Canadian Leaders Not Prepared for Disruption: Organizational design needs to be the top priority, Deloitte report

Toronto, ON May 12, 2016 – Canadian business leaders recognize that the structure of the workplace needs to be redesigned in order to address four powerful forces that are driving unstoppable change in business: demographic upheavals, the rise of digital technology, rapid innovation in business models and the evolving relationship between employers and employees. Yet Deloitte’s report, Human Capital Trends 2016: Out of sync?, shows that just 48 per cent of Canadian respondents feel their organization is capable of addressing the challenges of organizational design.

“Globally, it is time for a new organizational design that responds to both the pace of disruption and changing expectations of employees,” said Heather Stockton, Partner and National Human Capital Leader at Deloitte. “But organizational design isn’t only an HR issue. The entire organization must embrace the need to sense and respond to market shifts by taking action now if they’re to successfully attract and retain talent to keep up with their peers worldwide.”

Delaying change leaves organizations open to disruption and intense competition. According to Deloitte, organizations need to rethink their talent models, treat employees as customers and leverage newer digital talent experiences to sharpen their competitive edge. By taking these steps, organizations will improve engagement, strengthen culture and develop the leaders they need.

A concerning and persistent perception gap may also explain the difficulty Canadian organizations are experiencing causing tradition to prevail and change to be slow. Deloitte’s research indicates that Canadian leaders and employees too often see HR issues in vastly different ways. For example, 54 percent of executive respondents believe their organizations are equipped to deal with engagement issues, yet only 37 percent of non-executive respondents agree. This perception gap is widespread, impacting all facets of HR, including culture and leadership.

“Leadership and employee respondents consistently demonstrate quite different views around human capital trends and their organization’s capabilities,” said Jeff Moir, Partner and Toronto Human Capital Leader. “With increased understanding of the competition and technology disruption combined with a sense of urgency, Canadian leaders will be better able to identify these perception gaps, and compete.”

Deloitte’s 2016 human capital trends survey explores the leading talent challenges facing organizations today, and companies’ capacity to deal with these challenges. Business and HR leaders from 130 countries were surveyed. This report, on Canadian trends, is based on the responses of 196 Canadian leaders that took part in the global survey.

Top four challenges facing Canadian leaders, identified in Deloitte’s 2016 Human Capital Trends survey:

1.  Engagement: Harder than ever?
Canadian Respondents identified engagement as the most important issue (91 percent) and yet respondents feel it is increasingly difficult. Fifty-eight percent say their organization isn’t ready to deal with engagement issues, compared to 50 percent last year. Engagement powers an organization’s success and helps leaders anticipate future workplace issues, gain insight into customer service, and gauge employees’ support for change.

2.  Culture: Do we expect too much?
Culture is among the most important priorities for Canadians (90 percent) and viewed as a strong competitive advantage for companies. Yet with a diverse workforce comes many different cultures. The C-suite and HR leaders must develop a strategy to communicate their vision to a diverse workforce and regularly check in with employees to ensure it is taking hold.

3.  Leadership awakened…or not?
Leadership remains a top 3 major concern for Canadians. 90 percent of respondents feel that leadership needs to improve in order to produce leaders that can keep up with the current pace of change. However, respondents say their organizations’ ability to develop leaders is in sharp decline, with only 40 percent of respondents feeling their organizations are prepared to tackle leadership challenges, down 27 percent from last year. Investments are needed in leadership programs that meet the organization’s long term objectives, and focus on developing the “hard skills” of leadership.

4.  Designing our organizations: An overlooked opportunity?
Only 48 percent of Canadian respondents feel their organization is capable of addressing the challenges of organizational design. Many Canadian companies are trying to figure out how to design themselves to use their people’s talents and skills more efficiently, but they struggle when it comes to actually changing the design and the work itself.

The full report and additional resources related to these findings are available at: www.deloitte.ca/hctrends

About Deloitte
Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited.

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