Gartner Top 3 HR Insights for 2018

A focus on organizational culture, manager coaching and equitable pay will set the foundation for improved performance outcomes in 2018.

Today’s disruptive workforce trends have caused a lot of upheaval. But amid challenges such as remote workers, shorter employee tenure and frequent team structure changes, real life has changed for the better in ways both small and profound.

Most obviously, the ease of finding the exact product you want, securing a compelling price for it and getting it — delivered to your home, for free — has moved from a rarity to a daily experience. Regardless of industry, category or geography, organizations worldwide feel pressure at every turn to meet higher expectations, often in the face of very real cost concerns.

What’s learned as a customer quickly becomes the norm for employees in the workplace

As it turns out, expectations not only cost money, but also lack boundaries. What’s learned as a customer quickly becomes the norm for employees in the workplace.

Similar to customers, employees today have higher expectations of everything from coaching and development opportunities to compensation. And for their part, organizations too have heightened expectations of employees. For example, they expect them to embrace constant organizational change, become ever more “digitalized” and take on more responsibility in flat organizational structures.

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In the thousands of conversations that CEB, now Gartner, had last year with CHROs around the world, navigating heightened employee expectations emerged as a major concern. These three insights can help.

Create an organizational culture that performs

Culture is one of the most discussed talent issues today, and organizations expect CHROs to invest in and deliver on culture initiatives. But despite most companies now spending more than $2,000 per employee on culture management activities, just 3 in 10 HR leaders are confident that their organizations have the culture in place for future business performance.

The best approach is for organizations to shift from a people-focused culture to a process-focused strategy

This is because typical culture management activities rely heavily on changing some aspect of employees. For example, most companies communicate desirable traits to employees and ask senior leaders to model the culture they require. But the greatest impact on workplace culture is when senior executives emphasize these qualities in how they manage business processes, which very few of them do.

The best approach is for organizations to shift from a people-focused culture to a process-focused strategy. Create a process to ensure employees understand the culture, equip them to apply the “how” of culture in their day-to-day work and require leaders to design processes that support this culture.

Companies that make these shifts can achieve a high workforce-culture alignment, resulting in a 9% increase in revenue performance and a 22% increase in employee performance.

Rethink expectations for manager coaching

Organizational structure, performance management and career expectations have changed how employees work today. In fact, nearly 40% of the skills employees apply on the job were gained within the past year. To do this, L&D relies on managers to take a continuous “always-on” approach to developing employees across a broad range of skills. But this “coaching” approach overwhelms managers, causing manager quality to stagnate and employee performance to decrease by 8%.

Personalize coaching to resonate with employees

The best type of managers act as “connectors” to pair up employees with mentors and also to personalize coaching to resonate with employees, power the team for peer development, and partner employees with new contacts to expand their networks and experiences.

Organizations that want their managers to drive better team performance without alienating employees must shift their focus to developing such managers across the company.

Address pay equity today, not tomorrow

The workplace is becoming more diverse (by 2027 almost 60% of the U.S. labor force will comprise women and minorities), but progress toward equal pay for equal work has stalled.

Unfortunately, pay gaps are widening over time, and projections show that this will continue to increase by 0.17% every year. Companies that close gaps and maintain equity now will pay less than those that wait because the average cost to correct gaps increases by $439,000 annually.

There is a 16% drop in intent to stay when employees perceive a pay gap in their organization

Current ad hoc pay equity initiatives leave organizations open to increased legal, talent and reputation risks, as well as requiring significant work between wage adjustments. What’s more, there is a 16% drop in intent to stay when employees perceive a pay gap in their organization. Organizations can reduce risk by integrating assessments throughout the compensation life cycle and using open communication to address employee perceptions on the pay gap.

Gartner for HR Leaders clients can read the full insights in 2017-2018 Top Insights for Human Resources.

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