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Digital Disruption in the New Human Age

Examples abound as to how digital disruption is the present and future of work. The revolution is touching everyday life and traditional industries alike: virtual assistants can now call restaurants and salons to book appointments and navigate complex conversations, while musicians use AI to comb existing tracks and compose a basic score before adding their own original flourishes. Despite the wonder of it all, concerns about job disruption have become all too familiar and the impact on us — on our sense of self, our take-home pay and future careers — all too real.

As always, it’s more complicated than the attentiongrabbing headlines. Yes, organizations must embrace digital transformation to succeed in the global economy, but at the same time their challenge is to engage and empower people to thrive in an age of disruption. Organizations are rethinking their business models, redesigning work to harness the power of technology and adjusting their operating models to a fast-changing world. Yet for all the concern about technological disruption, it’s clear they can’t succeed without making people a priority.

In the HR world, the potential for digital solutions to contribute to people’s performance is increasingly evident. Portable performance management systems, enabled by the hyper-secure networking of blockchain technology, can be leveraged from job to job (or gig to gig). Data and algorithms are nudging managers toward better, more analytically sound talent decisions and helping to enhance managers’ interactions with team members. Meanwhile, the evolution of massive open online courses (MOOCs) for employee training and reskilling is opening doors to employee development and employment in ways that weren’t so clearly part of the conversation five years ago.

People are the heart of every organization, but it should be just as evident that people are at the heart of technology. With AI infused into today’s and tomorrow’s work, enterprises need highly — and newly — skilled people to maximize the benefits of digitization. People, not robots or AI software, will continue to brainstorm new ideas, pursue opportunity, inspire each other and drive organizations to succeed. If anything, we’ve entered a new Human Age and one where we have to think differently about how we build the skills of the future.

That’s a key takeaway from Mercer’s “2018 Global Talent Trends” study, which gathered insights from more than 7,600 senior business executives, HR leaders, and employees from around the world. The consensus reveals that global leaders and employees understand that to thrive, organizations need workforces of lifelong learners who grow with the business, embrace continuous change, master new technologies, and build skills for the future that enable them to work with technology and an array of talent partners.

So what do employees need and want if they are to stay the course? Flexibility in how, when and where they work. Careers that conform to personal lives, not the other way around. A sense of well-being and purpose. And, as they support technology, they want technology to support them back — through state-of-the-art platforms that enable people to connect, collaborate and innovate together.

While integrating new technologies, leadership must focus on the “human operating system” that powers the organization. The Mercer study specifically identified five workforce trends for 2018 and beyond.

Change@Speed

How companies prepare for the future of work depends on the degree of disruption anticipated. Those expecting the most disruption are working agility into their model and placing bets on flatter, more networked structures (32% are forming more holacratic work teams — based on decentralized authority rather than a management hierarchy — compared to 22% last year). More than half (53%) of executives predict at least one in five roles in their organization will cease to exist by 2022, so it is no surprise that being prepared for job displacement and reskilling is viewed as critical for survival. The number one reskilling being embarked upon this year is building innovation skills, followed by developing digital competence and a global mindset.

In practice, Change@Speed calls for agile organizational design, and 96% of C-suite respondents to the survey said they are planning a shake-up, citing new work models such as self-driven teams to make firms more “change agile.” Greater efficiency and increased automation are the prime drivers of these changes, while innovation is a greater driver for change in Asia than in other parts of the world.

Flexibility is especially important for workers in the financial services and health-care sectors. And of those who say they are thriving at work, 71% report that their organizations offer flexible work options (up from 49% in 2017). Flexible working also is part of the strategy for many in addressing the widening skills gap by enabling access to a broader talent pool. Mercer’s When Women Thrive research showed that organizations that make flexibility a core tenet have better representation of women.

Platform for Talent

Given that 89% of executives expect an increase in the competition for talent, organizations realize they must expand their talent ecosystem and update their HR models for a digital age. The time is now — two in five companies are already planning to “borrow” more talent in 2018 and 78% of employees are considering working on a freelance basis. This has the potential to deliver a far more fluid talent model than they have had before — one that can move jobs to talent and talent to jobs with precision.

In the platform model, the organization is no longer a hierarchy of employees. Instead, it’s a smart platform that matches skill supply with work demand. Data, especially work feedback, plays a vital role in making this work. Automated feedback mechanisms such as Zugata and work management platforms like WorkMarket — which help businesses source, vet and manage independent workers — are part of a growing suite of applications that makes this vision possible. And they are finding creative ways to empower managers to scale up and down.

Gaining greater access to talent through a broader ecosystem is of course vital in changing times. Companies also need to deploy talent faster and with precision to unlock the potential of their workforce. Many executives report that improving the ability to move jobs to people and people to jobs is the talent investment that would have the most impact on business performance this year. In practice, today’s talent platforms require better information on talent supply (by understanding the talent within the company’s ecosystem, and the gaps and blockages in talent pipelines and better insight into upcoming demand (where will value be created in the future and where will it be hard to source). AI and Automation can help to streamline the process by predicting needed skills and monitoring individual output, but we are still in our infancy — just 43% of the global workforce surveyed proclaims to have a digital interaction with HR. This will change and when it does, it will free HR to focus on talent strategy, matching execution and other enabling technologies.

AS WE EMBRACE THE ERA OF THE INDIVIDUAL, SYSTEMS THAT SUPPORT INDIVIDUALS NOT MANAGERS OR HR MIGHT NEED TO TAKE PRECEDENCE.

Digital from the Inside Out

Despite improvement over last year, companies lag on delivering employees a consumer-grade digital experience — only 15% consider themselves a digital organization today. And while 65% of employees say that state-of-the-art tools are important for their career success, less than half (48%) say they have the digital tools today necessary to do their job effectively.

The good news is that most companies this year are investing in technology to support key HR processes with talent acquisition, performance management and rewards being the top areas to upgrade. What is of concern is that digital tools that specifically enhance the employee experience often come later in the buying cycle, typically sitting atop HCMplatforms. As we embrace the era of the individual, systems that support individuals — not managers or HR — might need to take precedence.

The Mercer Talent Trends study found that implementing an HCM/HRIS system (like Workday or SAP) has a significant impact on being digital from the inside out. In the eyes of employees, it is made-to-order technologies (such as career or HR portals and collaboration technology) that may provide the best return on a company’s digital investments. And as we move toward the management of multiple systems to support employees, the user experience becomes even more critical. This has been a huge area of growth this year with companies like ServiceNow, offering chatbots and process management tools to answer employees’ routine requests, alleviating frustrations by streamlining and speeding up HR processes.

Significantly, one-third of employees report that their roles or responsibilities have already changed due to digital technology, and this proportion will likely double in the next few years. The challenge is to keep the human touch as we embrace a tech-enabled future. Technologies that are getting the most positive press are those that help companies engage with their full talent ecosystems and in ways that support their health, wealth and careers needs.

To thrive in the new Human Age, organizations must be agile and vigilant — pivoting at the pace of market fluctuations, leveraging the best technologies and nimbly reforming to take advantage of new opportunities as they emerge. But great strategy and organizational agility is not enough. To sustain growth, companies must bring their people along on the journey. Building the workforce for the future needs leaders with a vision for what that future will be and a workforce inspired by its promise.

Kate Bravery Kate Bravery is a partner and the global practices leader for Mercer’s career business. She is based in Hong Kong and can be reached at kate.bravery@mercer.com. Connect with her on LinkedIn.

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