HARVEY NASH HR SURVEY 2018 GROWTH. CHANGE. UNCERTAINTY.

Transcription

1 HARVEY NASH HR SURVEY 2018 GROWTH. CHANGE. UNCERTAINTY.

2 About the survey Growth. Change. Uncertainty. Human resources professionals are used to change they see it all around them. Whether it s working with the board on a new growth strategy, or helping shape the organisation s structure to compete in an increasingly competitive world, HR is a key part of getting businesses from A to B. But the world is also changing. Digital innovation, shifting consumer patterns in the global economy, the increasing need for organisations to have a purpose in society, and even political uncertainty, are affecting organisations in ways they never have before. reflecting the views of over 800 HR leaders across the world, this report shows how HR is leading the way in helping organisations adapt and change for the future. It also shows that there is more work to do, as HR looks to gain more support and influence on the board, as well as capitalise on the ever-expanding opportunities, and challenges, of digital. But one thing is for sure: there has never been a more exciting time to be in HR. Welcome to the 2018 HR Survey. I hope you find it valuable in your business and career planning. 820 respondents A comprehensive study of the HR community 38 countries From Saudi Arabia to Sweden In one of our other globally recognised studies the Harvey Nash CIO Survey we report that almost half of organisations are investing in digital transformation strategies. And no function is more affected by, or so intrinsically involved in this, than Human Resources. This year s Harvey Nash HR Survey shines a light on all this. Now in its seventh year, and Albert Ellis CEO, Harvey Nash 127 different job titles From HR Consultant to Learning & Development Manager to Head of HR Contents The board wants HR to deal with growth HR is valued, but not going places? It s all about taking control AI right here, right now Time to perform Into a flexible world Recruitment is all about the brand Direct is best? Diversity progress is slow Gender diversity is the priority What drives HR People? 2 HARVEY NASH HR SURVEY 2018

3 What you need to know You re hired! Time to perform It s all about the brand Recruitment is the most important issue the board wants HR to address (29% feel this is a top three issue). Developing leadership capability and employee engagement are the next most important. There has been a big jump in organisations implementing performance management programmes (a jump from 25% to 36%). 70% of HR respondents listed building an employer brand as very important when it comes to recruitment, making it the single most important thing to do when hiring. Non-human resources Taking control The direct line Over a quarter (26%) of HR professionals already have their workforce planning impacted by AI and automation. Over half of HR departments (56%) say it is more important for HR to do more for the business, rather than empower the business to do more HR: a swing of 9% since % of organisations are hiring their staff directly, the highest figure for five years. Recruitment agencies are focusing on adding value, and dealing with complexity. Is image everything? Your flexible friends Does the board value HR? On the whole, HR is satisfied with how it s seen by the business (62%), but this figure has stagnated over the past three years. Organisations are increasing their use of nonemployee labour. Currently the proportion of organisations with 20% or more of their workforce as non-employee labour is 31%; this is expected to rise to over 40% within five years. 52% believe HR is very important to the board: good news for half of HR people, but this figure hasn t changed much since last year, and it still leaves almost half who feel there is more to do. HARVEY NASH HR SURVEY

4 The board wants HR to deal with growth We asked what the top three priorities of the board were for HR, and the results were clear. Recruitment, developing leadership capability and employee engagement were all top priorities, suggesting that growth both in terms of headcount and development of people is high on the agenda. Downsizing, a priority that has featured in previous years, is of concern to only 4% of the 800 organisations featured in this survey. This positive outlook by organisations boards reflects a similarly positive outlook for the world economy by commentators such as Goldman Sachs. Some of the more mechanical aspects of HR appear lower down the priority list: performance metrics, automation and industrial relations are of interest to less than 5% of organisations boards. Even training and education is of interest to only 11% of boards. It s not to say these aren t important, but when HR is in conversations with the board, it is recruitment, developing leadership capability and employee engagement that are the topics most likely to grab their attention. What three key issues that your board is looking for HR to address? Recruitment Leadership capability Employee engagement Talent management Employee retention & motivation Culture development Performance management Change management Business efficiency Organisational growth HR systems & processes Capability & competence management Training & education programme Management development Succession Performance metrics Diversity Downsizing Automation Flexible employment Industrial relations (trade unions) 3% 3% 2% 4% 4% 4% 7% 9% 12% 11% 21% 21% 19% 19% 18% 17% 16% 15% 25% 29% 27% 4 HARVEY NASH HR SURVEY 2018

5 HR is valued, but not going places? Are you satisfied by the image of HR as seen by the business? A 35% % How important is HR to the board? (Filtered by Very important ) A A 37% 2017 yes 63% no A % 52% A 38% % On the face of it, HR occupies an enviable position in organisations: almost two-thirds of respondents believe the business truly values HR, and half believe the board feels HR is Very important. But, like many things in life, the direction of travel is just as important as the location, and it s worth noting that in both instances the graph is levelling out; in fact in the case of the business view of HR, it s declining slightly. Compare that, for instance, with our sister report, the CIO Survey, where the CIO reached its most influential position in the ten years we have been tracking it, built on the surging importance of digital. HR has a difficult challenge. The board and CEO know that people matter in many cases people are the most important asset a company has. But that is a separate question from how much HR matters as a function. On the one side is the long tail of necessary, but sometimes thankless, mechanical basics listed previously. On the other side are activities that make a strategic difference. Getting the balance right is so important: no board will listen to a strategic visionary who can t get the basics right, but basics alone will not get you in front of the board. HARVEY NASH HR SURVEY

6 It s all about taking control What s more important: HR doing more for the business or getting the business to take more responsibility for HR? A A A 53% 50% % % HR do more Business do more 44% % Pharmaceuticals Utilities Advertising / PR Construction / Engineering Financial Services Business / Professional Services Energy Technology / Telecoms Manufacturing Retail / Leisure Healthcare Education Transport & Logistics Government / Public Sector Broadcast / Media Charity / Non-profit All 73% 71% 67% 64% 64% 57% 57% 56% 56% 56% 56% 52% 49% 45% 44% 36% 57% 27% 29% 33% 36% 36% 43% 43% 44% 44% 44% 44% 48% 51% 55% 56% 64% 43% Getting HR to do more for the business Getting the business to take more responsibility for HR In an age increasingly defined by software products that empower line managers to do more for themselves, it is tempting to think that the ultimate destination of operational HR is in the hands of the business. In fact, two years ago that is exactly what you were saying over half of you said that the business should be taking more responsibility for HR. Since then, though, a line has been crossed and the opposite is now true over half of you are saying that HR should be doing more. There are differences between sectors. Pharmaceuticals and Utilities are most enthusiastic about HR taking control. Not-for-profit sectors like Charity, Public Sector and Education are more inclined to encourage the business to take responsibility for HR. There is, of course, no right or wrong approach here and the structure of an organisation such as whether it is centralised or federated will be an important factor in defining the role HR plays. 6 HARVEY NASH HR SURVEY 2018

7 AI right here, right now At what point do you think technologies such as artificial intelligence and automation will be sufficiently advanced that they will impact workforce planning in your organisation? Never 11+ years 6 10 years 2 5 years Now 2% 4% 6% 9 % 17 % 20% % 26% 46% 45% There has been a lot of talk about automation and AI in recent years: in the UK, for instance, a recent report by the Bank of England cited that up to 15 million jobs could be at risk of automation. While the report shone a welcome light on a trend that will affect us all, like many studies on automation it was scant on the specifics and didn t assess what is happening right now. So turning to the data from the HR Survey, what is striking, and surprising to us, is just how many organisations are being affected by automation and AI right now 26% are accommodating it in their workforce plans, a big jump up from 17% last year. Within five years that proportion is likely to rise to seven in ten. In other words, for the vast majority of organisations, AI / automation will become commonplace. In our sister report, the CIO Survey, we are finding that AI / automation is currently mostly targeted at IT departments (e.g. automated testing) and customer services (e.g. automated call handling), but its expansion into other areas is growing in some cases quite rapidly. HARVEY NASH HR SURVEY

8 Time to perform To what extent has a performance management programme been implemented at your company? all / almost all relevant people are all / almost all part of a programme relevant people are part of a programme 36% Mostly all / almost most all people relevant people are are part part of the of a programme are some gaps all / Partially 28% almost some people all relevant are part people of the programme, are part of but a programme there are major gaps 23% No all extent / almost none all / very relevant few people are part of a programme a programme 13% programme, but there Performance management can, of course, mean different things to different people, but one thing is for sure it is a key tool for most organisations. Over one-third of organisations have it fully in place, and another 28% have it in most areas. Organisations with fully implemented performance management programmes 30% 30% 25% While in past years the use of performance management had appeared to level out (in fact, in our last HR Survey we reported a drop), this year we have seen a marked increase. This year, one in five boards feel it is one of their top three HR issues. Performance management is most likely to be found in the Financial Services, Energy and Pharmaceuticals sectors all strongly customer led. It is less common in Construction, Media / Broadcast and Advertising / PR. As organisations plan ahead and get a firm grip on their customer and digital strategies, the importance of plugging the employee in to those strategies becomes more important. 36% HARVEY NASH HR SURVEY 2018

9 Into a flexible world In the next five years, what is your destination proportion of non-employee labour? 41% Over the next two years, what do you expect to happen to the following forms of non-employee resources within your organisation? 22% 12% 12% 4% 5% 1% 2% 1% 0% 0% 0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Outsourced employment Managed service contracts Consultancy Contracting 12% 9% 16% 15% 39% 45% 47% 45% 35% 28% 29% 31% 14% 18% 8% 9% Decrease Stay the same Increase Don't know Organisations are increasing their use of non-employee labour, whether it s through using more contractors and management consultants, or packaging up teams or departments into outsourced or managed service partnerships. Currently the proportion of organisations with 20% or more of their workforce as non-employee labour is 31%; this is expected to rise to over 40% within five years. What s driving this? Flexibility is one key factor; in an increasingly unpredictable world many organisations are looking to focus on their core, and keep the rest of their business flexible as new challenges and opportunities come to them. Another factor is access to skills. In some areas, especially in tech, hiring permanent people is very difficult and sometimes using contractors or consultancies is the only option. But probably the biggest factor is that flexible working seems to be coming of age. Organisations, and people, are getting to grips with making it work; and while there are still clearly challenges in some areas of flexible working (such as the legal rights for gig economy workers), the market seems to be maturing. HARVEY NASH HR SURVEY

10 Recruitment is all about the brand It is clear that when it comes to recruitment, the top priority is brand-building. Please rate how important each factor is for your recruitment team. But it s a job that has got more complicated in the past decade. Social media where views and opinions can be rapidly and widely shared online presents both a challenge and an opportunity. One survey respondent commented about the problem they had dealing with an (in their view) unfair review on the employer rating website Glassdoor, while another mentioned the trouble they had getting an incorrect corporate fact updated on Wikipedia: Good luck trying to find a customer support number for them, she remarked. Improving recruitment reporting Reducing agency spend Structuring the recruitment team to be more effective 14% 24% 30% 45% 54% 39% 41% 31% 22% But social media can also be a positive force; organisations with strong cultures, and a clever HR / Marketing team that understand social media, have an opportunity to reach audiences they never have before. Workforce planning Building a pipeline of talent 5% 4% 36% 42% 60% 53% Perhaps unsurprisingly, given that employee brandbuilding is the priority, talent pipeline and workforce planning are also important. Building an employer brand 3% 27% 70% Not important Quite important Very important 10 HARVEY NASH HR SURVEY 2018

11 Direct is best? Approximately, what percentage of your recruitment is directly hired (e.g. direct to the candidate, without using a recruitment organisation or other third party)? Recruitment agencies close your eyes: HR directors are increasingly hiring direct. The proportion of organisations hiring at least three-quarters of their staff directly has gone from 28% to 39% since % 51-75% 26-50% 11-25% Less than 10% Proportion of organisations hiring at least three-quarters of their staff directly A 28% % 12% 15% A 34% % A 39% % It s not hard to see why. With the growth of tools like LinkedIn, as well as more efficient and automated means for engaging with potential candidates and managing the recruitment life cycle, HR teams have both more access to candidates and more efficient ways of dealing with them. And, of course, these are two key value adds that recruitment agencies offered in the past. But this is only part of the picture. From our experience, organisations are just as keen to work with talent and recruitment companies as before, but increasingly this is focused on roles where deep expertise and market knowledge are required, or where they need more sophisticated solutions like managed services, large-scale recruitment, or outsourced contracts that require detailed planning, advice and, often, legal expertise. The sector is changing it s becoming more sophisticated, more professional. Not all recruitment companies will be able to take this step up though. HARVEY NASH HR SURVEY

12 Diversity progress is slow Are you happy with the progress of diversity in your organisation? To what extent do you have a formal strategy / policy for promoting diversity in your organisation? A 32% 55% 45% 29% 20% yes no 19% 33% 28% 22% 17% 31% 32% 32% 30% 21% 20% 19% 15% Mostly Partially None Most boards and HR directors would say that diversity and inclusion are important to their organisation, but it is clear that almost half are not happy with their progress. Having a formal strategy in place correlates significantly with progress: 80% of organisations that have a diversity programme implemented across their business are happy that diversity is heading in the right direction. It is therefore surprising that almost a half of organisations have very little of a diversity programme in place (either Partially or None ). Of course, improving diversity requires effort from many areas, but this data shows that having a formal programme is one way to make it happen. 12 HARVEY NASH HR SURVEY 2018

13 Gender diversity is the priority all / Lesbian, Gay, Bisexual almost all relevant and Transgender people are part of a programme 12% all / almost all relevant people are part International of a programme expertise Social all / 26% almost background all relevant people are part of a programme 13% Which areas is your organisation actively pursuing to be more diverse? all / almost all relevant Gender people are part of a programme all / almost all relevant Academic people are part background of a programme 27% 54% all / almost all relevant Functional people are part of expertise a programme 32% all / almost all relevant people are Culture part of a programme 39% all / almost all relevant people are Age part of a programme 35% all / almost all relevant people are Ethnicity part of a programme 38% Achieving a better balance of men and women is the diversity priority for most organisations, although culture and ethnicity are also considered priorities. HARVEY NASH HR SURVEY

14 What drives HR people? By a very long margin, HR people are driven by a need to make a difference to their organisation, followed by working on interesting and exciting projects. A good salary is only of high importance to one in four HR leaders. Working for a big recognised company, or a brand you align with, is only important to a very small minority of you. What is clear is that when it comes to their own jobs, HR people look beyond the obvious, external factors, and seek out the underlying value. And in many ways this sums up Human Resources quite neatly! Please identify the three factors that contribute most to your sense of fulfilment. A sense that HR / Talent has an important role to play in the organisation 50% Interesting and exciting work 40% Competent management and a vision for the future 34% An opportunity to shape the business strategy 32% A feeling that I am empowered 28% Access to management / contribute to strategy 28% Good salary 23% A culture of open communication 23% A reputation for fairness and respect 21% A creative / entrepreneurial environment 19% An opportunity to challenge the status quo 17% Working for a brand I align with 16% The opportunity to build a rewarding career 15% A large organisation international career opportunities 10% A financially secure organisation 5% 14 HARVEY NASH HR SURVEY 2018

15 HARVEY NASH HR SURVEY

16