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Vidya Srinivasan

Transformative global trends are changing the face of work demanding that businesses reconsider their approach to their employees their teams and their organizations. This is the EY's future of HR podcast series -- it show where we reimagine HR and how it impacts the workforce, workplace and work. In each episode we will meet with subject matter leaders across the EY organization to explore the changes transforming the world today and how organizations can harness the power of technology and strategy to create a new future for HR.

The future of work has left its mark on HR where the function has had to evolve to drive people experience, serve as an innovation hub and deliver value outside the traditional role.

Hi, I'm your host Vidya Srinivasan and I have the pleasure of exploring our vision for the future of HR. I'm joined today by Danny Ferron Andy Lomas and Yoichi Taguchi, our global leaders in HR transformation.

Danny I'm going to jump right into it what is happening that is treating this push for HR to transform?

Danny Ferron

There has been a push for a long time for HR to transform especially in terms of increasing digitalization and the use of technology. But COVID-19 took an already rapidly involving working world and simultaneously upended some trends while celebrating others.

These trends are not new, but many are now combined with additional challenges. The magnitude and speed of this impact has brought the future of HR components to life overnight and there are several factors driving this change including:

Economic uncertainty - HR must operate as a resilience partner to the business planning for external shifts through strategic workforce planning and economic planning and exercising cost containment.

Digitalization - HR must leverage innovation reimagining how it delivers its services harnessing powerful insights and providing people analytics.

Regulatory changes - HR must remain attuned to the varied and volatile government interventions that require greater country level actions without losing global governance.

An agile workforce - HR needs to enable talent liquidity both within HR across operations up skill talent just in time and consider global talent pools as positions become remote.

Virtual work - HR must redefine working flexibility to include remote working accommodations such as workplace health regulations.

Srinivasan

That’s a lot of things going on are there any of the companies need to focus on to help with all the disruption.

Ferron

Of course! We focused on four key imperatives that are the heart of the issues and trends affecting HR leaders and teams today.

First, the concept of accelerating digital - help your team spend more time on what matters; focusing on workforce vitality, workforce strategy, people enablement, and a number of other priorities.

Second, prioritize spend - As HR leaders, we have to re balance our budget. It's absolutely possible to deliver cost savings while expanding services and improving experiences. It's important to unlock capacity, make targeted investments, work differently and prioritized effort around value.

Enhanced value - the people function must work differently to maximize the human value that's essential for long term value creation, focusing on financial, human, consumer and societal value.

And fourth, operate horizontally - today many HR functions operate vertically, meeting that they work in silos without much or any collaboration across the other areas of the business. To deliver experiences at scale the people function in future must work horizontally across the enterprise and consider the me, we and now.

Srinivasan

Let’s dive into that a bit deeper as I want to learn more! Can you walk me through each imperative?

Yoichi Taguchi

Of course - we acknowledge this is a big change. The first imperative around accelerating digital is needed because digital unlocks the capacity trapped in your current service delivery model and enables your team to spend more time on what matters. Right now according to our EY OTH / OCX  assessment data from 2019-2020, People complete ninety percent of HR with the remaining ten percent being completed digitally.

In our vision of the beyond, fifty percent off HR work would be completed by people and the other half completed by the digital people team. This frees up the HR function to focus those unmet needs by being able to offer new people services such as emotional well being, people analytics, culture, development, enablement and so many others.

Srinivasan

This is a concept that completely excites me because removing the transaction workload provides the headroom for HR to focus more on the strategic imperative of the organization. For example, being a purpose and culture ambassador, owning the end to end employee expedience, acting at the performance coach or providing customized learning journeys for key talent. There is a plethora of opportunities. But with the need to prioritize spend, can HR deliver on all these imperatives?

Taguchi

Yes, by prioritizing spend and re-balancing the budget it's so important that companies understand that it is possible to deliver cost savings while still expanding those services we just talked about and improving experiences.

From our EY OTH / OCX  assessment data from 2019-2020 if we look at a company that spends one hundred million US dollars on HR  today the people cost alone averages sixty $66,000,000 US cost savings each year while improving employees experiences at expanding keep people services can amount half or 50% of that HR cost and effort.

It's time to work smarter not harder.

Srinivasan

Wow, to be clear if an organization take this approach, your suggesting an aggregated savings off about twenty to twenty five percent. That is such a strong example I see now why that is so important and it clearly ties into the value HR can provide today for people. Andy, could you explore a bit more on the imperative on enhancing value?

Andy Lomas

Certainly Vidya, so this is all about how people functions must work differently to maximize the human value that is essential for long term value creation.  And in the face of destructive forces changing the working world, organizations need to become much more adaptable to rapid change. They need their people and therefore that people function to be flexible and agile to match. And this points to not only structural change, it also points to the they need to establish trust, team climate, organizational culture and enhancing the right behaviors which is key to long term value strategy.

And we at EY believe this is really important and our EY teams work across the globe to address complex issues of people experience and enablement, and relating to organizational transformation, end to end employee experiences, and employee lifecycles effective talent management and deployment and the mobility. And that's gaining value for evolving and these virtual workforces and hybrid workforces’ forces that we're seeing today. This is all about changing the role of HR all in support of business strategy.

Our purpose is to build a better working world and that’s realized through a new people operating model. One that can evolve with the needs of our client’s business and continually enable that people through adaptive change capabilities. This is how we create long term value through human value.

Srinivasan

So, what you're saying is HR can help drive value in all other areas of the business! How does this tie into operating horizontally? I'm interested to learn a bit more about what this means.

Lomas

Sure, and as Danny said, you know many HR functions are still very silo or vertical in their operations and we see that this clearly needs to change. The people function of the future must work horizontally across the enterprise to deliver experiences at scale. If we look at the corporate functions - all corporate functions and customer facing units across the business need to deliver employee needs more seamlessly and effectively. A helpful way to define this is via three environments we can think about in defining these experiences: the Me, We, and Here.

The Me principal is about individual experiences, defining for personal desires, needs, aspirations and priorities of your people. The Me principles ensure the experiences are personalized, responsive to values and needs, is affirming, fosters pride and makes investment in learning and offers a filling career trajectory. And people's work needs and preferences have changed significantly as a result this pandemic, so the Me aspect is really important to get right.

The We principle is about relationship experiences such as interactions with colleagues or customers and how we collaborate to get work done. The We principles ensure that there's no need to choose between nurturing relationships and driving performance. These principles require that employees must have great manages, enables compelling communication, emphasize cooperation, and contributes to the community and fosters recognition. Again, the relationships across the business have fundamentally changed due to remote working, and much more effort is required to create and maintain effective working relationships.

The Here principle is about the enterprise environment; so, how the physical, social technological and societal aspects of the organization have impacts.

These principles provide a human-centric, safe physical work location that leverages space designed to retain talent. They align the work location footprint to enhance space, promote a healthy and engaging workplace, provide a holistic technological experience, and have a relentless focus on removing friction and offering respite from some of the monotony of work tasks.    

In the hybrid workplace environment, we see HR’s role in defining and enhancing the network of spaces - with employees - to enable them to be productive and content in where they want to work and where they can work; wherever that may be.

All these principles together driving play into experience and answer questions such as “how do I fit in?” “how do we work?” and “how do we operate?”

Srinivasan

Thanks Andy, that makes a lot of sense. It is clear that people are a driving force and that HR can really enhance business outcomes.

Danny, how can HR functions accommodate and shift to focus on these four imperatives?

Ferron

HR must rebalance their priorities as they make the most of this new normal and rethink their operating model to reflect this. We are envisioning three new core components within the people value chain. The first is the digital people team. We must adopt, innovate and share a suite enabling technology to support and connect the workforce and provide people deep people insights. For years technology has been seen as a tool, or enabler, of the people function. Going forward, technology is a part of the people function. It does work on behalf of managers, employees and HR professionals every day of the year.

Second. The idea of people consultants - they provide strategic guidance and expertise to the business to address the most challenging opportunities in the business environment and provide the people lands while working in agile teams. They are exceptional and collaborating, not just across the domains of HR, but with other functions in the business, to really tackle the most challenging opportunities and challenges in the business strategy.

The third is virtual global business services. This is the engine room of delivering amazing work at speed and scale across the globe. Deliver cross functional service management provides scale while reducing cost through virtually connected global pots.

Srinivasan 

Wow that'd be a big change for the operating model, definitely transformational. So, in summary, it's clear that there's so many reasons HR needs to transform. I'm really excited to hear about the direction this is moving and the new operating model vision you have for HR to accommodate all this disruption. I am really looking forward to diving into each of these new operating models, which will be the focus of our next three podcast beginning with the digital people team.

That’s it for today - thank you to our speakers Danny, Andy, Yoichi, and to you for joining us - and don't forget to tune in next time to learn more about the digital people team and how you can enable technology to support and connect your workforce.

 

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