The present moment marks the era of the future of work, with profound shifts in our work methods, locations, motivations, collaborators, and everyday technologies affecting leaders across the board.
According to the findings from the Global CHRO of the Future research by Executive Networks, an overwhelming 93% of CHROs concur that the influence of the HR team on business outcomes holds equal significance to that of the finance team.
This study encompassed insights from 112 CHROs who are affiliated with Executive Networks, as well as distinguished senior HR leaders representing our research partners, which include meQuilibrium, University of Phoenix, TaskHuman, and XpertHR.
Research methodology comprised a combination of in-depth qualitative individual interviews and a comprehensive 40-question quantitative online survey.
Presented below are four crucial insights extracted from this research:
1. Top Challenge for CHROs: Attracting and Retaining Talent
As per the research findings, a noteworthy 83% of CHROs acknowledge grappling with a substantial challenge related to talent retention. Additionally, half of them indicated that retaining talent posed a particular challenge within roles that are in high demand.
In the previous year, a staggering 47.8 million workers voluntarily left their jobs, equating to an average of nearly 4 million departures each month. Nevertheless, the real issue lies not merely in the elevated turnover rates, but rather in delving into the underlying reasons for this phenomenon.
In the Global CHRO of the Future study, it was observed that voluntary turnover rates exhibited considerable diversity across industries. Notably, the professional services sector recorded the highest rates, reaching up to 20% for knowledge workers and 40% for direct patient care nurses.
The research delved into the underlying factors that contribute to voluntary turnover, which encompass a wide spectrum of issues. These factors include employee stress and burnout (these are the most concerning), followed by issues with improving performance and a lack of transparency around work-life balance.
Interestingly, only 18% of survey respondents believe that employees leave because they want more money.
Elevating Employee Well-being at Microsoft
Microsoft is expanding its analytics capabilities by moving beyond simply measuring employee engagement and now focusing on measuring overall employee health.
Workers around the world appear to be gaining newfound importance in so-called “value” equity, according to data from the Microsoft Business Trends Index. Approximately 53% of respondents, including the majority of parents (55%) and women (56%), expressed a preference for changes in occupational health and well-being resulting from the impact of contamination.
In response to this change, Microsoft launched a program called “Microsoft Cares” that provides employees with a platform that provides 24/7 access to Mental Health Counselors, Health Coaches, and many other legal services. , financial and nutritional problems. Integrating this positive approach towards health into the company culture is considered an important step in creating employee health.
2. Transform the Concept of Employee Well-Being and Mental Health from a ‘Perk’ into a Vital Business Strategy
According to Gallup’s State of the Global Workplace report, individuals across the globe are grappling with high levels of stress, with 44% of employees indicating that they experience significant stress on most days. Furthermore, what raises even greater concern is that fewer than a quarter of employees believed that their employers genuinely prioritized their well-being.
Our research revealed that 42% of CHROs reported an increase in their budgets for employee well-being programs, with some experiencing growth of up to 9% in the past year. An additional 21% noted that their well-being budgets had expanded by as much as 19%.
However, simply allocating more financial resources is not the sole solution to addressing the rising concerns of employee stress and burnout. Initially, companies need to adopt a holistic perspective on well-being, recognizing that it encompasses physical, emotional, financial, career, and social aspects, and they must commit to integrating well-being into their overarching business strategy, rather than considering it merely an HR perk.
PwC is incorporating well-being and flexibility at the core of its organizational culture. Employees now have the freedom to determine where, when, and how much they work.
They can opt for in-person, virtual, or hybrid work arrangements, with the added flexibility to choose customized options such as reduced work schedules, paid leaves of absence, and the potential to work from any location.
Furthermore, PwC is enhancing its mental health support by expanding mental health benefits, including increasing the annual free visits to mental health professionals from six to twelve and elevating the reimbursement rate for out-of-network mental healthcare from 70% to 90%.
3. Anticipate a Heightened Presence of HR Matters on the Board of Director’s Schedule
With the emergence of the ‘Great Resignation’ phenomenon and the heightened requirement for companies to disclose their ESG (environmental, social, and governance) metrics, it comes as no surprise that HR-related matters are increasingly finding their way onto the agendas of Boards of Directors.
As more organizations integrate ESG principles into their operational practices and strategic outlook, they view ESG and DEI not merely as instruments for reporting but as means to attract and retain talent.
The 2022 Edelman Trust Barometer reveals that societal leadership has become an integral facet of business operations. A noteworthy six out of ten survey respondents expressed the expectation that, when considering a new job, their CEO should actively engage with social issues and be visible in this regard.
Cisco’s 2021 Purpose Report extensively covers the company’s endeavors across various ESG (Environmental, Social, and Governance) domains. In the realm of sustainability, these efforts encompass the development of more compact, energy-efficient packaging and products, active engagement with partners, suppliers, and customers, the adoption of hybrid-work solutions, and the establishment of ambitious net-zero objectives for reducing greenhouse gas emissions.
An illustrative instance highlighted in this report showcases Cisco’s Silicon One technology, which demonstrates how the Cisco 8201 router not only provides 35 percent more bandwidth but also achieves this with a dramatically reduced power consumption of 26 times less, all within a smaller, lighter, and more cost-effective package.
Fran Katsoudas, Cisco’s EVP of People, Purpose, and Places, underscores its significance by stating, ‘It showcases how our technology not only delivers the fastest speeds and the most secure products to our customers but also assists them in addressing sustainability challenges.”
4. Prepare for the Synergy of Human and Digital Workforce
According to a research sample, a significant transformation in the workforce is anticipated by 2025, characterized by reduced dependence on full-time employees and a concurrent rise in part-time workers, gig workers, and increased utilization of digital automation tools (bots). This evolution is detailed in Figure 5.
The future of work doesn’t revolve around the replacement of humans by bots; rather, it revolves around the creation of a new ‘blended workforce,’ wherein humans collaborate in partnership with bots.
A study conducted by Honeywell International indicates that over 60% of US companies are inclined to invest in automation as a means of addressing the challenges brought forth by the global pandemic.
DBS Bank employs its chatbot, named ‘Jim,’ to evaluate resumes, integrate candidate pre-screening interview responses, pose inquiries, evaluate responses, and subsequently forward this information to the human recruiter.
The implementation of this chatbot has resulted in a substantial decrease in candidate abandonment rates, plummeting from 15% to a mere 3%. As Jim’s role expands, DBS envisions the emergence of a new position, ‘Chatbot Coach,’ aimed at collaborating with DBS human recruiters to ensure Jim consistently provides precise responses to candidate inquiries.
This enables human recruiters to allocate more of their time and attention to the strategic aspects of their roles.
Moving Forward: Four Immediate Actions to Take
Foster a Culture of Well-Being and Inclusivity
Statistics from the American Stress Institute reveal that three out of every four adults regularly experience stress, as indicated by the American Psychological Association’s ‘Stress in America’ survey.
Workers who grapple with burnout often attribute it to a multitude of stressors, encompassing the COVID pandemic, escalating inflation, geopolitical conflicts like the Russia-Ukraine crisis, the blurring boundary between work and home life, and concerns regarding job security, finances, and the economy.
As these disruptions persist, an increasing number of employees are reporting symptoms indicative of prolonged and acute stress.
This stress exacts a toll on employers.
Strategies for Enhancing Workplace Well-being and Flexibility
According to the American Institute of Stress, job-related stress and its adverse impact on mental health incur an annual cost of nearly $300 billion for U.S. employers.
Kathleen Hogan, Microsoft’s CHRO, emphasizes the importance of establishing a culture that promotes empowerment and inclusiveness. Such a culture ensures that each employee can perceive their work as significant and views themselves as an integral and mission-critical element within the organization.
This sense of interconnectedness conveys a strong message to employees, demonstrating the employer’s unwavering dedication to fostering their well-being.
Adopt a ‘Test and Learn’ Strategy for Cultivating Workplace Flexibility
The journey begins with leaders exhibiting curiosity and confronting the diverse array of emerging work methods. They should actively propose experimental approaches to how tasks are accomplished. It’s imperative to leverage the experimentation acumen honed during the pandemic and integrate it into our HR playbook.
We can look to a model for guidance: the software development framework, which involves stages of testing, discovery, design, and development. This framework can help us reimagine a multitude of our HR processes, ranging from onboarding to learning and development.
Don’t Forget to Foster Your HR Team Members
Regularly connect with your HR team members, as they have been at the forefront of navigating substantial transformations in the workplace.
In just the last two years, the HR function has extended well beyond its traditional people management role, encompassing responsibilities related to business continuity plans, mental health support, the formulation of return-to-office strategies, handling furloughs, and elevating well-being from a mere ‘perk’ to a pivotal business strategy.
It’s hardly surprising that LinkedIn data indicates HR experienced the highest turnover rate over the past year, surpassing even sales, IT, and engineering. Globally, HR registered a turnover rate of nearly 15%, whereas the overall average turnover rate stood at approximately 11%.
Lastly, We Must Remember That Work Is an Inherently Human Experience
Consider that humans dedicate approximately one-third of their lives to work, which amounts to roughly 90,000 hours over the course of a lifetime. As the renowned writer Annie Dillard astutely noted, ‘How we spend our days ultimately defines how we spend our lives.
In a rapidly changing work landscape, HR’s role is paramount. Our research underscores HR’s strategic importance, with 93% of CHROs acknowledging its impact on business outcomes. Talent retention challenges persist, while holistic well-being and workforce synergy are key priorities. Embracing change and nurturing HR teams is crucial.