Despite a bold agenda for change, business executives claim organizations are not “change agile,” new Mercer study finds

22 March 2017

Asia-Pacific, Singapore

Executives’ plans for redesigning their organizations to compete in a digital age do not effectively fold HR into the strategic process. HR leaders juggling gap between demanding C-suite and employee expectations in a rapidly changing workplace.

As the competition for talent continues to rise and business models are disrupted by technology and socio-demographic shifts, organizations are still taking an evolutionary approach to their talent strategies in the face of revolutionary changes. According to Mercer’s 2017 Global Talent Trends Study, the majority (75%) of organizations surveyed in Singapore report they are planning to redesign their structure in the next two years, yet just 25% of business executives say their organization is “change agile” – although this is significantly higher than the global average of just 4%.

“In an age where digitization, robotics, and AI are wreaking havoc with traditional business models, it is easy for executives to focus on superior technology as the solution to ensuring the competitiveness of their organizations and to overlook the human element,” said Ilya Bonic, President of Mercer’s Career business. “Growth rests on engaging and empowering today’s workforce in ways that we are just beginning to uncover. It takes employees armed with the right skills and opportunities to develop innovative solutions to advance the business and themselves.”

Mercer’s study shares insights from over 7,500 perspectives globally, 445 of these in Singapore, and compares the views of senior business executives, HR leaders, and employees from organizations around the world. The report assesses significant gaps in alignment, identifies several critical disconnects concerning change, and makes recommendations to capture growth.

Most notably, despite organizations’ plans to transform, HR leaders do not have organization or job redesign on their list of priorities for 2017. In fact, the top priorities of HR leaders – specifically developing leaders for succession, building skills across the workforce, identifying high potentials, and attracting top talent externally – reflect the priority of evolving employee capabilities, but may not align with executive’s goals for more substantial workplace change (see Figure 1).

Additionally, while HR leaders express confidence in the talent management processes they have in place (68%), employees are still looking elsewhere for new opportunities. Slightly under half (44%) of employees say they plan to leave their current role in the next 12 months, even though they are satisfied in their jobs. Equally concerning is that those employees not planning to leave their current roles report they are less “energized” in terms of bringing their authentic selves to work and therefore, less likely to thrive in a collaborative and innovative workplace. Moreover, both business executives and HR professionals alike are viewing talent scarcity acutely, with 50% and 43%, respectively, expecting a significant increase in competition.

“Organizations need to prioritize a culture of agility to stay ahead of rapidly changing market trends,” said Kate Bravery, Global Leader for Mercer’s Career business. “Those employers that empower their workforce – by helping them plan for the unknown, mitigate risk, and thrive at work – will be more successful in building a responsive and successful organization.”

Puneet Swani, Partner and Growth Markets Career Business Leader at Mercer added, “In an established financial hub such as Singapore, it is imperative to fully understand patterns in talent flow and drivers of change. It is encouraging to see that compared to the global average, 25% of companies in the Red Dot city consider their organizations as ‘change agile’, but this only puts a spotlight on the 75% of companies highlighting their need to rethink their talent infrastructure and day to day practices helping them to become more prepared and stay ahead in this competitive landscape.”

What is not on the HR agenda for 2017 demonstrates misalignment and perhaps missed opportunities to leverage what employees report as important:

Health over Wealth – Despite 62% of employees in Singapore ranking their health as more important than their wealth or career, only 37% indicate they expect their workplace to become more focused on employee health in the next few years, and health and wellbeing ranked second to last on HR leaders’ list of top talent management priorities this year. “Navigating the changing talent ecosystem by redesigning future roles and supporting employees’ health and wealth needs is already becoming a market differentiator,” said Mr. Bonic.

Wealth over Career – While the majority (95%) of employees reported that they want to be recognized and rewarded for contributions beyond the organization’s financial results and activity metrics, not quite half (45%) think their company does this well. Furthermore, fair and competitive compensation ranked at the top when asked what would make a positive impact on their work situation, yet rewards still ranked outside the top five priorities for HR leaders (see Figure 2).

Gig Is Big – Flexible work arrangements are important to employees, with more than half reporting that both their direct manager and company leaders are supportive of it (55% and 51%, respectively). Nevertheless, 50% of employees believe working remotely or part-time can adversely impact promotional opportunities. And while more than three-quarters (80%) of full-time employees would consider working on a contingent or contract basis, neither business executives nor HR leaders have embraced these new forms of employment as much as expected or desired.  Both the C-suite and HR leaders agree that they do not expect the “gig economy” to have a significant impact on their business in the next two years. “It’s a risk for any organization to ignore opportunities for people to work more independently,” said Ms. Bravery. “Those companies that find ways to leverage a more fluid workforce will harness growth and outpace the competition.”

A Relevant Experience – Beyond flexibility, personalization is essential for creating an experience that resonates with employees. Less than half (40%) of employees say that their company understands their unique interests and skills, while 53% want their company to increase this understanding and help them invest in themselves. “Employees are increasingly bringing a consumer expectation to the workplace since it is how they engage in almost every aspect of their lives,” said Ms. Bravery. “It creates an authentic environment in which employees can excel. When done right, it does not feel like personalization – it just feels like a great experience.”

Digital Divide – Aspects of technology also show HR is lagging expectations of both executive leadership and employees. Business executives (75%) believe technology at work, including automation, robotics, machine learning, and wearables, is the workforce trend likely to have the most impact on their organizations in the next two years. Yet, just over half (56%) of HR professionals agree. For employees, it is even more basic: less than one in five (18%) organizations in Mercer’s study say they do not provide any digital experience for interacting with HR.

“Despite the desire to cling to more traditional methods, the landscape for the workplace, the workforce, and the future of work are changing too quickly and drastically to do so,” said Ms. Bravery. “To stay competitive, it is imperative that business executives and HR leaders collaborate and that organizations take new approaches to how employees access knowledge, adapt to technology, manage, communicate, and leverage their careers.”

Mercer’s 2017 Global Talent Trends Study, which examines the top trends impacting today’s workforce and how organizations are responding, uncovered four trends that are shaping the outlook for this year: Growth by design: The C-suite’s change agenda to drive growth, The quest for insight: Analytics will be a key player in winning the war for talent, A shift in what we value: Recognizing what matters most to employees, and A workplace for me: Continued focus on personalization and flexibility. The study is based on the input of more than 1,700 HR professionals, 5,400 employees, and 400 business executives from 15 countries and 20 industry sectors.

For more information or to request the full report, visit http://www.mercer.com/our-thinking/global-talent-hr-trends.html.