Leadership in the Age of Disruption
May 28, 2018
Posted by: CPHR Manitoba
As featured in the Spring 2018 issue of HRmatters
Authored by R. W. Pollock, Chairman & CEO, Drake International
In its 2017 fifth annual Global Human Capital Trends report and survey, Deloitte, a multinational professional services firm, reported: “Organizations face a radically shifting context for the workforce, the workplace, and the world of work. These shifts have changed the rules for nearly every organizational people practice, from learning, to management, to the definition of work itself.” The survey was conducted with more than 10,000 HR and business leaders from across 140 countries.
Deloitte went on to add, “In an age of disruption, business and HR leaders are being pressed to rewrite the rules for how they organize, recruit, develop, manage, and engage the 21st-century workforce.”
Rewriting the rules is today’s reality and the HR function must rise to the challenge. Dealing with issues such as managing virtual workforces, workforce analytics, talent retention, retiring workers, succession planning, and in general, preparing HR for organizations of the future is not an easy task.
In an article from our recent Drake Business Review, written by Bruce Wesner, talks about managing the wave of retiring workers. Wesner states that in the US alone, about 10,000 baby boomers are retiring every day. He said that at many companies, more than 50% of the workforce will be retiring in the next three to five years. The article is a fascinating look at what leaders must think about — right now. Wesner also writes about an unusually complex operational facility that actually turns over its entire workforce, including the president and senior management team, every three years! Intrigued?
When you talk about retiring workers, you must also think about succession planning to replace the vast knowledge and experience that will be walking out your door. Key knowledge exists at all levels within an organization, and knowledge is complex. Succession planning focuses in on the fact that “Planning for the exit of knowledgeable employees is critical to the long-term success and competitiveness of businesses.”
Many companies do not have a plan to manage and transfer knowledge, and yet knowledge transfer is an important part of the succession planning process. Knowledge transfer and succession planning are both critical elements of an organization’s overall talent management strategy. So how to you control and measure the many complex issues in managing your talent?
Workforce analytics is a key element for the HR function. HR data is everywhere within an organization. The challenge is analyzing it. Deloitte referred to “rewriting the rules”, and a good example of this is the importance organizations are placing on analytics. If you attend any HR conference, you will now find data and workforce analytics high on the agenda.
It is always interesting to read statistics on HR issues. The Recruitment and Employment Confederation (REC) in the UK is a not-for-profit organization and the professional body for UK recruitment businesses. They recently researched the cost to businesses of making a bad hire. In their report, Making the Right Hire and the Cost of Getting it Wrong, they stated that employers clearly don’t understand the costs of a bad hire, its damaging impact, and how to avoid it. They go on to say, “This behaviour is putting the success of UK businesses at risk.”
The same can be said for any business around the world. From their interviews and research, REC found that 85% of HR decision makers admit their business made a bad hire. They calculated that a poor hire at a middle management level of £42,000 (or approximately $54,000 US dollars) could end up costing a business £132,015 (or about $170,000 US). Can your business afford a bad hire?
As costly as it is to hire the wrong person, it is also expensive to hang onto the wrong person, in the wrong job, for too long. Many organizations and managers don’t oust a poor performer is because they don’t have a back-up plan.
I’ve spoken about the cost of a bad hire, and hanging onto the wrong person too long. No one wants to hear that their top performers are preparing to bolt. It has been said that nearly 95% of managers make no formal attempt to periodically sit down and systematically identify key team members who are likely to leave. And what is his number one cause for employee turnover? It could be you.
In this age of “disruption” as Deloitte referenced earlier, it will take visionary, strategic, and capable leadership to achieve and sustain outstanding results.
This should your wake-up call. The essence of your business is your people. For an organization to run efficiently and effectively, good leadership must exist at all levels.