Anyone who has worked in a corporate environment for any length of time and isn’t in the C-suite knows that there is typically a very wide gap between what senior leaders believe is going on in their organizations, versus what people at lower levels know to be true about their work culture, work challenges and the daily reality of their work-lives. And in many of the organizations where my coaching clients work, the HR executives often have their pulse on the realities of work but are not considered a valued or integral part of the senior leadership team.
To study this issue in greater depth, IBM has launched a new global study on the future of work and human resources, polling over 1,500 HR executives in 20 countries worldwide, in response to mounting concerns over the widening skills gap and mounting challenges around people management during the Covid-19 crisis.
The latest findings from this IBM Institute for Business Value (IBV)’s executive study reveal a stark contrast in what C-suite executives, HR leaders and their employees really think about how their companies have navigated through the pandemic. Although nearly all executives put skills and talent at the top of their priority list to recoup and drive business transformation, CHROs and HR executives themselves don’t think their departments have the skills to achieve this.
Several key findings from the study include:
- C-suite executives now rank organizational complexity, inadequate skills and employee burnout as the top 3 greatest challenges their businesses will face in the next 2 years, and 84% of CHROs say over the next two years they will prioritize agility and flexibility in the workforce. Yet only 19% of HR executives say their HR function has the proper business acumen or capabilities to do so
- 74% of executives believe they’re helping their employees learn new skills needed to work during the pandemic yet only 38% of their employees believe the same
- Despite nearly 80% of C-suite executives say they’re supporting the physical and emotional health of their workers right now, only 46% of employees agree
To learn more about these findings, I caught up this week with Amy Wright, managing partner of IBM Talent & Transformation, and author of this report. She shares her in-depth take on the findings and how to bridge this gap between HR leaders, C-suite leaders, and their talent. Wright also explores the broader employment/skills crisis, addressing current labor initiatives and outlines top action areas outlined in the report that has driven real change today.
As the Managing Partner for IBM’s Talent & Transformation business, Wright is responsible for bringing innovative services and software to IBM clients to help with the transformation of talent across the business enterprise and the reinvention of the Human Resources function.
The new IBM Institute for Business Value (IBV) study, “Accelerating the journey to HR 3.0,” conducted in partnership with global independent analyst Josh Bersin of the Josh Bersin Academy, includes insights from more than 1,500 global HR executives surveyed in 20 countries and 15 industries. Based on those insights, the study provides a roadmap for the journey to the next era of HR, with practical examples of how HR leaders at surveyed “high-performing companies”—meaning those that outpace all others in profitability, revenue growth and innovation—can reinvent their function to build a more sustainable workforce.
Here’s what Wright shares:
Kathy Caprino: What are the key findings of the study, and what does it highlight about the large gap between what C-suite executives, HR leaders and their employees really think about how their company has navigated through the pandemic?
Amy Wright: Pre-pandemic IBM research showed that in the next three years, as many as 120 million workers in the world’s 12 largest economies may need to be retrained or reskilled as a result of AI and intelligent automation. That challenge has only been exacerbated in the midst of the Covid-19 pandemic. IBM found that as C-suite leaders accelerate digital transformation, they’re calling out inadequate skills among their biggest hurdles to progress.
Covid-19 has also permanently shifted the expectations employees have of their employers—employees now expect that their employers take an active role in supporting their physical and emotional health and providing training in the skills they need to work in new ways. Our research finds a significant disconnect in how effective leaders and employees believe companies have been in addressing these gaps.
For example, 38% of employees said they’re receiving training in the skills needed to work in this new way, compared to 74% of executives, and 46% of employees said their company is supporting their physical and emotional health, compared to 80% of executives.
There is increased urgency for HR to drive this transformation inside organizations, but to do so, HR itself must be reinvented, and the Chief HR Officer (CHRO) role must evolve as the CFO role did in 2008. Our new study uncovers the investments “outperforming” organizations are making in transforming HR and offers recommendations for functions to evolve to HR 3.0.
Caprino: What does it mean for the success of employees and organizations that CHROs and HR executives themselves don’t think their departments have the skills to address organizational complexity, inadequate skills and employee burnout?
Wright: Business leaders are looking to close the skills gap and cultivate a sustainable workforce amid COVID-19, but less than 4 in 10 HR executives report they have the skills needed to achieve their enterprise strategy. If people and talent are key to business success, there is a clear need for HR to rapidly transform to meet new workforce challenges presented by the pandemic. That includes adopting new ways of working like Agile methods and Design Thinking, gaining skills in areas like AI and analytics, and learning to operate within workflows that are made more intelligent and scalable via cloud computing, automation and more.
Caprino: What kind of new workforce opportunities and challenges are leaders facing because of the pandemic?
Wright: During the pandemic, the pre-existing skills gap became even more urgent, and we saw a permanent shift in employee’s expectations of their employers and the demands on safety and trust in the workplace.
This is an opportunity for organizations to rethink their workforce strategy and gain urgent buy-in and adoption from senior leadership. The pandemic has given leaders a new mandate to demand a rearchitecting of roles that better align with workplace strategies and offer more personalized learning opportunities for better employee engagement.
New approaches are being adopted at a higher rate than pre-pandemic—59% of organizations have accelerated their digital transformations since the start of the pandemic—some accomplishing years-worth of transformation in mere months. This opens the door for technologies such as automation and cloud-based applications to change the way work is done and improve outcomes that fill the gaps of a dispersed workforce.
Caprino: How are successful companies using technology to support their workforce?
Wright: During the pandemic, technologies like Cloud and AI became even more important for workforce engagement and support. For example, these technologies enabled organizations to get information to their employees in real-time and provide support while making the shift to remote work.
A good example of this is Burger King Brazil where IBM helped to create and deploy a new virtual agent, called TOP, using IBM Watson Assistant. Now, all employees can be more connected to each other and their leadership via a text conversation, in natural language, through the virtual assistant connected to their own WhatsApp.
The most frequent questions are related to salary, benefits and guidance on navigating the Covid-19 pandemic. On average, the solution has responded to 1,100 questions a day in April, more than 33,100 responses in the month.
Caprino: What are the three most important skills the CHRO must have right now at this moment?
Wright: The three most important are:
#1: Empathetic and Transparent approach
With empathetic leadership, this includes considerations for the safety of your workforce and building up their trust to guide the organization through disruptive times. There is a demand for a new kind of empathetic and inclusive business leader— one who can meet people where they are, listen with empathy, and foster transparent dialogue.
To build that trust, businesses need to drive more support for employee’s holistic well-being and help people be productive with consideration for the context in which they are most productive.
#2: Business Acumen
People and talent are more critical than ever for digital transformation. This requires the HR function to be a strategic partner focused on advising senior business leaders and solving business issues.
Currently only 19% of HR executives reported that the HR function is exhibiting business acumen. Across the board, HR leaders are looking to technology and new ways of working to enable strategic business insight, with a special focus on real-time data to make agile and evidence-based decisions.
#3: Agility and adaptability
To respond to external shifts, such as the global pandemic or other disruptive forces, and changing employee needs and preferences, organizations need speed and constant iteration. Today less than half of HR units have capabilities in design thinking and agile practices—however, among outperforming companies, 73% are applying design thinking and agile expertise to building out employee solutions.
Caprino: What are key steps HR leaders can take to reinvent themselves in order to help their businesses survive and thrive?
Wright: I see this wrapped up into three key areas:
First, place skills growth and measurement at the core and accelerate the pace of personalized continuous learning and feedback. HR leaders can take the lead by moving quicker when it comes to helping their organization establish a culture of continuous learning where skills are the core.
Second, become a health-oriented company supporting holistic well-being. HR leaders should help their organizations foster a new kind of empathic leader—one who focuses on individuals’ holistic well-being, meeting each person where they are, listening and responding with transparency, and personalizing how they coach and support each person and their productivity according to their circumstances.
Thirdly, accelerate the use and understanding of technology to scale up the HR function and make more real-time data-driven decisions.
These actions will collectively place the HR business partner as a strategic advisor to the larger business in a new way.
For more information, visit https://www.ibm.com/thought-leadership/institute-business-value/report/hr-3.
Kathy Caprino is a career and leadership coach, speaker, and author of The Most Powerful You: 7 Bravery-Boosting Paths to Career Bliss. She helps professional women build their best careers through her Career & Leadership Breakthrough programs and resources.