Organizations all over the world are in the midst of a talent war and it is only set to intensify. HR expects a dearth of quality talent due to workplace disruption in the next two years. These and many other findings can be found in the Mercer Talent Trends 2017 Global Study: “Empowerment in a disrupted world”, which provides three unique perspectives into the future of work and makes for an insightful reading. The study is a culmination of responses and acumen of over 400 business executives, 1700 HR professionals and 5400 employees from 37 countries spread across 20 industries. The respondents were quizzed on diverse topics like industry disrupters, HR perspective on job change, in-demand skills, desirable workplaces and future plans. The result is a list of trends to look out for in 2017, advice on how to stay agile and an attempt to comprehend what all these things mean for HR.

It notes that while the gap between supply and demand (of talent) affects all industries, geographies and functions, it is predicted to be especially acute in leadership, core operations, sales and marketing, and IT. Furthermore, it states that in areas with oversupply, competition for jobs will increase and there is potential for job displacement. However, it also mentions that for organizations that are able to move people to jobs, or jobs to people, this can be a great world-sourcing opportunity. While customer services and IT is expected to be in oversupply in India, in the USA, it will be core operations, and in Italy, Marketing and Logistics.

Trends to look out for in 2017

In 2017, the top HR priorities are attracting top talent externally, developing leaders for succession, identifying high potential, building skills across the workforce, supporting career growth and increasing employee engagement, in that order. This is in contrast to the C-Suite concerns, which are technology at work, talent drain, aging workforce, and Generation Z. The heightened concern about technology seems to be well founded, as according to the study, less than 10 percent of the organizations consider themselves to be a digital organization today, and 1 in 5 say that their employees do not have a digital experience when interacting with HR. Furthermore, massive changes in the fundamental design of organizations seem to be inevitable, as 93 percent business executives plan to make a design change in the company within the next 2 years; and this is consistent across all geographies and industries. These changes include — moving support functions to shared services, flattening the organizational structure, eliminating roles/departments, decentralizing authority, building networked communities among others. 

Additionally, the study emphasizes the need of changing the way we look at rewards and re-evaluating what we value at work today. An overwhelming 97 percent of employees said that they want to be recognized and rewarded for a wide range of contributions at work. This urgency seems to have been identified by organizations, as 50 percent of HR leaders said that they will change their job evaluation methodology this year, 83 percent of the companies are planning to make changes to increase transparency of executive pay, 88 percent made changes to their performance management approach last year, 61 percent eliminated performance rating last year or are planning to do so this year and 75 percent replaced numerical ratings with descriptions or are planning to do so. Globally, employee priorities are as follows — fair and competitive compensation, opportunity to get promoted, leaders who set clear direction, working with the best and brightest, transparency on pay calculations, career path information, more flexible work options. In India however, the opportunity to get promoted and getting more feedback on their performance trumps others. 

Next, the case for personalized employee experience was strongly presented in the study. It says that people expect their employer to ‘make work, work’. 40 percent of HR respondents acknowledge that offering more flexible ways to work would improve their employees’ ability to thrive. 62 percent already have pockets of flexibility, but only 35 percent say it is a core part of their value proposition. Considering this view, it is expected that support from manager (61 percent) and colleagues (64 percent) in experiences with flexible working is prevalent. However, 1 in 3 say a request has been turned down in the past, and 1 in 2 say that working part-time or remotely would negatively impact their promotion opportunities. The study also advises organizations to take care of the three biggest employee concerns: health (61 percent), wealth (23 percent) and career (16 percent).

Only 1 in 4 organizations is able to produce basic descriptive reporting & historical trend analysis

Finally, the study highlights the significance of predictive analytics, and also how its effective utilization remains elusive. It says that only 1 in 4 organizations is able to produce basic descriptive reporting and historical trend analysis, while the industries which are ahead of the curve are life sciences and logistic companies. The study says, “Mismatch in talent analytics, as most valuable analytics as viewed by executives, were not the ones used by HR. For example: executives say understanding key drivers of engagement would bring most value to their business, but only 35 percent of HR leaders provide this information.”

How to stay ahead

Sections in this part of the report enlist several practical, important and realistic set of ‘Ask Yourself’ questions, which can serve as efficient litmus tests for organizations that are striving to build tomorrow’s future today. To attract and retain tomorrow’s talent, going all out seems to be the only way. This is essential as half of all employees rated their application and hiring process as average or below average. Similarly, the study confirms that HR is being asked to leverage tools and techniques once reserved for the marketing function to build and sustain a strong employer brand. “A strong digital presence is now becoming a corporate imperative, especially when trying to reach the elusive ‘great-fit’ passive candidate pool... If the Employee Value Proposition (EVP) is not authentic to the company’s DNA, then this passion of attraction will not be translated into a passion for the job.” What’s interesting is though how different stakeholders consider different aspects of the EVP unique and compelling: executives say culture (50 percent), HR says rewards (38 percent) and employees too say rewards (33 percent). More so, while 61 percent of the HR believes that their company has a compelling and differentiated EVP, 57 percent of the C-suite executives think the same, and only 42 percent of their employees hold a similar opinion. 

Executives say that understanding key drivers of engagement would bring most value to their business, but only 35 percent of HR leaders provide this information

The study mentions that preparing for the future will not be an easy task as “virtually everything – skills, culture and work modes will not be relevant three years from now.” What might make this simpler is the fact that identification of who will lead this transition seems to be in place as 3 in 4 organizations globally say that they have a clear method for identifying high potential. However, C-suite executives are least confident about their organization’s ability to re-skill displaced workers (12 percent) and most confident about filling newly vacant positions with external talent (43 percent). “There is an inherent tension between the C-suite’s desire to flatten structures and employees’ appetite for promotion... Both HR and employees named design thinking and innovation, as well as a global mindset, as the top in-demand skills for the year ahead. By creating a culture that fosters the traits of tenacity and resilience, organizations can build agility and tolerance for an ambiguous future.” Innovation seems to come from myriad sources: encouragement for all employees to submit innovative ideas (47 percent), innovation teams, hubs, labs with dedicated resources (40 percent), specific funding for innovation (35 percent), innovation skill training (26 percent), innovation toolkit/proves (22 percent). While 86 percent of the organizations say that innovation is a core part of their agenda for this year, only 42 percent of the employees say that their company makes it easy to innovate. 

Employees who are healthy and energized, can grow and contribute, and feel a sense of belonging, are critical for a thriving workforce, the study says. This is of paramount importance as employees who describe themselves as energized at work view their work environment quite differently from those with lower reported energy levels. While 41 percent of companies are focusing on physical well-being of employees, fewer have policies for psychological (37 percent) and financial (35 percent) well-being. Raising a red flag, the study notes that diversity and inclusion falls well beneath HR’s top five priorities for the year. “With 96 percent of companies having some form of D&I initiative in place, only 14 percent of executives indicated that D&I investment would make a sizable difference to their company’s performance. Fewer than 1 in 3 HR professionals say that their D&I strategy is aligned to their company’s business goals.” On being asked where employees feel the greatest sense of belonging, the responses were varied: company, department, manager or co-worker (52 percent), industry, profession or function (42 percent) and client (6 percent).

Implications for HR

The study observes that a pointed focus on the talent agenda is an opportunity for HR leaders to align their business priorities and maximize their impact. The starting point for the same is said to be “saying ‘yes’ to flexible ways of working, listening and trusting in your people, and being inspired by rule breakers from other industries or geographies. Recognize that disruption isn’t something that happens to you, it’s an opportunity to break away from the crowd. Top organizations shape the future through a culture of innovation, contribution and inclusiveness.”

The study is an informative handbook for anybody who will be working, or designing how others work, a few years from now. With its tips and suggestions, the study can help organizations and individuals in being better prepared for the inevitable changes. The report rightly states that, “Ensuring that People agenda is not lost amid the drive for change will be critical to sustainable growth.” Finally, it is on point when it mentions that, “Without talent insights from HR, CEO’s dreams and aspirations will struggle to leave the boardroom.”