Corporate responsibility meets citizenship: A new role for HRApril 18, 2019
Day 2 of IMPACT 2019 kicked off with a call to action for HR leaders: Lead the charge for corporate citizenship as both an antidote to the often unsettling realities of the modern workplace and a vehicle for restoring trust.
The challenges facing organizations and their workforces—work in the age of machines, the war for skills, and the employee experience gap—are daunting, noted Josh Bersin, Deloitte advisor. But this is not a time for despair. Organizations have an opportunity and even a mandate to address these transformational changes with a renewed focus on trust and citizenship.
The new economy: Work in the age of machines
The robots have arrived, and they’re moving fast. But rather than replacing human workers, the rise of robots is creating demand for new skills that are more human-centric. And the challenge to find these skills is growing accordingly. Attracting and retaining talent is now a top internal issue for CEOs.1
Despite the influx of technology, productivity is slowing.2 One of the main reasons for this is a labor shortage driven in part by shrinking populations and lower birth rates across all major economies. Growth will increasingly depend on the quality of labor, too—engagement, productivity, and learning will be the growth drivers for the future.
Retaining and retraining tenured workers can help organizations meet their labor and skills needs, as can figuring out how to manage the alternative workforce—which isn’t actually alternative anymore. More than 34 percent of the workforce is alternative / gig, and 42 percent of people under the age of 34 are freelancers.3
The new war for skills: Impacting every worker
Employees are feeling the pressure of the transforming economy, often with rising anxiety about not having the skills they need to get a job that pays well.4 This may be one of the reasons that learning in the flow of life is the number-one trend in Deloitte’s 2019 Global Human Capital Trends report. Continuous, lifelong development is now part of the core value proposition of work.
Employers increasingly understand and feel this anxiety over skills. And it’s soft skills, not hard skills, that are in greatest demand. Wages are rising fastest for jobs that require both social and math skills5 —and the fact that many workers do not have both skills sets is contributing to the growth in income inequality. Over the last 30 years in the US, growth in the incomes of the bottom 50 percent has been zero, whereas incomes in top 1 percent have grown 300 percent.6 And the distance between wage classes continues to grow. In the last 50 years, the earnings gap between high school and college degrees has grown from 22 percent to a 61 percent difference.7 The new world of hybrid, technology-driven, multi-functional roles risks leaving a lot of people behind.
Bridging the gap: Can we fix the employee experience?
Even employees who have jobs that pay well are not immune from anxiety. Employees today suffer from a severe time famine, as work becomes more complex and the technology that is intended to simplify work instead drains more time. It’s such an acute problem that people report they would rather make less money in order to have more time.8 Simplifying the many time-consuming processes that are required on a regular basis could save millions of hours, help restore time to workers, and increase productivity.
Employee wellbeing is also suffering—particularly the opportunity to take time off and regenerate. Since 2000, US workers lost an entire week of vacation, with the average number of vacation days dropping from 20.3 to 16.9 And there is apparently little upside: while 39 percent of workers “want to be seen as a work martyr” to their boss, these overworkers are typically lesslikely to receive a promotion or raise than their peers.10
And while the market for corporate wellbeing products and services is exploding—offering everything from incentive programs to financial management skills—HR leaders need to figure out how to create a wellbeing experience from the current smorgasbord of offerings that people don’t know what to do with.
Finally, the arrival of the networked model is changing how things work, enabling organizations to move from a traditional hierarchical approach to a system of shared values and culture, transparent goals and projects, the free flow of information and feedback, and rewards for skills and abilities—not position. And let’s not forget being agile, the new and seemingly pervasive trend. Agile organization models can be highly effective when treated as a mindset, rather than a bunch of tasks. But cultural change and investment are required to make these models work. According to Deloitte’s Global Human Capital Trends report, only 7 percent of respondents feel very ready to execute the shift to team-centric and network-based organization models, and only 6 percent rated themselves very effective at managing cross-functional teams. HR needs to be part of the effort to make agile, team-based models more common and more effective.
The importance of trust and citizenship
Against this backdrop of challenges, trust and citizenship are the new “secrets to success.” Despite a reported declining trust in government, most people still trust their employers. This is a sacrosanct opportunity for organizations, and a new approach to citizenship is key to making the most of it. For organizations to lead in the era of the social enterprise, they must move from individual thinking to collectivist thinking, and from a scarcity mindset to a growth mindset. Research shows the need for social cohesion, relationships, and trust.11 Citizenship can help fulfill it both within and outside our organizations.
But where and how should you begin or advance your corporate citizenship aspirations? Bersin offered HR leaders five fundamental lessons to consider.
- Lesson 1: Develop people everywhere.
Organizations can and must reskill—not replace—their workers. It’s good for employees, their families, and society as a whole. It can be less expensive and highly effective at placing the right people in the right jobs—a monumental challenge for most organizations.12
- Lesson 2: Unleash teams and careers.
Individuals can thrive when their career path lines up with organizations’ needs, society’s needs, and their needs and desires. Organizations can help unleash their employees by identifying their target business outcomes, desired competencies (knowledge, behavior, skills), and open positions and opportunities. And it includes allowing their people to define, explain, and express what they want to do. Organizations must embrace this process and the resulting radical change it poses to the status quo—an environment in which workers have more control over their own destiny, growth comes from experience, and development is for all. Why is unleashing teams and careers so important? —launched at IMPACT 2019—reveals that 57 percent of survey respondents believe it’s easier to find a job outside the company than it is inside. That’s an alarming statistic. We need to fix it.
- Lesson 3: Co-create the employee experience.
Organizations need to leave behind the old way of designing and executing experiences from the top down and instead create experiences that are designed at the source. What does that mean? They should design the experience in conjunction with employees, prototype quickly, work in multifunctional teams, and focus on joy. This also means organizations have to go beyond surveys to really get to know what employees are doing on the job day in and day out in order to understand what they do and what hinders them from doing it better and enjoying it more.
- Lesson 4: Adopt a citizenship philosophy in leadership.
Leadership teams—and that includes HR leaders—have to decide what kind of organization they want to be. Are you an “up or out” or an “everyone can succeed” company? Identifying your current type of organization is the first step in enabling a path forward toward the trusted enterprise—one in which citizenship, trust, growth, and learning can thrive and productivity, wellness, and responsibility are top of mind. HR leaders need to lead the way in adopting a leadership model that will not only set the tone for individuals, teams, and the organization as a whole, but can also as leadership shifts toward a true citizenship philosophy.
- Lesson 5: Reward with respect and trust.
It is imperative that organizations find a way to pay people fairly. Workers are an asset, not an expense, and organizations have to start treating them this way. Research by Zeynep Ton, which analyzed two years of data from 500 stores, showed that an increase of $1 in payroll can increase sales by $4 to $28 and can enable profits exceeding expense by 40 percent.13 If you advance pay, rewards, and the like, you are investing your most important assets. There to help you benchmark and identify compensation gaps. This is sitting in your organization’s lap to fix.
At a time when HR leaders are being asked to take on so much—performance management, HR tech, new operating models, and more—placing citizenship at the top of that list is an imperative. In today’s environment—when high-trust companies outperform their sector by an average of 5 percent14 —it’s clear that trust pays off. Build it by being a good corporate citizen.
Stay tuned for more Insights from IMPACT 2019 all week, and follow the conference conversations on our Twitter handle: @Bersin.
1 “C-Suite Challenge 2019™: The Future-Ready Organization,” The Conference Board, January 17, 2019, https://www.conference-board.org/c-suite-challenge/
2 “Labor Productivity and Costs: Productivity change in the nonfarm business sector, 1947–2018,” U.S. Bureau of Labor Statistics, Updated March 8, 2019, https://www.bls.gov/lpc/prodybar.htm.
3Freelancing in America 2018,Upwork / Freelancers Union, 2018, https://www.upwork.com/i/freelancing-in-america/2018/
4 2019 Edemlan Trust Barometer: Global Report,Edelman, 2019, https://www.edelman.com/sites/g/files/aatuss191/files/2019-03/2019_Edelman_Trust_Barometer_Global_Report.pdf?utm_source=website&utm_medium=global_report&utm_campaign=downloads.
5 “The State of American Jobs: 1. Changes in the American workplace,” Pew Research Center, October 6, 2016, https://www.pewsocialtrends.org/2016/10/06/1-changes-in-the-american-workplace/.
6 “Economic growth in the United States: A tale of two countries,” Washington Center for Equitable Growth / Emmanual Saez, Thomas Piketty, and Gabriel Zucman, December 6, 2016, https://equitablegrowth.org/economic-growth-in-the-united-states-a-tale-of-two-countries/.
7 “No college, no problem?” Deloitte Insights / Patricia Buckley, Daniel Bachman, and Tiffany Schleeter, November 30, 2017, https://www2.deloitte.com/insights/us/en/economy/issues-by-the-numbers/college-premium-skills-versus-degrees.html
8 “To Promote Happiness, Choose Time Over Money,” Behavioral Scientist/ Ashley Williams and Elizabeth Dunn, November 14, 2017, https://behavioralscientist.org/promote-happiness-choose-time-money/.
9 The State of American Vacation 2018, Project: Time Off, 2018, https://www.projecttimeoff.com/state-american-vacation-2018
11 World Happiness Report 2018, Sustainable Development Solutions Network / John F. Heliwell, Richard Layard, and Jeffrey D. Sacks, 2018, https://s3.amazonaws.com/happiness-report/2018/WHR_web.pdf.
12 For instance, one large financial institution found it was six times less expensive to reskill its software developers internally than hire externally. It also revealed that 96 percent of all transitions have “good-fit” options and 65 percent of transitions will likely increase wages. It’s a win-win strategy for organizations and their workers.
13 The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, Zeynep Ton / New Harvest, January 2014.
14 2019 Edemlan Trust Barometer: Global Report,Edelman, 2019, https://www.edelman.com/sites/g/files/aatuss191/files/2019-03/2019_Edelman_Trust_Barometer_Global_Report.pdf?utm_source=website&utm_medium=global_report&utm_campaign=downloads.
Originally published at Capital H blog