MANY COMPANIES are going to have to change their organisational structure and manage their approaches to reward as well as leadership and talent differently if they are to succeed in the future, a new report has found.
The continued strength of the global economy, the pace of change and need for innovation to sustain growth as well as generational change will all affect organisations and the nature of work in the future, and how organisations prepare for these will determine their sustainability and future performance.
“The waves of change are building for organisations – the force of global economies, the rise of gen Y, the rejection of traditional hierarchy, and a blurring of what is inside and what is outside the organisation,” said Richard Hardwick, managing director of Hay Group Pacific, which conducted the report.
Of greatest concern to organisations in the future will be the leadership and talent shortage. Organisations are experiencing this now and Hardwick said this will only become a greater challenge by 2015 when a large proportion of the baby boomer generation has retired.
“We think that leaders will need more support to redefine the talent pool within their organisations. Talent management is the most crucial input to organisations delivering on future performance and ensuring sustainability to 2015 and beyond,” he said.
“Leaders are going to have to take more people risks. They will need to find new ways to empower their top teams to lead sustainable organisations and keep their key talent engaged and rewarded.”
In organisational structure, he predicted a blurring of the boundaries between internal roles and external roles, and as such, people will have to learn to work in different ways across these boundaries.
“We will also see the demise of traditional hierarchies as a more reciprocal relationship between individuals and organisations are established,”Hardwick said.
In leadership and talent, he said organisations are already seeing a changing of the guard with generation X increasingly taking on senior leadership roles.
“In the future, we will have to define new models of leadership which meet with the aspirations and needs of generation X and generation Y as they increasingly take over the leadership reins from the baby boomers. CEOs will also managing more diverse and cross-generational executive teams, bringing a new set of challenges,” he said.
In relation to reward, organisations will need to emphasise intrinsic rewards from roles much more, and focus less on extrinsic rewards such as salaries and bonuses.
“Organisations will need to be far more aware of the motivational and engagement factors of their employee groups and tailor reward packages to suit. I also see employee engagement continuing to become a more critical measure of return on investment in relation to reward strategies adopted by organisations,” Hardwick said.
There were a number of implications for HR as a result of the report’s findings. In the future, he said the HR role will become even more critical in organisations as the leadership drought and talent shortage intensify.
“Today, HR professionals need to raise these issues with their leadership teams to increase awareness and prepare their organisations for future change. They need to convince their line managers that these issues are real and require action now for their organisations to have a sustainable future,” he said.
To meet the increased demands that will be placed on HR, Hardwick said HR professionals will have to adopt many new roles in the future.
“They will need to become better marketers, to sell the breadth of their reward offering and the attributes of their organisation to new and existing employees. They will need to become innovators, to define the new attributes required of future leaders rather than create leaders in the old mould,” he said.
“And, more than ever, they will need to be business partners and speak the language of the line in order to contribute to and then lead the organisation development debate within their organisations.”
Looking towards 2015, Hardwick said HR professionals will be required to enhance flexibility in every way possible throughout their organisations. In this way they can help their organisations adapt to the future in the most sustainable manner.
Steps for preparing for the future
1. Innovation in employee retention. In order to help sustain their organisations into the future, HR professionals will need to go beyond the usual methods of ensuring attraction and retention of employees, in particular key talent. Employees will not want long-term roles in one organisation. Instead, HR will need to explore means of extending employment through using secondments to other organisations, transfers across countries to organisations in the same sector and the use of sabbaticals earlier in people's careers.
2. Flexibility. HR professionals need to embrace flexibility to adapt to changing organisation structures and roles. They need to have a clear map of the talent that lies within their organisations, rather than an outdated list. They need to really know the skills, knowledge, attitudes and behaviours of their workforce together with the future needs of the organisation so that it can be flexibly deployed to best effect into ever-changing roles.
3. Collaboration. To develop their own people and organisation they will need to remove the many barriers that get in the way of this collaboration. This will allow them and their organisation to connect with other people and organisations more effectively. This will lead to new definitions of what "working for the organisation" means.
Source: Richard Hardwick, managing director of Hay Group Pacific