Growing the business will be the top enterprise-level business objective in 2019, along with improving operational excellence and executing business transformation, according to HR leaders responding to the Gartner 2019 Future of HR Survey. As HR leaders look to support these corporate ambitions, the survey shows their top three key initiatives in 2019 will be to:
- Build critical skills and competencies for the organization
- Strengthen the current and future leadership bench
- Improve the employee experience
“Gartner surveyed 843 HR leaders globally — at the enterprise, business-unit and subfunction levels — and these three initiatives clearly emerged as priorities for HR,” said Leah Johnson, Vice President, Advisory, Gartner.
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HR faces global workforce trends
These priorities for chief human resource officers (CHROs) and other HR leaders come amid prevailing headwinds from four key global trends:
- The hot labor market. Global unemployment rates continue to decline, and the market is especially fierce for critical roles, many of them related to digital capabilities. According to Gartner TalentNeuronTM, 47% of S&P 100 job postings in 2017 were for the same 37 roles, and 90% of S&P 100 companies recruited for those same roles. Strategic workforce planning is taking on new urgency as the complexion of the workforce changes and different skill sets emerge, evolve and expire.
- Digital disruption. CEOs are pursuing digital initiatives both to capture opportunity and to avoid being “Amazoned” away. In the Gartner Digital Enterprise 2020 Survey, 67% of business leaders agreed that if their company did not become significantly more digitalized by 2020, it would no longer be competitive. HR is under extreme pressure to lead the digital transformation of their company.
- Social and political change. For the business to grow, HR needs a productive workforce. Structural and social challenges such as pay inequity and the #MeToo movement are directly affecting employee retention and morale and reshaping executives’ employment contracts.
- Declining discretionary effort. Employee engagement is already low. Much of today’s workforce is restless and disengaged, and few companies can claim high levels of discretionary effort or intent to stay among their employees.
To counter these trends and support corporate business ambitions, the HR strategy will need to focus on key levers of improvement.
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Develop connector managers
The survey showed that building critical skills and competencies is a priority for 66% of HR leaders overall and 85% of heads of learning and development (L&D).
Ineffective managers are the single biggest problem today. Forty-eight percent of HR leaders say their organization’s managers are not effectively developing employees. One head of talent management describes the challenge: “We’ve experienced more change in the past few years than we ever have before, so we need our managers more than ever to be able to work in complex contexts with ambiguity.”
Focus on developing “Connector” managers — those who connect the right people and resources at the right time
Manager development, as well as L&D solutions and on-the-job learning, will be key. One important way to develop more effective managers is to identify the types of managers currently in the organization and to focus on developing “Connector” managers — those who connect the right people and resources at the right time. Connector managers are standout performance coaches, and triple the likelihood that their direct reports will be high performers.
Demand-driven succession management
Building the leadership bench is a priority for 60% of HR leaders overall and for 78% of talent management leaders. At issue are high-potential employees, succession management and leadership development — which is currently lagging.
Among HR leaders overall, 47% said their organization struggles to develop effective leaders, 45% reported their leadership bench lacked diversity and 45% said their succession management processes didn’t yield the right leaders at the right time. In 2018, the median development spending per leader was $419 — a number that 44% of organizations expect to increase in 2019.
Organizations expect more than 40% of leadership roles to be significantly different within five years
Traditionally, succession planning has assessed current roles and gaps in leadership supply. By switching to demand-driven planning, organizations can assess leadership needs that will enable the organization to achieve strategic goals, not just fill potential future vacancies in current roles.
This approach is more appropriate for the fast-evolving business conditions inherent in today’s digital transformation strategies. Most organizations expect more than 40% of leadership roles to be significantly different within five years. By using demand-driven planning, HR can hedge its bets in an ever-evolving landscape and generate twice the impact on leadership bench strength.
Fifty-one percent of all HR leaders and 62% of heads of diversity and inclusion said it is a priority to improve employee experience. That will require HR to address key elements of culture, the employee value proposition and employee engagement.
The problem today is that work experiences do not match the experiences of individuals outside the workplace. “Employees want their 9-5 to look like their 5-9,” says Brian Kropp, Group Vice President, Gartner. “And employees’ 5-9 lives are full of seamless, effortless experiences, largely enabled by digital technologies.”
Supporting what employees value, not just what they need, increases employee performance by 20%
Only 29% of employees agree that “HR really understands what people like me need and want.” Among surveyed HR leaders, 40% conceded that their organization struggles to bring the employee value proposition to life in employees’ day-to-day work.
Key to the solution is a change in focus for HR from just asking what employees want (or worse still, assuming what they want) to listening to what they need to determine what they really value. Supporting what employees value, not just what they need, increases employee performance by 20%.
Teamwork needed among HR functions
Not surprisingly, individual HR leaders tend to prioritize initiatives aligned with their subfunction — whether that is diversity and inclusion or talent analytics — but the survey showed these top three initiatives to be critical across HR roles in 2019. This creates significant opportunity for cross-functional cooperation among HR leaders.
For example, a head of talent analytics who prioritizes driving digital business transformation for the organization may not know that other HR leaders are doing the same. To align and capitalize on these important key initiatives, HR leaders must work across their functions, utilizing a wide range of HR resources and staff.