Deloitte Study: When Resilience Can Determine Organizational Survival, Only 16% of Business Leaders Expect to Significantly Increase Investment in the Continual Reinvention of the Workforce Over the Next Three Years
NEW YORK, May 18, 2020 /PRNewswire/ --
Key Takeaways:
- With COVID-19 creating urgency around workforce reinvention, it's clear that while organizations have doubled down on investments in technology over the past decade, many have significantly underinvested in how humans could adapt to and embrace new ways of working.
- Only 17% of respondents are making significant investments in reskilling to support their AI strategy with only 12% using AI primarily to replace workers;
- At a time when workforce shifts are happening at warp speed, only 1 in 10 respondents are producing workforce insights in real time;
- Just 27% of respondents have clear policies and practices to manage the ethical challenges resulting from the future of work despite 85% of respondents saying the future of work raises ethical challenges;
- Three-quarters of leaders are expecting to source new skills and capabilities through reskilling, but only 45% are rewarding workers for the development of new skills; and
- Only 45% of respondents are prepared or very prepared to take advantage of the alternative workforce to access key capabilities despite gig workers being likely to comprise 43% of the U.S. workforce this year according to the Bureau of Labor Statistics.
- The need for a human focus has catapulted well-being and belonging into top concerns for organizations as the No. 1 and 2 trends, respectively, this year.
- Twenty-six percent of respondents are not confident in HR's ability to step-up and lead effectively, providing HR with the opportunity to demonstrate their strength to help organizations navigate the new normal created by the COVID-19 crisis.
Why it matters to business leaders
With the onset of COVID-19, organizations have had to take immediate actions in reaction to the pandemic, such as the shift to remote and virtual work, the implementation of new ways of working and redirecting the workforce on critical activities. Now organizations should be thinking about how to sustain these actions by embedding them into their organizational culture and DNA.
In its 10th annual 2020 Global Human Capital Trends report, "The social enterprise at work: Paradox as a path forward," Deloitte examines ways to create that level of sustainability by finding the intersection between humans and technology and defining the core attributes that need to be embedded in the organization to create and sustain that integration. Having surveyed approximately 55,000 business leaders over 10 years, this is the largest longitudinal study of its kind.
Social enterprise at work and bringing purpose to the forefront
In just a few short years, the concept of the social enterprise has evolved from an intriguing new concept into a concrete business reality. This year's report focuses on how the social enterprise can find the integration between technology and humanity at a time when humanity is in the spotlight as a result of the COVID-19 pandemic. This integration will enable lasting value and provide workers with an increased sense of belonging and well-being. In fact, almost half of this year's respondents categorized their organization's purpose as broadening extensively to include all stakeholders, including the communities they serve and society at large.
Based on our research, the three characteristics that need to be embedded into a social enterprise's DNA to help them prepare for the future are: purpose (deepening the mission and values connection amongst teams, individuals and the work itself), potential (tapping into workers' capability to contribute in new ways) and perspective (making bold decisions at a time of persistent change). Each requires significant shifts in workforce strategies and programs, but offers a clear path that organizations can follow to enable them to recover and thrive.
Worker well-being as an organizational responsibility through belonging
Although historically organizations were only responsible for workers' safety, today nearly all respondents — 96% — say that well-being is an organizational responsibility. Though 80% of respondents identified well-being as an important or very important priority for their organization's success, 61% are not measuring the impact of well-being on organizational performance.
Well-being extends beyond physical health to employees feeling a sense of purpose and belonging. When asked how creating a sense of belonging supports organizational performance, 63% answered that it does so by enhancing alignment between individual and organizational objectives. Twenty-eight percent of respondents said that feeling aligned to the organization's purpose, mission and values, and being valued for their individual contributions, are the most impactful ways to help ensure a sense of belonging.
Finding potential through the convergence of humans and technology
With the rapid integration of artificial intelligence (AI), workers are facing new realities of how they can work together with technology to bring out the best in one another. This year's report found that only 12% of respondents said their organizations are primarily using AI to replace workers, while 60% said their organization was using AI to assist, rather than to replace, workers. Furthermore, 66% of respondents believed that the number of jobs would either stay the same or increase as a result of AI's use in the next three years.
Building off last year's chapter on "superjobs," the concept of "superteams" combines people and machines, leveraging their complementary capabilities to help solve problems, gain insights, and create value — addressing a renewed sense of potential and creating new possibilities for the future.
Beyond reskilling and investing in resilience
With the "half-life" of technical skills decreasing, the use of forward-looking workforce metrics is critical for boards and investors to gain insights into the reskilling of workers. Yet organizations are least likely to collect workforce metrics in several critical areas, including the "status of reskilling," with only 14% of respondents collecting analytics in this area. Organizations recognize that reskilling is important, with 53% of respondents saying between half and all of their workforce will need to change their skills and capabilities in the next three years. Yet, only 16% of business leaders expect to make a significant investment increase in the continual reinvention of the workforce over the next three years. With technical skills becoming outdated so quickly, organizations should be investing in longer lasting capabilities like creativity, collaboration, critical thinking and emotional intelligence that can keep their workforce relevant.
Although organizations are trying a variety of strategies to future proof their workforce, 68% of respondents report their organizations are currently making only moderate investments in reskilling or no investment at all. Thirty-two percent of respondents identified lack of investment as the greatest barrier to workforce development in their organization, with only 17% of respondents expressing confidence "to a great extent" that their organizations can anticipate the skills their organizations will need in three years.
Leaders must initiate and lead the dialogue around tech-related ethical concerns and the alternative workforce
A wide majority (85%) of respondents believe there are ethical concerns related to the future of work, including the maintenance of privacy, control of workers' data, and the treatment of alternative workers. Twenty-seven percent of respondents say their organizations have clear policies and leaders in place to manage ethics in the context of the future of work, though 73% of respondents are either not addressing it, starting to develop their approach, or dealing with it on an ad hoc basis.
Organizations may be failing to recognize the importance of alternative workers, even as this workforce segment rapidly grows. For example, just 21% of organizations say their well-being strategy includes alternative workers. Looking ahead at the next decade, 80% of respondents rated "the radical shift in work, careers, and jobs due to AI and new employment models," as important or very important. However, only 45% said they are prepared or very prepared for this shift — the lowest preparedness score for any of the issues surveyed as emerging challenges in the next 10 years. The ability to effectively tap into the alternative workforce can help organizations access scarce capabilities in rapidly changing work and job markets.
Key quotes
"COVID-19 has created a clarifying moment for work and the workforce. While technology provides a tremendous platform for reinvention, organizations need to realize that reinventing work is about building a culture where humans can thrive by creating meaning in work, as well as developing a new level of resilience and adaptability to handle disruptive events. This extraordinary time is when organizations should identify and invest in workers' capabilities, develop new team structures, and evaluate how to best leverage the alternative workforce. If organizations don't figure out how to capitalize on humans' ability at work, they will not only sub-optimize the potential that technology creates, but hamper the reinvention required to thrive in the context of this pandemic and beyond."
- Erica Volini, principal and global human capital leader, Deloitte Consulting LLP
"Last year, we introduced the idea of superjobs, which combine work and responsibilities from multiple traditional jobs, using technology to augment the scope and impact of the work individuals perform. Expanding on the evolution of the relationship between technology and people, superteams offers an approach for how humans and technology can work 'together' in groups to create more value and stronger workplaces for the future."
- Jeff Schwartz, principal and U.S. future of work leader, Deloitte Consulting LLP
Closing the generational gaps through purpose
Age and career progression can no longer be seen on a linear path in the age of the "perennial." With five distinct generations in the workplace, jobs have become more dynamic and complex than ever before. Leaders are taking notice: more than half of this year's survey respondents (52%) report they consider generational differences to some or to a great extent when designing and delivering workforce programs. However, only 6% of respondents strongly agree their leaders are equipped to lead a multi-generational workforce effectively.
This year's report revealed that respondents believe some generational gaps will become less pronounced in the next three years (views on work/life flexibility, expectations of loyalty/job security, and expectations of advancement), while others will become more pronounced (degree of technology-savvy, agility to shift roles, expectations of social impact).
To see additional results from Deloitte's "2020 Global Human Capital Trends" report, download a copy.
Methodology
Since 2010, Human Capital Trends tracks the thinking and actions of leading organizations, representing some of North America's largest and most influential organizations. Completed by nearly 9,000 respondents in 119 countries, Deloitte's 10th annual Global Human Capital Trends report is the largest longitudinal survey of its kind and marks a decade of investigating and understanding how humans can continue to find meaning in work.
About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people work across the industry sectors that drive and shape today's marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthy society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Now celebrating 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's more than 312,000 people worldwide make an impact that matters at www.deloitte.com.
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SOURCE Deloitte
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