At our ReimagineHR summit in London on Thursday, CEB (now Gartner) Principal Executive Advisor Clare Moncrieff led a session on creating a common vision of digitalization for the business and HR. After examining hundreds of trends, our research councils serving chief HR officers and chief information officers have identified six deep shifts in the business environment that will result from digitalization. These shifts should act as the framework for heads of HR to:
- Ensure talent conversations with the line are grounded in business context
- Identify the current talent implications of these shifts, project future implications, and partner with the line and C-suite peers to prioritize and respond to each
- Improve their teams’ business acumen (to underscore the importance of this, 58 percent of HR business partners indicated in one of our surveys that building business acumen was their top development goal in 2017)
(The case studies we link to below are available exclusively to CEB Corporate Leadership Council members)
1) Demand Grows More Personal
As customers seek personalized products that align with their preferences and values as individuals (rather than as segments), companies will rely on digital channels and digital innovations in logistics and customer service to achieve personalization at scale. Customers will continue to expect lower-effort, nonintrusive service.
This could, for example, affect how HR functions look for new talent. Attraction of critical talent now requires differentiated, customized branding and career coaching. Candidates will demand a more effortless, personalized application experience. AT&T approached this shift by creating a more personalized “Experience Weekend” to show the innovation of its brand to campus candidates and make top talent more likely to accept job offers.
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The US is a big country with many local labor markets, some more robust than others. With millions of job vacancies and local unemployment in metropolitan areas varying from 2 percent to 20, economists would expect workers to move where the jobs are, but overall, they aren’t. Daniel Gross at Strategy+Business considers why not:
“The percentage of Americans moving over a one-year period fell to an all-time low in the United States to 11.2 percent in 2016,” the Census Bureau reported in November. That percentage has been steadily declining over the past three decades.
Some of the reasons for inertia are obvious. People are often reluctant to leave their homes, familiar surroundings, friends and families, and the places where they have made investments, even if they realize economic opportunities may be greater elsewhere. Struggling housing markets and underwater mortgages may make it impossible for many people to move. And from companies’ perspective, labor forces and physical locations aren’t simply interchangeable, even in an age where there’s a Starbucks on every corner and people can work remotely. There aren’t enough engineers in El Centro for Silicon Valley companies to hire, and there aren’t enough houses in Fargo for potential job-seekers to move into. And as agile and nimble as companies can be, like people, they feel the need to be part of the ecosystem in which they grew up and had been thriving. If you want to be a player in film, you have to be in Los Angeles. Serious financial firms must have a presence in New York. For those in the technology game, San Francisco and Silicon Valley exert a magnetic attraction.
Last year, a Federal Reserve working paper postulated a correlation between declining labor market fluidity and declining social trust, observing that labor mobility fell as people reported trusting strangers less. In the meantime, as potential employees stay put, companies are making major geographic relocations of their own to seek them out where they already are, in many cases moving from suburban corporate campuses to central city locations.
Startup Stock Photos
These days, whenever a large, legacy organization wants to overhaul its culture, they start talking a lot about being more like a startup, using words like agile, nimble, scrappy, and lean. Samsung, for example, launched a cultural transformation initiative earlier this year with the goals of “execut[ing] as quickly as a startup company,” opening up communication, and encouraging continuous innovation. A similar focus on emulating startup culture can also be detected in General Motors’ ongoing change effort and Walmart’s decision to shake up its e-commerce business by acquiring the startup Jet.com and hiring its CEO Marc Lore to run its entire online operation.
But is startup culture all it’s cracked up to be? Talent Economy editor Frank Kalman insists that it’s not:
Firstly, the image that most people see when they think startup culture probably isn’t entirely accurate. Yes, many startups have flexible work environments, where employees are able to maintain loose in-office hours so long as they meet their performance goals and objectives. And, yes, many offer lavish and untraditional employee perks, like free food, beer on tap, nap rooms, social events and casual dress codes. Other attractive elements abound.
But, in many startups lies a subculture that isn’t quite as attractive.
As organizations grow, they often find that their ability to respond to challenges quickly and decisively is diminished; size and structure, by their very nature, have a tendency to slow things down. At the Harvard Business Review, Greg Satell admiringly profiles Experian’s DataLabs unit, a dedicated problem-solving team aimed at overcoming this downside of scale and giving the major multinational corporation the ability to think and act more like a startup:
Part skunkworks, part research lab, Experian DataLabs keeps a running list of the data problems customers want them to solve. As Eric Haller, Global Head at Experian DataLabs, told me, “We regularly sit down with our clients and try to figure out what’s causing them agita, because we know that solving problems is what opens up enormous business opportunities for us.”
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The World Economic Forum’s annual gathering of economic leaders, tycoons, and celebrities finished up last Saturday in Davos, Switzerland, and the meeting was not short on big ideas about how the world of talent is going to shape up in the near future.
The centerpiece of the discussion was what people are calling the Fourth Industrial Revolution (although there’s some debate about whether we are still in the third). The WEF put out a long report with a lot of statistics to help you understand the shift and to scare the world into action—especially with the much-reported statistic that robots are going to steal about 5.1 million jobs by 2020. (You can read the executive summary here—though apparently you must still download PDFs in the Fourth Industrial Revolution.)
The revolution, it is argued, ushers in a blurring of the physical and the digital and, importantly, does so at incredible speed and disruption to business. For Fortune editor Alan Murray, the human element of this change was one of the key takeaways from Davos:
Digital transformation is as much about people as technology. I moderated two private CEO-level discussions focused on the digital transformation of industries, and in both, the human challenges trumped technological ones. Companies struggle to create cultures that can embrace rapid technological change, and governments struggle in response to publics more likely to focus on future risks than future benefits.
CEB data certainly bears this out. For the last year, we’ve been tracking the impact of change at organizations as companies have looked to transform both their HR functions and their workforces to better handle the onslaught of change largely generated by the digital revolution. And as the WEF meeting made clear, change in this new era is very different than in the past.