is the workforce trend likely to have the most impact on their organisations in the next two years. Yet, less than half (49 percent) of HR professionals agree. Employees report that just one in five organisations provides a digital experience for interacting with HR.

The Mercer report shares insights from more than 7,000 perspectives, comparing the views of senior business executives, HR leaders, and employees from organisations around the world. The results highlight the necessity for organisations to commit to a change-agile strategy for organisational redesign and restructure if they intend to remain competitive. One of the best ways for HR Professionals to role-model organisational change and build a foundation from which to execute wider change requirements is through tranforming their own systems and processes. Restructuring HR through technology has the potential to provide your business with the capacity to become a change-agile organisation. You can discover more about how to restructure HR through tech with our free white paper.

Your Restructure HR Using Tech White Paper

Topics: HR Change Management, organisational restructure, HR trends, HR technology, People Management Software, Cloud HR Software, Agile change management, Change-agile, Growth by design, mercer talent

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