Mercer, in partnership with the Human Capital Leadership Institute (HCLI), recently conducted a webinar on transforming human capital capabilities for the future. Here’s what you missed.
Tuesday, 11 May 2021, 11 am - 12 pm (SGT)
The tone for the discussion was set with the first poll that asked attendees whether their HR managers are equipped with the business acumen skills needed for their organizations.
Doris Sohmen-Pao, CEO of HCLI, identified two crucial objectives for HR. The first is to explain and define the importance of business acumen skills for the HR practice; and second is to share tips to upskill their human capital practices.
Building on the introduction, Lewis Garrad, Partner & Business Leader, Singapore Career Business at Mercer, put forth a vital question: Why is it important to link people and business strategy, and what role does HR play in it?
A Changing Context
When talking to HR professionals, it is usually going straight into the ‘people stuff’. However, beyond that, it is also important and useful to think about the business drivers changing the way people work. In most businesses, the four big themes driving business transformation and the way people work include more focus on customers, increased digitalization, shifting economic interest paired with a focus on sustainability, and an increased thrust towards innovation to fuel new revenue streams. This in turn influences an organization’s future strategy. These trends are changing the workforce of the future, where expectations on employee’s purpose, new skills, and rising importance of connectedness become increasingly important. Driven by changes in demographics, a new shape of work is then blueprinted where a number of important questions arise surrounding how a workforce should be managed.
When speaking to companies, Lewis commented that some of the key challenges they face include:
“How do I know I have the right people? And if I don’t have them, where will I find them? Do I need to build them, buy them, or borrow them? What are the different workforce models we can use in order to access the kind of talent we need?”
It becomes impossible to answer these questions unless one really understands the business strategy, according to Lewis. He adds that organizations are shifting to be more agile, and that is not talking about technology, but a shift in human capital strategy and how they connect people to work.
Thus far, organizations have mostly functioned under a ‘talent in fixed role’ model. However, this is quickly changing. HR is increasingly looking at more skills-based talent practices that are more flexible, and allow companies to understand the skills that people have and apply those skills to new and interesting problems for their businesses.
People Are Central to Any Transformation
Alex Hungate, President and CEO at SATS, said his company had already been working towards redesigning their business strategies prior to the pandemic, but COVID-19 furthered this transition; with SATS growing their non-aviation food business by 50 percent per annum, while redeploying about 10,000 people (more than 50 percent of SATS staff) in new roles. Upskilling people, preparing people for the change, and thinking about how jobs can be designed to facilitate these moves formed the crux of this transformation.
In his mind, the mantra for this shift is “Technology-driven but people-led”. “That brings us squarely into the topic for today because all technology on its own is quite useless. There’s a lot of exciting technology and you can get starry eyed about it. But unless the people in your organization want that technology to work, unless they are coming up with the ideas about how to apply that technology, you won’t have a successful transformation,” says Alex.
“Companies today are at the intersection where traditional HR meets the future of HR,” said Stephanie Nash, Co-creator of Thrive HR exchange and Chief People Officer of ChapmanV. She adds that HR leaders need not abandon existing models and practices but need to think about a more future-focused HR strategy.
HR needs to focus on ensuring digital technologies, tools, and policies are in place to actively communicate business strategies to stakeholders internally so as to mobilize employees to jointly deliver on ambitious company goals.
Stephanie also added that it is equally important to shift focus towards employee wellbeing. “We hope there will be a greater level of awareness and embracing the need for organizations to support employee wellbeing.”
The people factor is now more important than it was before.
Managing Compensation and Benefits
There has been a spurt in the demand for better compensation and employee wellbeing benefits. One question asked during the webinar was: Do you see changes in how organizations are managing compensation and benefits?
“Increasingly, we are seeing new compensation models emerging, because compensations and rewards strategy is really a talent strategy,” said Lewis. “You can’t have one without the other. So, we’re seeing the emergence of more skills-based compensation practices which are very complicated, but very data-driven.”
New workforce models are increasingly encouraging HR leaders to look at traditional HR processes more innovatively. Stephanie also added that the millennial workforce value benefits or compensation that is built around wellbeing and sustainability. And in keeping with this change, organizations are increasingly moving away from traditional employee benefits to holistic wellbeing plans.
HR and Organizational Culture
Addressing a question on how CHROs can work with management to build the right culture for companies, Alex commented that HR leaders need to think about culture as a capability and that “it needs to be intentional, almost analytical”. HR should also collaborate and partner with business leaders to ensure that everyone is aligned about the importance of the journey towards a defined strategic outcome, and understand what is the business objective of moving the culture in that direction. To this, Lewis added that, “culture and capabilities are part of the same problem”. It is useful and practical to “break down culture to make it less like a fluffy abstract concept”.