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HR Transformation

Global Leadership Forecast 2018

HR Under Pressure:

Falling Behind in the Race to Transform

Richard Wellins, Sayed Sadjady

The future of work is not tomorrow. It is now, and the implications for our workforces are profound. New career paths, evolving organizational structures and business models, analytics, and digital disruption are trends every HR professional faces. Never has the role of HR leadership been more important in making this transformation happen. Business leaders no longer need to be convinced how important talent is. In a recent article, “The CEO’s Guide to Competing Through HR,”* the authors conclude that HR needs to step out of its traditional silo and embrace a strategic role, using talent to drive value rather than just responding passively to the needs of the business. While HR leadership should be in an enviable position, in reality it’s losing the race. Their organizations are changing faster than they are, putting them even farther behind. We’ve devoted two findings to HR leadership. The section “HR’s New Role: Are They Up to the Challenge?” identifies the evidence-based practices that drive better HR performance. Here, we address the changes HR leaders are experiencing and how prepared they are to meet key workplace challenges relative to leaders in other roles.

HR Under Pressure

HR in the Pressure Cooker

More than 2,500 HR professionals completed the HR-specific version of Global Leadership Forecast 2018, along with 25,000-plus leaders who responded to the leader version. Additionally, eight percent of the leader population were in HR, giving us another rich source of data.

We started by asking HR professionals how their jobs and attitudes have changed over the past three years (see figure above).

HR professionals reported a considerable increase for every experience or challenge. In fact, only two items rated relatively low: intention to leave current job and working across countries/culture. Most notable, by far, is the impact of digital disruption on the HR role. About 70 percent saw an increased need to up their game in applying both HR technology and analytic skills. Pressure to demonstrate financial impact, also requiring keen analytic skills, was on the rise at 56 percent. Near the top of increases was the need to become a trusted senior advisor. As we saw in the section “HR’s New Role,” perceiving a need to change is far different than making one. One in four HR professionals are thinking more about bailing out of their organization. However, on a more positive note, two-thirds felt more engaged.

HR Leader verse other leaders on Key ChallengesThis graphic is based on HR leaders’ responses to the leader survey. They were asked to rate how well prepared they felt for each of seven items characterizing the ever-changing work environment (volatility, uncertainty, complexity, and ambiguity). The number depicted in the graphic represents the difference between the “very effective” responses of leaders who are in an HR role versus all other leaders. In every case, HR leaders felt less prepared than their peers in other leadership roles. These responses are concerning. The work world is experiencing considerable upheaval, yet only one in five HR leaders felt very prepared to handle the top five challenges on the graphic.

Worse yet, the biggest differences are in their perceived effectiveness to operate in a digital environment and use analytics, despite the increased pressure they’re feeling to do so. For example, more than 37 percent of all leaders felt very prepared for a digital workplace. Not an impressive number. By comparison, only 16 percent of HR leaders felt the same way.

Consider this: The digital age will exert a more profound impact on our workforce in about one-tenth of the time of any other massive economic shift. Yet, those HR leaders who should be taking charge to prepare tomorrow’s leaders are farther behind than those they’ll need to support.

* Bafars, F., Ellsworth, D., & Gandhi, N. (2017, July), The CEO’s Guide to Competing Through HR, McKinsey Quarterly.

Where to Start
  • Focus on building capability in business acumen, advanced analytics, and new HR technologies. Elsewhere in this report, you’ll see that the areas where HR leaders are feeling pressured correspond to areas where their performance is perceived to be lacking.
  • We suspect that HR leaders may be under-investing in their own learning as they strive to meet the growing learning needs of leaders in other functions. In reality, HR should be first in line for increased resources and in a continual learning mode.
How to Excel + Differentiate
  • As “owners” of leadership development, one of HR’s chief roles is to prepare leaders for digital transformation. Yet, HR leaders are less prepared than leaders in other functions. Building HR’s digital leadership skills is essential not only to develop others, but also to manage impending radical changes in HR technologies.
  • HR professionals often label themselves as the enablers of talent development, while line managers are the real owners. HR leaders need to take primary ownership for ensuring that their organizations have the talent in place to meet current and future business challenges.
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