The HR Revolution

As a result, companies need to become what Mercer Partner and North America Workforce Rewards Practice Leader Mary Ann Sardone describes as "change agile." This capability—which largely hinges on HR's ability to find and secure the right skill sets—is in relatively short supply right now: Mercer research indicates that only 18 percent of C-suite leaders describe their companies as change agile.  

Deloitte Consulting Principal and U.S. Human Capital Leader Erica Volini notes that "digital transformation requires organizations to focus on a number of human capital priorities" including, for example, leadership development. "The most digitally mature companies are four times more likely to be developing digital leaders than the least mature ones," she reports. "Transforming digitally requires a change in pace, culture and mindset, and a propensity to experiment and iterate."

CHROs have their hands full.

5 (Human) Transformational Trends

These are fantastically exciting times for talent and workforce consultants as well, of course. Human capital is increasingly seen as a constraint (one on par with financial capital) on a company's ability to grow and achieve its goals, Schwartz points out. This is the case, in large part, because organizations' continual adoption of technology requires a steady influx of new skills. Data analytics, robotic process automation (RPA), 3-D printing, artificial intelligence (AI) and other advancements are also rewiring existing business processes.

"Clearly, these massive changes create many workforce challenges—and opportunities," notes Volini. "In a significant departure from what we've known as the norm, it's now very difficult—if not impossible—to accurately predict the skills workers will need in the near-term, let alone the long-term to transform digitally, adopt advanced technologies, and change how we work in concert with those enabling tools. Career models, learning, organizational design, and workforce planning all must be rethought in the new norm of rapid change and technological advances."

Despite the difficulty of forecasting future skills needs, more CHRO's are being called upon to do so; that requirement features prominently among a handful of new realities and trends that emerge as HR consultants frame client challenges: 

1. CHROs have their seat at the table: "We sometimes call this the golden age of HR," McAndrew says, because HR challenges and strategic business challenges are converging. Thriving in their new role requires HR leaders to look ahead more frequently and further into the future. Nearly all CHROs are focused on the talent their organizations will need in the next six to 12 months. The most effective HR executives are also looking three, five and 10 years down the road to project looming talent needs, assess the current talent pool and develop plans for filling gaps, Schwartz notes. 

2. New talent management thinking and practices are on the way. Speed now marks one of the CHRO's biggest challenges. The pace of technology introduction—and perhaps, even more so, technology obsolescence—is exceeding the process by which the skills to use that technology are acquired and developed through traditional modes. Companies want help figuring out new places to source, hire, train and even share a growing number of talent segments and skill sets. "It's not just build, buy or borrow talent," McAndrew says. "Now it's build, buy, borrow, 'bot or boot talent."

3. Retraining is giving way to retooling. While RPA and other advanced technologies will result in significant job losses over time, the "booting" McAndrew and her peers focus on relates to the challenge of assigning higher-value work to employees and teams as robots take over greater portions (the repetitive aspects) of their current roles. "The issue is still talent," Benson explains, "but the focus is shifting from just recruitment and retention to continuous upskilling… the challenge is continuous reskilling at scale."

4. Improvements to organizational culture, diversity and inclusion, and the employee experience drive business value. It is fair to say that these areas have traditionally received uneven attention and spotty funding in many companies. While lip service was often paid to their importance, these topics tended to move up priority lists only after a highly publicized ethical or behavioral lapse. Consultants say this is changing due to business reasons. All of these areas help attract, retain, and develop highly skilled, adaptable, intelligent talent. When HR consultants talk about the employee experience today, they sound more than a little like marketing consultants promoting the virtues of mapping the customer journey and managing the customer experience. This need will grow as more dramatic changes buffet workforces that are already feeling "change fatigue" during the early days of a technology revolution that will play out over decades. 

5. Societal issues loom. As the adoption of advanced automation progresses, more pressure—to swiftly produce new skills—will be placed on existing educational systems. Tech companies have already taken a page from manufacturers and forged new relationships with some community colleges that are being reconfigured as tech-talent "incubators." More of this type of thinking and innovation is needed. Plus, companies, and perhaps entire industries, may need help developing new methods for managing the process and impacts of large-scale layoffs concentrated in certain segments or geographic areas.

Client Collaborations Involve Strategy, Agility and Diversity 

The work HR consultants are currently conducting with clients addresses the aforementioned issues. Some consultants group client requests into two large buckets: organizational transformation and the transformation of the HR function itself. Other HR consulting leaders divide client requests into the categories of talent management, employee experience and the HR function. Regardless of their organizing principles, consultants describe a high demand for consulting expertise in the following areas:

Human Capital Strategy

The phrase "rethinking" crops up frequently when HR consultants discuss client requests. "We are doing so much more work around comprehensive workforce strategies," Duarte reports. CHROs need to project what human capital their organizations will need three to five years down the road, assess what they have now and then figure out how to fill those gaps between those current and future states. 

HR leaders want to know "what the workforce of the future is going to look like," notes Sardone. Addressing this question sparks more planning questions related to talent management, training and retraining activities, recruiting and the way the employee experience is managed. Each of those topics also represents common drivers of consulting collaborations. 

Talent Management

Enterprise adoption of advanced technology is disrupting nearly every facet of talent management, including: what skills are needed, where talent is sourced from, the types and methods of training and development that the company delivers, how future leaders are groomed, how diversity and inclusion is addressed, how the employee experience is  managed and more. 

This is multifaceted work, to be sure. Addressing one skill set need can set off a ripple effect of challenges affecting other groups of employees. Consider the compensation premiums that data scientists, programmers and AI experts currently command. Companies need to think carefully about how they can attract those highly paid superstars without causing rumblings throughout the rest of the talent base, Schwartz suggests, asking, "How do you maintain a cohesive culture when you need some of those stars?" 

Additionally, as older workers remain in the workforce, "HR needs to find ways to continue to incentivize and challenge those workers that are waiting on movement for promotion or affordability," notes Michael DiClaudio, KPMG principal and the HR advisory lead in his firm's people and change practice. 

Training and Retooling 

Benson points out that talent management's traditional focal points of recruiting and retention are shifting to "continuous upskilling" due to the accelerating pace of technology change within organizations. While AI, RPA and other forms of advanced technology promise major business benefits, they also raise daunting training questions, Benson points out: How do you reskill thousands or tens of thousands of workers? How do you create a continuous learning culture where the norm is to change and grow? How do you enable that learning culture with the right content and delivery?  

Sardone and her group are helping clients develop "continuous learning" capabilities. "Organizations are trying to figure out how to create an environment of continuous learning without the significant cost and disruption of sending someone back to school," she says. "Not a lot of companies have successfully deployed this, but some of the largest organizations are starting to get there."

In addition to retraining teams, HR functions need to think about reconfiguring roles. "Reskilling is the initial hurdle," DiClaudio notes, "followed quickly by redefining jobs and organizational structures. As technologies evolve faster, these skills—reskilling and redefining—will be critical, and possibly become the most important role HR will have."

Diversity and Inclusion

"Workforce diversity is not a new issue," notes Sharon Whittle, a principal in Grant Thornton's human capital services practice, "but it remains a top concern." It is also an evolving issue, according to Whittle and other HR consulting veterans. Diversity and inclusion activities are increasingly viewed as important enablers of productivity, improvements to organizational culture, onboarding speed and effectiveness, and so-called employee-of-choice allure. 

A growing body of empirical evidences suggests that a workforce brimming with diverse perspectives and experiences tends to operate more productively and more innovatively, Schwartz notes. And workplaces in which new employees quickly feel a true sense of belonging tend to achieve those benefits faster. Diversity initiatives can also help open HR teams' eyes to previously overlooked sources of valuable talent. "More companies are asking," Schwartz adds, "Where can we tap into reserves of people we may not have thought about previously, but who may have the skills we really need?"

Employee Experience

One of Whittle's younger Grant Thornton colleagues recently took a 16-month leave from work to travel—an early-career hiatus that was previously unheard of for those who joined the labor market in the 20th Century.  Whittle notes that the internal program reflects how more employers are now aware of, and responding to, "the importance younger members of the workforce place on experiences, flexibility, time off, and the ability to work remotely." More companies, including Grant Thornton, Whittle adds, "have adopted policies allowing employees to take time off as needed, which enables them to return to work refreshed, with better ideas and solutions. These less-tangible assets are driving more engagement than the traditional rewards path." 

Investments in employee experience are being driven by recruitment and retention objectives as well as by evidence that an engaged workforce is a productive and innovative workforce. But employee engagement remains a tricky issue given that different individuals and generations seek out different work experiences. The rapid introduction of technology also poses new challenges to the employee experience. As Benson notes, "digital has its moments of being dehumanizing." She mentions recent research indicating that millennials would actually prefer to deal with a bot or machine, rather than a person, for most interactions. 

"The challenge in that environment is how to actually engage employees," Benson continues. "Customer experience and customer engagement have been the focus of billions of investment dollars over the past decade. What I see emerging is that same level of interest and investment in employee experience – whether in terms of study, technological enablement, human-centric processes and policies, design-led solutioning and other approaches designed to put the employee at the center of the processes, technology and policies and facilities that comprise his/her work environment."

HR Operates on Itself 

That list of in-demand services neglects a major chunk of consulting work: the transformation of the HR function itself. 

The top CHRO concerns HR Strategy Group CEO Amy Polefrone identifies all relate to HR transformation. She points out that rising HR leaders still need to be groomed as strategic business partners, legacy HR technology still needs to be replaced, and more quantifiable measures of HR performance need to be developed, Polefrone notes. Consulting leaders at the largest HR firms agree. CHROs are assessing the changes they need to make to their own talent, processes, relationships and technology to "create more agile HR functions," McAndrew emphasizes.

Updating legacy HR technology plays a central role in HR transformation because these tools can serve double duty by enabling HR teams to devoting more time to higher-value activities and by strengthening the employee experience, talent management, continuous training efforts and more. 

Sardone reports that Mercer is conducting "a tremendous amount of work related to HR's digital transformation—helping clients perform technical deployments of HR systems and then assisting with change management and numerous other elements of HR transformation." Some clients need help deploying digital tools to enhance the employee experience and talent management. Others are asking Sardone's team for help making fundamental changes to the function's organization structure. 

HR consultants assert that more than enough advanced HR technologies, including AI tools, are available. The trick comes in implementing them and, more so, rewiring HR processes, business process, HR relationships, HR roles and HR skill sets in a way that optimizes the advanced technology's positive impacts.  This "abundance of HR technologies is really changing how HR does business," Polefrone adds. "There is an app for every function in HR."

Start Slowly?

As enterprise digital transformation progresses with the considerable help of HR functions undergoing their own transformation, one key to success sounds extremely counterintuitive: slow down. 

PwC's work with HR functions has shown Duarte that it is important to invest sufficient time in the thinking and preparation needed to lay a solid foundation for all of the changes likely to unfold during the next five years. One of many ways to lay this groundwork, she says, is to start by identifying the organization's purpose. A clearly articulated purpose, she adds, can serve as a shared beacon to guide a rapidly changing and fatigued workforce—including HR employees—through the historic disruptions that lie ahead.

HR Consulting's Growing Technology Focus: Q&A with Infosys Consulting's Holly Benson

Infosys Consulting Vice President and Partner Holly Benson writes and speaks on the future of work for numerous outlets, including the World Economic Forum. A former petroleum geologist (true fact: she owns a mineral and fossil gallery and a coffee bar in Taos), Benson took a break from her consulting and writing to weigh in on the need for continuous upskilling, digital transformation's global impact on HR capabilities, and why she expects the link between core HR consulting and technology to intensify.

Consulting: What are the top concerns of chief HR officers today? 

Benson: The issue is still talent, but the focus is shifting from just recruitment and retention to continuous upskilling. With the pace of technology change continuing to accelerate, and with automation and AI both creating tremendous opportunities and putting pressure on conventional work forces, the challenge is continuous reskilling at scale. How do you reskill thousands or tens of thousands of workers? How do you create a continuous learning culture where the norm is to change and grow? How do you enable that learning culture with the right content and delivery?

Consulting: What forces are fundamentally re-shaping talent and workforce management practices? 

Benson:  Automation and AI are mature in HR now. Uptake has been slow; industry capability vastly outstrips actual usage. But the tools and abilities are there, from automating basic transactional functions for increased efficiency, to providing better AI-enabled data for management decision-making, to enabling sophisticated self-service applications for employees themselves. This isn't just about automation of application processes or benefits enrollment – but rather robust, end-to-end management of careers or workforce planning. "Given my position today, what opportunities are open to me, how successful have others been in making that jump, what skills do I need to improve my chances, what training and certifications are available to me to improve my chances?" Or, from the employer's perspective, "What makes employees successful in this organization and career stream, what specific skills and competencies should I be looking for, how can I use AI and automation to better recognize those attributes in applicants to improve my efficiency and improve my hit rate?"

Consulting: How do the HR challenges that US companies confront compare to the challenges faced by companies in other regions?

Benson: Globalization and technology are blurring regional distinctions at this point. Digital is universal. The need for learning is universal. The opportunities of AI and automation are universal. One might think things like progress on diversity exhibit regional differences – but if they do, it's often in the opposite direction of what one might expect. Developed nations have more deeply entrenched workplace structures; they possess a certain inertia. Developing nations are playing a whole new game that challenges conventional thinking. For example, does developing code really require a college degree?  Or can we teach village women in rural areas how to code, and allow them to join the digital economy as virtual workers? Experiments like this are happening in Africa, Asia and Latin America. Digital is a great leveler of preconceptions.

Consulting: What types of collaborations illustrate the nature of HR help clients are requesting? 

Benson: Projects range from HR strategy, to technological enablement of the HR function, to enablement of self-service talent management and career management capabilities, to OE/OD work focused on changing cultures and leadership skills. We recently helped a major oil company entirely redesign its onboarding experience. We're helping a global bank define agile leadership skills and prepare its executives for business agility. We're helping a large North American retail firm uplift its core HR processes and systems via implementation of cloud-based software. We helped a global software manufacturer define a strategic roadmap to achieve and enable a pervasive learning culture.

Consulting: How do you expect your firm's talent/workforce consulting to change within the next five years? 

Benson: We expect the linkage between core HR consulting and technology to intensify. We also expect the technological focus to shift from ERP to digital and automation/AI solutions. Either we're going to be helping clients install digital and AI-led solutions for HR processes and activities, or we're going to be helping them prepare their leaders and workforces to work in an increasingly digital world. We also expect to be doing a lot more with design, devising process and technology solutions for HR leaders that enhance the employee experience in order to give them a leg up on talent attraction and retention.                   —E.K.