Deloitte Study: While Most Business Leaders Believe the Right Workplace Model is Key to Success, only 24% are Very Ready to Make Needed Changes

BANDAR SERI BEGAWAN, 26 January 2023 - Nearly three years after the pandemic, business leaders still face a slew of global, economic and societal changes, all impacting work and workers at a blistering pace. Deloitte's “2023 Global Human Capital Trends” report, "New Fundamentals for a Boundaryless World", examines how leaders are managing these challenges and how their organizations may succeed in a constantly evolving environment if they evolve with it.

Overall, respondents to the study, which include more than 1,500 C-suite executives and board members, recognize the boundaries that have traditionally governed the rules of work — the way jobs are organized, where work happens, and who qualifies for specific roles — are falling away. However, while many understand the need for new fundamentals in today's world of work — 87% say finding the right workplace model is important to their organization's success — only 24% feel their organizations are very ready to address this trend. In the near term, 59% of respondents report focusing on the next steps for reimagining their workforce models. Their dedication indicates they see great potential for reward in a new approach toward work, workers and the workplace. However, survey respondents ranked leadership among the top barriers for seven of the nine trends explored in the report showing there is still much work ahead collectively for organizations to evolve for future success.

"Workforce, organizational and HR priorities remain at the top of board and C-suite agendas. This year's ‘Global Human Capital Trends’ insights reinforce the continued prioritization that we have seen for over a decade of this research. The opportunities for leaders and their teams across all industries are boundaryless and open new frontiers in the relationships of workers, customers, stakeholders and leaders," said Art MAZOR, principal and global human capital practice leader, Deloitte Consulting LLP.

Reimagining work: The end of jobs

Even though work today is primarily defined by jobs and descriptions of specific tasks, many see this as an outdated notion. According to Deloitte's skills-based organization survey, only 19% of executives and 23% of workers say work is best structured that way. This reflects what many are already seeing in their workplaces, with 63% of executives reporting that workers are focused on team and project work outside their current job descriptions.

"While jobs remain the primary way we define work, they are not the only way. Strict job definitions can limit workers' and organizations' ability to be agile and innovate in the face of disruption," said Michael GRIFFITHS, principal and lead for Deloitte Consulting LLP’s learning consulting practice. "By moving to a skills-based approach, these organizations can unlock their workforce's full potential and create a workplace where people have more choice, growth and autonomy in their careers."

With this changing idea of what makes teams most effective, organizations are seeking ways to change the work and how it is organized and inclusively accessible. For example, 93% of the respondents to the trends survey said moving away from a focus on jobs is important or very important to their organization's success. Yet only 20% believe their organization is very ready to tackle the challenge, representing the largest readiness gap of all trends surveyed. Should organizations decide to urgently address this gap, additional benefits of transitioning away from jobs include unleashing worker potential to drive tremendous value, making their teams more likely to innovate and improve processes to maximize efficiency.

"Organizations around the world are seizing the opportunity to elevate skills well beyond 'functional' or 'technical,' they are focusing on building the critical workforce capabilities that will enable their people to navigate near-constant change and disruption," said Kate SWEENY, human capital practice leader, Deloitte U.K.

Reimagining workforce: Worker agency is key

In today's online and interconnected world, public awareness of corporate America's impact on society is playing an ever-growing role in workers' decisions on where to work. For example, 2 in 5 Gen Z and millennial respondents to a Deloitte survey have rejected a job or assignment because it did not align with their values. By contrast, organizations who commit to a clear purpose or mission see notable benefits — half of the executives surveyed in the trends report saw increased worker retention and well-being.

"Workers today have more influence than ever before and have demonstrated a willingness to use it to shape the work their organizations take on, as well as how they do it," said Steve HATFIELD, principal and global future of work leader, Deloitte Consulting LLP. "To be successful in this new world of work, organizations must abandon the idea of complete control and co-create with workers to shape the new rules and boundaries that will define how they operate."

This includes rethinking the boundaries which dictate the access to and the use of worker data, which 83% of executives believe is important for their organization's success. According to the trends report, 61% of organizations describe their data ownership as either “shared” or “worker-owned,” a notable departure from traditional data models characterized by organizational control.

Reimagining the workplace: Designing work for a boundaryless world

As worker agency grows and technology accelerates, organizations should challenge the idea of workplaces only being physical locations. It's a concept that has been under pressure for some time, with digital work access growing in popularity even before the pandemic. While only 15% of respondents agree that the way work is designed is one of the most important attributes for creating the future of the workplace, other factors point to how crucial it can be. Additionally, respondents indicate that increased worker engagement and well-being are among the most significant benefits they've seen from a future workplace approach.

"Many workers now consider the ability to determine where they complete their work — whether in the office, at home, or elsewhere — to be an inalienable right," said Maren HAUPTMANN, human capital leader, Deloitte Germany. "They see this as one of the best opportunities to co-create the future of work with their organization's leaders and to see those statements of trust in action."

This evolution of the workplace calls on leaders to evolve with their workforces, as evidenced by 94% of respondents who believe leadership capabilities and effectiveness are important to their organization's success, the highest importance score across all trends. However, only 23% believe their leaders have the capabilities to navigate today's disruptions. This leadership gap is likely due to looking at work and workers through an outdated lens. Nearly half of respondents say their organization's leaders are overwhelmed by disruptions and struggling to identify what they should prioritize.

"Rather than worrying about finding the perfect place to start, organizations should reframe disruptions as business challenges they can use to experiment and learn from," Kraig EATON, a principal with Deloitte Consulting LLP’s HR transformation practice. "Working alongside their employees to develop these rules, organizations can ensure that well-being is at the heart of these changes, creating better outcomes for both the business and humans."

“Mirroring the global results, ‘Leading in a boundaryless world’ is also one of the most critical factors impacting countries in Southeast Asia. Here, we are seeing businesses across all sectors being forced to respond to continued disruption. Only organizations that are ready to pivot now to redefine work outcomes, implement systems to harness skills and experiences and understand their future skill requirements can transition into a state where they thrive on disruption. Importing this talent into Southeast Asia is unsustainable; we need to identify and incubate to build future ready leaders now!” said Mark MACLEAN, HR Transformation Leader, Deloitte Southeast Asia.

Methodology

The insights gathered for this report leverage Deloitte's scenario planning methodology and are fueled by research findings from a combination of social media polling, live survey polling, AI-enabled focus groups, and interviews with business and HR executives across industries and — for the first-time in the 11-year history of Deloitte's “Global Human Capital Trends” report — hundreds of workers from all over the world.

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