Deloitte Report: Good News for HR, Sobering Stats for the Organization

9045254666_a29652749b_bDeloitte’s 2016 Global Human Capital Trends report contains some encouraging findings for Human Resources. For other facets of the organization the report is more sobering.

Based on surveys and interviews of more than 7,000 business and HR leaders worldwide, the report reveals:

  • 68% of participants said their companies have solid development programs for HR professionals.
  • 60% believe they are holding HR accountable for talent and business results.
  • And 40% said their companies are ready to address the skills gaps in HR.

All of these percentages are higher than they were in the 2015 Deloitte report, indicating that HR continues to gain credibility as a strategic function rather than a merely transactional one.

The needle is moving in the right direction on HR’s performance scorecard as well, which shows “a marked and steady improvement” in several areas. For instance, 60% of executives said their HR teams are innovative, up from 56% in 2015. And 64% said “HR is embedding itself and aligning with the business,” up from 58% in 2015.

The report’s authors also stated this about HR’s performance: “For the first time in the four years of the Global Human Capital Trends report, there are real signs of change and progress: HR teams are learning to experiment with new ideas; they are making significant steps to upgrade skills; and a new generation of younger, more business-savvy and technology-empowered people is entering the profession.”

The Picture Isn’t Entirely Rosy

When asked to rank human capital trends in order of their importance, executives cited the following as their top three: 1) organizational design, 2) leadership, and 3) culture. They also identified serious organizational challenges in all three areas.

Here’s what the report uncovers about each:

Organizational Design
92% of executives rated organizational design as a top priority but only 14% believe their companies are ready to effectively redesign their organizations. Additionally, only 21% feel expert at building cross-functional teams and even fewer (12%) understand the way their people work together in networks.

89% of executives rated the need to strengthen, reengineer and improve organizational leadership as an important priority. Yet more than half (56%) report their companies are not ready to meet leadership needs, and nearly a quarter of companies (21%) have no leadership programs at all.

86% of executives cited culture as an important or very important issue. However, only 12% believe their companies are driving the “right culture,” and just 28% report that they understand their organization’s culture.

Despite These Gaps …

Executives and HR leaders indicated that some progress has been made in a few of these areas. For example, regarding organizational design, 45% of executives reported their companies are in the middle of a restructuring or are planning one. And in leadership development, companies have grown their investment 10% since last year.

Additional hot-button issues addressed by the Deloitte report include employee engagement, people analytics and workforce management. The report offers plenty of valuable insights for those interested in benchmarking their organizations’ human capital initiatives.


Photo: Flow chart via photopin (license)

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