Deloitte Insights

2019 Global Human Capital Trends

Leading the social enterprise—Reinvent with a human focus

In 2019, an intensifying combination of economic, social, and political issues is forcing HR and business leaders to learn to lead the social enterprise—and reinvent their organizations around a human focus. Explore this year's trends below.

Introduction: Leading the social enterprise — Reinvent with a human focus

Intensifying economic, social, and political issues are challenging organizations to reinvent themselves as social enterprises, engaging with stakeholders and cultivating performance in a human way.

IN 2019, an intensifying combination of economic, social, and political issues is challenging business strategies. Faced with the relentless acceleration of artificial intelligence (AI), cognitive technologies, and automation, 86 percent of respondents to this year’s Global Human Capital Trends survey believe they must reinvent their ability to learn. After nearly 10 years of economic growth, and despite a pervasive corporate focus on digital transformation, 84 percent of respondents told us they need to rethink their workforce experience to improve productivity. And in the face of new pressures to move faster and adapt to a far more diverse workforce, 80 percent believe they need to develop leaders differently.

Leading the social enterprise

When CEOs were asked to rate their most important measure of success in 2019, the number-one issue they cited was “impact on society, including income inequality, diversity, and the environment,” showing the urgency of this issue


Respondents cited societal impact most often as the top factor used to measure success when evaluating annual performance

But while CEOs have recognized the issue, they certainly haven’t solved for it. That’s because leading a social enterprise is not the equivalent of practicing corporate social responsibility. Nor is it about engaging in social impact programs or defining a purpose or mission statement—though all of these are also important in their own right. Leading a social enterprise is about recognizing that, while businesses must generate a profit and deliver a return to shareholders, they must do so while also improving the lot of workers, customers, and the communities in which we live. And in today’s world, with today’s societal challenges, fulfilling this aim requires reinvention on a broad scale.

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What is a social enterprise?

A social enterprise is an organization whose mission combines revenue growth and profit-making with the need to respect and support its environment and stakeholder network. This includes listening to, investing in, and actively managing the trends that are shaping today’s world. It is an organization that shoulders its responsibility to be a good citizen (both inside and outside the organization), serving as a role model for its peers and promoting a high degree of collaboration at every level of the organization.

Future of the workforce

The alternative workforce

Looking ahead

​Zooming out to take a long-term view of the trends shaping human capital and business can help leaders set priorities for reinvention.

THIS year’s Global Human Capital Trends report argues that, to create value as a social enterprise in today’s dynamic and demanding environment, organizations must reinvent themselves—with a human focus—on three fronts: the workforce, the organization, and HR. The 10 trends we highlight in these areas are of immediate concern to business and HR executives, issues on which leaders are being pushed to act today. But where will they take organizations five or 10 years from now, when the forces now at work have had more time to play out?

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​The alternative workforce can be a long-term solution to tight talent markets—but only if treated strategically.

For many years, people viewed contract, freelance, and gig employment as “alternative work,” options considered supplementary to full-time jobs. Today, this segment of the workforce has gone mainstream, and it needs to be managed strategically. Given growing skills shortages and the low birth rate in many countries, leveraging and managing “alternative” workforces will become essential to business growth in the years ahead.

The breadth of the alternative workforce

Once considered a workforce for information technology (IT) or other technical or repeatable tasks, today alternative workers perform a broad range of activities. In this year’s Global Human Capital Trends study, 33 percent of respondents reported extensively using alternative arrangements for IT, 25 percent for operations, 15 percent for marketing, and 15 percent for research and development (figure 1). One of our pharmaceutical clients outsources all of its research, for example; others outsource product design, development, and support

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Alternative work comes in many shapes and sizes

  • Alternative workforce: Includes contractors, freelance/independent workers, gig, and crowd workers.
  • Freelance/independent workers: Workers who extend the core employee workforce and are typically paid by the hour, day, or other unit of time.
  • Gig workers: Workers paid by the task (or microtask) to complete a specified piece of work.
  • Crowd workers: Workers who compete to participate in a project and are often only paid if they are among the top participants in a competition.

From jobs to superjobs

Looking ahead

​As organizations embrace and adopt robotics and AI, they’re finding that virtually every job can be redesigned—creating new categories of work, including hybrid jobs and “superjobs.”

The use of artificial intelligence (AI), cognitive technologies, and robotics to automate and augment work is on the rise, prompting the redesign of jobs in a growing number of domains. The jobs of today are more machine-powered and data-driven than in the past, and they also require more human skills in problem-solving, communication, interpretation, and design. As machines take over repeatable tasks and the work people do becomes less routine, many jobs will rapidly evolve into what we call “superjobs”—the newest job category that changes the landscape of how organizations think about work.

The evolution of jobs

  • Standard jobs: Roles that perform work using a specified and narrow skill set. Generally organized around repeatable tasks and standard processes.
  • Hybrid jobs: Roles that perform work using a combination of skill sets drawing on both technical and soft skills. Historically, these types of skills have not been combined in the same job.
  • Superjobs: Roles that combine work and responsibilities from multiple traditional jobs, using technology to both augment and broaden the scope of the work performed and involve a more complex set of domain, technical, and human skills.

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The language of automation

  • Automation: Includes robotics, cognitive, and AI.
  • Robotics: Includes physical robots (such as drones and robots used for manufacturing) and robotic process automation (technology that automates highly standardized routines and transactions).
  • Cognitive technologies: Include natural language processing and generation (machines that understand language), and machine learning (pattern recognition).
  • AI: Machines that can make predictions using deep learning, neural networks, and related techniques.

Leadership for the 21st century

Looking ahead

Leaders today face new challenges due to the speed of technological, social, and economic change. Do these new challenges call for a new breed of leaders?

YEAR after year, organizations tell us they struggle to find and develop future-ready leaders. In this year’s Global Human Capital Trends survey, 80 percent of respondents rated leadership a high priority for their organizations, but only 41 percent told us they think their organizations are ready or very ready to meet their leadership requirements.

We see leadership pipelines and development at a crossroads at which organizations must focus on both the traditional and the new. Organizations know that they must develop leaders for perennial leadership skills such as the ability to manage operations, supervise teams, make decisions, prioritize investments, and manage the bottom line. And they know that they must also develop leaders for the capabilities needed for the demands of the rapidly evolving, technology-driven business environment—capabilities such as leading through ambiguity, managing increasing complexity, being tech-savvy, managing changing customer and talent demographics, and handling national and cultural differences.

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In a world of disruptive digital business models, augmented workforces, flattened organizations, and an ongoing shift to team-based work practices, organizations are challenging their leaders to step up and show the way forward. CEOs are being pressured to take a position on social issues; C-suite executives are being asked to work more collaboratively across functions; line leaders must learn to operate in networks of teams. But our research shows that while organizations expect new leadership capabilities, they are still largely promoting traditional models and mindsets—when they should be developing skills and measuring leadership in ways that help leaders effectively navigate greater ambiguity, take charge of rapid change, and engage with external and internal stakeholders.

Future of the organisation

From employee experience to human experience

Looking ahead

What creates a positive, motivating experience at work? Mainly, it's the meaning and growth people find in the work itself—and to improve that, the entire organization has to be involved.

ONE of the biggest challenges we identified this year is the need to improve what is often called the “employee experience.” Eighty-four percent of our survey respondents rated this issue important, and 28 percent identified it as one of the three most urgent issues facing their organization in 2019. It’s hard to question why: MIT research shows that enterprises with a top-quartile employee experience achieve twice the innovation, double the customer satisfaction, and 25 percent higher profits than organizations with a bottom-quartile employee experience.Yet as important as it is, only 9 percent of our respondents believed they were very ready to address this issue, making it a massive priority for organizations around the world.

Unpacking the issue

Over the last five years, issues related to productivity, well-being, overwork, and burnout have grown. The digital, always-on world of work has been challenging for people (as we discussed last year and in 2014), and organizations have become increasingly concerned. And based on the results from our study, it’s clear that those issues have resulted in significant dissatisfaction with the job itself. This year, we found that only 49 percent of respondents believed that their organizations’ workers were satisfied or very satisfied with their job design. Only 42 percent thought that workers were satisfied or very satisfied with day-to-day work practices, only 38 percent said that they were satisfied or very satisfied with work-related tools and technology, and only 38 percent thought that they have enough autonomy to make good decisions

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Organizations are investing in many programs to improve life at work, all focused on improving the day-to-day experience workers have. While there is much that can be done to improve work/life balance, research shows that the most important factor of all is the work itself: making work meaningful and giving people a sense of belonging, trust, and relationship. We believe organizations should move beyond thinking about experience at work in terms of perks, rewards, or support, and focus on job fit, job design, and meaning—for all workers across the enterprise.

Organizational performance

Looking ahead

Hierarchies are being displaced by teams at organizations across industries and geographies. How can senior leaders, HR departments, and rank-and-file workers get teaming “right”?

ONE of the fundamental changes in business today is the steady shift away from hierarchical models of management. Over the past few years, the terms “digital,” “agile,” and “network” have become commonplace. In our 2017 Global Human Capital Trends survey, “building the organization of the future” was the No. 1 trend respondents identified, with 88 percent viewing it as important or very important. Eight percent of this year’s survey respondents told us they now operate almost wholly in teams, with another 23 percent saying that most work is done in teams within a hierarchical framework. And 65 percent of our respondents rated the ability to lead through influence as a requirement for 21st-century leadership, building management models around persuasion.

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The shift from hierarchies to cross-functional teams is well underway. Our data shows that adopting team structures improves organizational performance for those that have made the journey; organizations that have not risk falling further behind. These organizations can look at several ways to drive progress, such as educating leaders on how to operate in cross-functional teams and reconfiguring rewards and performance management to support team performance.


Looking ahead

With wage growth lagging behind inflation, many organizations are turning to noncash perks and programs to help drive worker retention and performance. But perks and pay aren’t what matter the most.

AS organizations compete for talent by touting organizational purpose, the workforce experience, career growth and fulfillment, and a wide variety of development programs, one critical component of the equation has fallen behind: rewards. This year, only 33 percent of respondents to our Global Human Capital Trends survey felt that their organizations were ready or very ready to address this issue, and only 11 percent of respondents believed that their rewards strategy was highly aligned with their organization’s goals (figure 1). Why is this area of business so hard to manage?

Fewer than half of our respondents felt that their rewards strategy was aligned or highly aligned with overall organization goals

First, let’s consider the economy. It has now been 10 years since the global financial crisis, and many economies around the world have recovered. Corporations are reporting record profits, and in the United States, the unemployment rate fell to its lowest level in nearly five decades. Globally, many advanced economies, with a few exceptions, are also seeing unemployment numbers lower than in a decade or more. In 2018, Japan, the United Kingdom, Germany, and others saw their unemployment rates fall to lows not seen in years; and China’s unemployment rate hit 3.8 percent.

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Rewards programs are falling behind both internal and external expectations. For workers, rewards mean more than money. They are looking for personalized rewards that meet their needs—and yet most organizations have been guessing and don’t know what their people want or value. Meanwhile, rising social pressures on organizations, driven in part by disparities in wealth and the gains from economic growth, mean more organizations need to account for how their own pay and rewards systems stack up against broader worker and societal expectations. In the domains of learning, leadership, teams, and career development, rewards have to be adjusted to drive the desired outcomes. There are gaps and growing frustrations across the board.

Future of the HR

Accessing talent

Looking ahead

In today’s world of changing jobs and skills, organizations have an opportunity to take a fresh look at how they approach talent acquisition, exploring new approaches to determining what talent they need—and where and how to find it.

AS the economy continues to grow and unemployment remains low in developed countries, recruitment has become harder than ever. This year, 70 percent of respondents to the Global Human Capital Trends survey cited recruitment as an important issue, and 16 percent told us it was one of the three most urgent issues their organization would face in 2019. Economic data points out the issue: In the summer of 2018, the quit rate in the United States, the percent of employees who leave their jobs each month, rose to 2.4 percent, the highest it has been since 2001.  On an annual basis, this means that more than 25 percent of the US labor force changes jobs each year. Elsewhere, leading economies including Japan, the United Kingdom, Germany, and others saw their unemployment rates fall to lows not seen in decades;  China’s unemployment rate hit 3.8 percent in the fourth quarter of 2018.

Beyond high rates of employee-initiated turnover and lower rates of unemployment, other challenges unique to today also exist. The accelerating adoption of automation is creating intense demand for technical skills that don’t widely exist in today’s workforce. And many employers believe that large numbers of college graduates are missing skills in complex thinking, collaboration, teamwork, and communication. All of these challenges make finding qualified talent particularly difficult (figure 1).

Finding qualified talent is among recruitment’s biggest challenges

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During the last decade of economic expansion, organizations have focused on finding the right talent to drive business growth. But with record-low unemployment rates and skills shortages in many technical areas, recruiting has gotten harder, leading to an escalating war of employment brands, recruitment marketing campaigns, and artificial intelligence (AI)-driven tools to deliver recruiting excellence. In 2019 and 2020, as the economy is likely to slow, we think a new approach is needed. Rather than automatically opening a job requisition when a manager needs a role filled, it’s time to think about how organizations can continuously “access talent” in varying ways: mobilizing internal resources, finding people in the alternative workforce, and strategically leveraging technology to augment sourcing and boost recruiting productivity.

Learning in the flow of life

Looking ahead

In a competitive external talent market, learning is vital to an organization’s ability to obtain needed skills. But to achieve the goal of lifelong learning, it must be embedded into not only the flow of work but the flow of life.

Joint ownership, joint accountability

Just as “DevOps” combined software development and IT operations, “devwork” must also look to shared ownership to enable success. There is a growing view, reflected in our survey, that the responsibility for learning and development should be coowned: between workers and their organizations, between HR and the business, and among organizations, educational institutions, and governments. In our survey, 38 percent of respondents said they felt that L&D and the business should share responsibility for learning; of those who said that learning at their organization was not currently positioned for success, 48 percent said that it should move to being a shared responsibility between L&D and the business.

This shared responsibility does more than create joint ownership; it enables joint accountability for success—an area that our survey suggests remains a significant gap in most organizations. Despite often major investments in learning, many organizations are not linking performance incentives to their learning programs, increasing the risk that their learning investments may go unused and unappreciated. It is sobering in this regard that 55 percent of this year’s survey respondents said that incentives were “not linked at all” to the acquisition of new skills (figure 2), suggesting that ample opportunity exists to create and strengthen this connection. Organizations that put incentives in place to help make sure that managers support learning, and that employees find learning opportunities practical to pursue, are likely to reap benefits both in terms of new skills learned and in terms of encouraging a learning culture.

Incentives are often not linked to the acquisition of new skills

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Learning is the top-rated challenge among 2019’s Global Human Capital Trends. People now rate the “opportunity to learn” as among their top reasons for taking a job,1 and business leaders know that changes in technology, longevity, work practices, and business models have created a tremendous demand for continuous, lifelong development. Leading organizations are taking steps to deliver learning to their people in a more personal way, integrating work and learning more tightly with each other, extending ownership for learning beyond the HR organization, and looking for ways to bring solutions we use in our daily lives into the learning environment at work.

Talent mobility

Looking ahead

An organization’s biggest potential talent source may be its own people. But why do so many organizations find internal talent so hard to access?

AS talent markets get tighter and the world becomes more connected, a major new trend has emerged from our research: the need to improve internal talent mobility to more effectively move people among jobs, projects, and geographies. This year, internal talent mobility has become a C-suite-level topic, with 76 percent of our survey respondents rating it important and 20 percent rating it one of their organization’s three most urgent issues.

It’s not hard to understand why. For many organizations, their biggest potential source of talent is to access the enterprise’s own workforce and internal talent market. Surprisingly, however, that market is often undervalued and even overlooked, and many organizations find it amazingly difficult to access. The sad and maddening reality is that employees generally find it easier to find new—and more attractive—opportunities in another organization than to explore and move to new roles at their current employers.1In this year’s Global Human Capital Trends survey, more than 50 percent of respondents told us that it was easier for employees to find a job outside their organization than inside (figure 1), a situation that leaders would do well to address.

Most respondents believed that it would be easier for an employee to find a new job with another employer than with their current organization

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Organizations have historically focused on external recruiting to find people for new roles, but with growing skill shortages and low unemployment rates, they are now finding that acquisition alone isn’t enough to access the capabilities they need. To fuel growth, organizations need to more effectively tap their current workforce to identify and deploy people with the required skills, capabilities, motivation, and knowledge of the organization, its infrastructure, and its culture. Creating better programs to facilitate internal mobility can pay off in multiple areas: growth, employee engagement, and business performance.

HR cloud

Looking ahead

Cloud-based systems have not been a panacea for HR—but then, they were never intended to be. Instead, they can give organizations a solid foundation for integrating the explosion of new tools that HR software vendors are now developing.

The cloud: Expectations versus reality

One of the biggest HR trends in the last few years has been the adoption of subscription-based cloud systems, which were intended to reduce the need for IT to maintain HR software, provide a more integrated suite of tools, improve data management, improve the user experience, and deliver faster innovation. Organizations have experienced varying degrees of success in each of these areas.

First, many organizations still have a mixed set of HR systems in place. Only 5 percent of this year’s survey respondents told us they have a fully integrated HR cloud platform. Most of the others have some combination of cloud and on-premise software, and 29 percent have no systems at all. Since many organizations are still using and maintaining numerous HR systems, the quality of the user experience and the level of integration have not reached the levels often promised by HCM cloud vendors. Many organizations are using employee engagement layers to improve their solutions’ overall usability and to provide a higher level of technical and functional integration.

Second, most cloud vendors have not been keeping up with rapid business innovation and technological advancements. The average HR department now has more than nine systems of record—up from eight a year ago—demonstrating that organizations continue to buy multiple solutions to meet their needs. A huge proliferation of software by innovative new vendors has appeared in the talent management space, creating a new artificial intelligence (AI)-based talent management market with which many major enterprise resource planning (ERP) vendors are struggling to keep pace. Additionally, the market for, and the technology supporting, robotics and cognitive automation has grown quickly, outpacing the ERP vendors’ product road maps and releases.

Third, cloud vendors have, in some cases, oversold their systems’ capabilities. When we asked respondents to tell us what they expected versus what they realized from the cloud, the results were mixed (figure 1).

Organizations generally expected more then they actually got from their HR cloud systems

As the data in figure 1 shows, the cloud helps organizations consolidate data, create a single user interface, and improve access to data. But it also demonstrates that cloud, in and of itself, has not had a major positive impact on the employee experience, HR operations, or innovation.

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Over the last few years, significant progress has been made in HR’s move to the cloud. But although cloud computing platforms have, in general, been wildly successful, many vendors have had challenges keeping up with innovative talent management practices, driving organizations to adopt best-of-breed solutions to fill the gaps. In addition, many of the organizations adopting cloud-based human capital management (HCM) systems are not placing enough emphasis on complementary transformational activities such as redesigning their operating model, data architecture, and user experience. This is leading to technology implementations that are not delivering their full potential. Nonetheless, cloud-based HCM is establishing a foundation for change and innovation, enabling organizations to shift their energies toward more pressing challenges.

Looking ahead

Looking ahead

​Zooming out to take a long-term view of the trends shaping human capital and business can help leaders set priorities for reinvention.

THIS year’s Global Human Capital Trends report argues that, to create value as a social enterprise in today’s dynamic and demanding environment, organizations must reinvent themselves—with a human focus—on three fronts: the workforce, the organization, and HR. The 10 trends we highlight in these areas are of immediate concern to business and HR executives, issues on which leaders are being pushed to act today. But where will they take organizations five or 10 years from now, when the forces now at work have had more time to play out?

Download the full report

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