Two years ago, our fifth edition of Global Trends in Human Capital told the story of a downturn with a very noticeable human capital impact – those that had survived some harsh workforce cuts were left disengaged, with the youngest generation of workers suffering the most.
Today, the story is very different. The regions hit hardest are accelerating out of recession and organisations are focused again on growth. But the recovery has brought with it some familiar problems – low employee engagement, wage inflation in some markets and most importantly, skills shortages.
Many business leaders will say they’ve walked this road before – that the race to recruit as the recovery takes hold is what organisations need to do. But this recovery is unlike any other. The rules have changed. That means that you need to think again about what you think you know – about the behaviour of organisations during a recovery, about the nature of emerging markets, about workforce management and the role played by diversity and trust, even about the impact of HR itself. The world has changed and continues to change – and that means that the same arguments and approaches no longer apply.
Five global trends have emerged:
As developed countries emerge from recession, organisations are following a habitual pattern – when growth returns they rush to recruit. PwC’s Saratoga data confirms that external recruitment rates are already rising sharply and competition for talent is increasing.
We could all sit back and watch another talent war unfold, or we could choose another path – smart growth. This means a taking a more strategic approach to recruitment, while maximising productivity among existing staff. Do more with the same, then more with more to maximise the return on investment in human capital.
The temptation for years has been for multinational organisations to think about emerging markets as a single group to which a collective workforce strategy can be applied. The reality, though, is that not all emerging markets have the same workforce concerns.
Demographic forces, and the need to find new ways of competing as the wage gap between developed and emerging markets narrows, are creating contrasting priorities. A workforce strategy that works in Asia won’t necessarily work in Africa. Knowledge, in the form of analytics, will be power.
Demographic changes mean that workforce diversity will become a necessity rather than an objective over the next few decades. It’s widely accepted that diversity brings value – but there’s a vast difference between being a diverse organisation and making diversity work.
The real value of diversity goes far beyond accessing greater talent supply; it comes from harnessing a wider range of perspectives. That means thinking beyond gender, age and ethnic origin and opening the corporate mind to new ideas.
CEOs agree that trust, between employer and employee, is critical in building workforce value; rebuilding trust has been a priority in recent years. The real value in trust comes when it encourages greater innovation, where ideas can be tested without fear of failure.
What we understand as ‘trust’, though, is changing. Portfolio careers, far greater flexibility at work and our new-found ability to access everything we need to know (and everything that others know) about organisations through social media has changed its very nature. Today, you can’t build trust without transparency.
HR professionals are adapting to the new world of work as strategic workforce planning becomes a critical differentiator. HR models are beginning to evolve, placing far more emphasis on technology to improve networks and data and focusing on HR as a consulting function.