Solo or Symphony?April 23, 2019
Do your C-suite leaders have the same view of your workforce?
Orchestrating the symphonic C-suite
Every member of the C-suite makes investments in the workforce, which itself is critical to the organization’s performance, brand, and reputation. But too often, executives make these decisions on their own. In fact, 73 percent of the leaders we surveyed told us their C-suite leaders rarely, if ever, work together on projects or strategic initiatives.1 They look at multiple data sources in isolation, which leads to overlapping, duplicated, and overall potentially inefficient efforts. When this approach is taken, and decisions are made in silos, it can be impossible to make strategic choices that drive maximum value throughout the organization. Decisions based on incomplete data are often focused on cost reduction, rather than the value and organizational performance that could be derived from the investment.
Source: Deloitte Consulting LLP
Instead, senior executives should be looking at critical workforce decisions in concert with one another, viewing them as strategic investment choices that drive value throughout the organization, just as they would other balance sheet decisions. The Human Capital Balance Sheet orchestrates the symphonic C-suite, where executives work from a single and complete set of data to understand the baseline human capital (all-in labor) cost of their organization, make key workforce investment decisions together, and monitor and measure the impacts of those decisions.
Source: Deloitte Consulting LLP
Through this harmonization, companies can begin to differentiate themselves with the way work gets done through effective investments in their people.
An example: Rewards Optimization
The Human Capital Balance Sheet can be described as a single, transparent view of the workforce from the lens of cost, value, and risk. It analyzes these factors to understand how investment drives organizational performance. This helps executives align on people priorities and make well-informed decisions about where to increase or maintain investment, or where to eliminate or cut back, in order to deliver the greatest return by optimizing the organization’s human capital investments.
One example of this approach in practice is Rewards Optimization. Too often, the types and variety of rewards offered by an organization, from the typical pay/insurance/retirement offerings to more novel offerings, have been based on industry benchmarks or even whatever perk might be in fashion. But as the workforce continues to become more diverse—older, younger, and made up of a variety of worker types beyond full-time employees—so have its needs and preferences. The type of reward one segment of the workforce values may not be the same as another’s, and some rewards may not be particularly valued by any segment, making them a poor investment.
This is where Rewards Optimization provides clarity and actionable insights into the relationship between the value employees place on a particular rewards program feature and the program’s overall value-cost ratio. By taking a conjoint survey, employees indicate which program features are most important or most valuable to them and which are least important or least valuable to them.
With this framework, organizations can:
- Better understand employee preferences using actionable data
- Make fact-based decisions regarding employee benefits, engagement, and loyalty
- Structure and customize their compensation, benefits, and rewards programs to satisfy employee preferences while managing costs
- Invest in the right rewards programs not only to motivate their current workforce, but also to help plan for the needs of the future workforce
Based on Deloitte’s experience, Rewards Optimization data analysis can yield reward packages that the vast majority of employees (frequently 70–80 percent) prefer over their current packages.
From solo performers to symphonic team
In today’s disconnected environment, it’s nearly impossible for the C-suite to know if they are making winning workforce decisions and driving investment dollars to the programs and parts of the workforce that will deliver the greatest return on investment and create the required value for the organization. The Human Capital Balance Sheet can help to change this fragmented view. Leaders can gain the insight to make well-informed decisions beyond the often limited vantage point of their own functional silos.
Even more, the Human Capital Balance Sheet can help leaders see the value that comes from acting symphonically. More than half (54 percent) of survey respondents told us their companies are not ready, or only somewhat ready, for the level of executive-team collaboration they believe is now required.2 Capitalizing on the labor-cost-to-value insight provided by the Human Capital Balance Sheet could be the spark that not only fuels symphonic readiness but also turns it into well-orchestrated reality.
1 Dimple Agarwal, Josh Bersin, Gaurav Lahiri, Jeff Schwartz, Erica Volini, “The symphonic C-suite: Teams leading teams,” The rise of the social enterprise: 2018 Deloitte Global Human Capital Trends.
Originally published at Capital H blog