Shocker! Millennials aren't that different after all when it comes to HR strategy

Profile picture for user slauchlan By Stuart Lauchlan September 11, 2014
Summary:
It’s 2020 and you’re a global enterprise with employees all around the world. How do you manage that workforce? Well, the simple answer is that as things stand, you don't!

[sws_grey_box box_size="690"] SUMMARY - An Oxford Economics study finds that HR is still playing catch-up with the information economy. Plus ca change yada yada yada.  [/sws_grey_box]


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OK so it’s 2020 and you’re a global enterprise with employees all around the world. How do you manage that workforce? Well, the simple answer is that as things stand, you sort of don’t really, for the simple reasons that you don’t have the strategy, culture and tech in place to do so.

That’s the cheery premise of Workforce 2020, a study by Oxford Economics on behalf of SAP SuccessFactors, the findings of which were revealed at the Success Connect conference in Las Vegas. The study involved polling 5,400 employees and executives and interviewing 29 executives in 27 countries.

From this the Oxford Economics has distilled down the main issues facing the digital enterprise of 2020. These are:

A need to focus on competitive compensation, cited by the two thirds of respondents as their top priority. It’s not just a case of money talks either. Retirement plans, flexibility and time-off rank well ahead of amenities such as fitness centers, daycare and a subsidized staff canteen.

Misunderstood Millennials - or rather, we've all misunderstood them and decided they were an exotic new breed of worker. This isn't’ going to go down with the millennial generation, but less than a third of respondents say they’re giving any real thought to their specific needs. There's a generation gap at work here as the executive class don’t reckon to understand what the young ‘uns are after. In fact, while there have been millions of words written about how different the Millennial is, in reality they’re remarkably similar to everyone else: they want decent compensation, they’re no more likely to quit their jobs in six months than anyone else and they just want a decent work/life balance. They are however a more tech savvy generation, which is worth remembering for the next point.

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Source: Oxford Economics

A growing talent gap that’s getting wider with more than half of employees surveyed feeling that their company provides inadequate training on technology, despite an acceptance that demand for skills like analytics and programming/development will grow sizeably over the next three years. Worse, less than one-third say their company makes the latest technology available to them.

Lack of leadership is to blame for all all this, with executives citing lack of access to strong leaders as the number two impediment to achieving their goals of building a workforce to meet future business objectives. Under a third of executives interviewed reckon that they would be able to replace a skilled departing employee from within the organization, with most of them believing that their own leaders don’t the skills to manage talent or inspire employees.

Workforce transience over permanence as the emergence of the ‘as a service’ economy leads to organizations tapping into freelance external contractors and resources to plug gaps and deliver ‘as needed’ skills. This clearly impacts on the nature of the workforce which becomes more fluid and less permanent. This one isn’t going to change though as 83% of executives state they plan to use more and more ‘consulting employees’.

future of work
Source: Oxford Economics

Finally, HR is still playing catch up with the information economy. The report comments:

One big problem is a lack of metrics and tools, which holds HR back from developing strategies for building the workforce of the future. While more than half of executives say workforce development is a key differentiator for their firms, they do not have the technology and organization to back it up. Just 38% say they have ample data about the workforce to understand their strengths and potential vulnerabilities from a skills perspective, and 39% say they use quantifiable metrics and benchmarking as part of their workforce development strategy. And even when data is available, many companies have difficulty turning it into information: Only 42% say they know how to extract meaningful insights from the data available to them.

To make matters worse, HR hasn’t told the C-suite it’s not coping too well on the tech front and so their own bosses assume everything’s on track:

C-suite executives, meanwhile, seem out of touch with these problems and assume that HR is making its way into the information economy—they are more likely than HR executives to say their firms use quantifiable metrics and benchmarking as part of workforce development strategy.

So, from all this, what emerges are some calls to action. Among respondents:

  • 46% reckon they will require changes in compensation plans.
  • 45% say they will require increased investment in training.
  • 39% say they will result in changes to technology policies to support mobility, BYOD etc.
  • 41% say they will drive new investments in HR technology that can better support their changing strategies and needs.

Edward Cone, managing editor of Thought Leadership at Oxford Economics, reckons this should be a wake-up call:

To gain advantage in the future, businesses must understand the workforce of tomorrow and its importance to bottom-line success — today. Our research shows that the C-suite is out of touch with HR on business strategy and priorities, and workers are not getting what they want from their employers in terms of incentives, benefits and training.

My take

Nothing too surprising in there, but the ‘Millennials aren’t that different after all’ meme is refreshing.

As for the rest, HR doesn’t get the tech it needs/HR doesn’t use the tech it’s given properly, are familiar themes and it’s rather depressing that they’re still coming around in such studies.

We've also heard those calls to action before as well, particularly the one about investing in better technology. What's sad to see is that despite the essentially downbeat nature of the study and the depressing nature of its conclusions, no single call to action has the support of a majority of respondents.

All of which means? Well, see you next time around for more of the same!

 

Disclosure: at time of writing, SAP is a premium partner of diginomica.