By now, we’re all familiar with the 2020 challenge. Vast amounts of corporate knowledge are held in the heads of numerous employees on the verge of retirement; there are not enough of the next generation to replace them all; and the up and coming Millennial generation, who will dominate the workforce by 2020, are all digital natives (unlike the rest of us digital migrants), and have a different set of expectations, especially when it comes to competitive compensation.
The good news is that it’s not too late to face the challenge head on and succeed. In fact, I’m going to give you three guiding principles to follow to help get you there. These are based on lessons learned from extensive work by the Executive Value Network for HR, as well as various research insights, such as the Workforce 2020 Report with Oxford Economics.
Ready? There are three critical building blocks that you need to put in place in order to succeed in navigating the major changes and intense scrutiny from senior management that lie ahead.
- First, you must get the fundamentals in place and create transactional excellence. By this I mean really taking a fresh look and reviewing your current HR service delivery model. Drive out inefficiencies in your HR processes by automating manual tasks to lower costs, and achieve more productivity with less effort.
Most people think they have the basics covered until they really think it through. This includes looking at your core HR applications, such as putting a global system of records in place, that caters for both global and local considerations – including translation, time zones, currencies, local accounting practices, legal requirements and compliance mandates – providing insights about an individual’s knowledge, skills, expertise, performance scorecards, career and development plans, as well as information connections and social insights, and of course, ensuring your HR and IT governance policies are in place.
- Second, have the tools and capabilities in place to nurture a high performing workforce. Ask yourself the hard questions. Are you able to identify your critical talent, and if so, do you have a plan for how you’re going to retain and compensate these rainmakers? What’s your plan for individual career development, and do you have a well thought out strategy in place for creating a high performance culture. If you do, how are you going to execute this strategy? Do you have the right systems in place for collaboration and knowledge sharing to connect different skill sets and individuals in your workforce?
CEOs around the globe fear losing high potential middle managers more than any other role. In a world of scarcity, identify and developing leaders and functional experts at all levels will be critical for future success. Rather than targeting only specific individuals or specific positions, look to identify and build talent pools or groups of individuals who can fill a variety of strategic needs.
- Third, understand what will set your company apart from your competitors to make HR a key player in moving your business forward, rather than just a partner who is running the business (as opposed to changing it). HR needs to map the corporate strategy and plans to workforce goals cascaded across the organisation at the individual level, and put the right workforce planning and analytics tools in place to harness that talent as the business demands. And with all of this, we must not forget the underlying values and culture that will underpin your organisation as a whole.
In short, to meet the 2020 workforce challenge head on, you need to bring together each distinct talent initiative – performance, compensation, succession, development, recruiting and collaboration – into a single and highly calibrated talent machine. Only then – and perhaps for the first time in your company’s history – will HR be used to establish a significant competitive advantage for your organisation.
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Happy New Year!