Deloitte 2021 Global Human Capital Trends Report
In wake of COVID-19, 61% and 63% of executives in the world and in Ukraine respectively, now focused on transforming work, double pre-pandemic levels
Executives focus on re-architecting work by optimizing human potential through designing work around workers’ strengths
Amid unprecedented workforce disruption from the COVID-19 pandemic, organizations are enacting radically new ways of working and operating – and the C-suite is taking action to reimagine the future of work with human capital issues at the top of their agenda. Executives are shifting preparedness strategies from planning for the familiar and are instead synchronizing across the C-suite to develop human-centric strategies that allow organizations to better adapt to ongoing disruption.
Deloitte’s 2021 Global Human Capital Trends report, "The social enterprise in a world disrupted," examines how organizations and leaders can leverage the lessons of this pandemic to fundamentally reimagine work, shifting from a focus on surviving to the pursuit of thriving.
Completed by more than 3,600 executives in 96 countries, Deloitte's Global Human Capital Trends report included responses from more than 1,200 C-suite executives and board members. Ukraine ranked 6th in the world in the number of respondents, attracting more than 200 respondents, including about 150 business leaders. For the first time in the report’s 11-year history, business respondents (56%), including 233 CEOs, outnumbered HR respondents (44%) in the survey – underscoring the growing importance of human capital in organizational decision-making.
Reimagining preparedness and workforce potential
The report shows that human capital issues are at the center of leaders’ thinking as they shift organizational views on preparedness. In the 2021 report, 17% of executives said that their organizations would focus on planning for unlikely, high-impact events moving forward, as opposed to just 6% before the pandemic. Interestingly, the percentage of Ukrainian company leaders who leveraged the lessons of pandemic to plan preparedness for such events in the future, has remained almost invariably low (6%). Nearly half (47%) of executives in the world and in Ukraine said that their organizations planned to focus on multiple scenarios, notably up from 23% and 25% respectively before the pandemic. To effectively deal with multiple possible futures and unlikely events, the importance of real-time workforce insights and data as they set new directions has become even more critical.
However, the most important factor in making that preparedness shift is unleashing worker potential through a new focus on capabilities. Almost three-quarters (72%) of executives in the world and two-thirds (63%) in Ukraine identified “the ability of their people to adapt, reskill and assume new roles” as a priority for navigating future disruptions. However, only 17% of these same executives in the world and 11% in Ukraine said that their organization was “very ready” to adapt and reskill workers to assume new roles, pointing to a substantial disconnect between leaders’ priorities and the reality of how their organizations support workforce development.
“The COVID-19 pandemic revealed the resilience of the workforce. When workers were asked to expand their roles to accomplish whatever was needed, they rose to the challenge,” said Erica Volini, principal and global human capital leader, Deloitte Consulting LLP. “No longer are human capital issues relegated to HR. Amid disruptions, organizations either sink or swim based on their workforce’s capabilities like collaboration, creativity, judgment and flexibility. It’s clear that workforce and human-centric matters are top priorities for C-suite and board leaders.”
“Moreover, only a small proportion of executives – 16% in the world and 13% in Ukraine – noted that during COVID-19 HR makes a positive impact on building workforce skills and capabilities. On the one hand, this can be explained by the fact that HR had a number of other priorities on their agenda, including protection of the workers’ health and safety. However, by ignoring the need to focus on employees’ learning and development today, the companies are reducing their chances of achieving success in the future,” said Olena Boichenko, Director of Human Capital Advisory Services at Deloitte Ukraine.
C-suite collaboration is critical to set new workforce direction
HR is beginning to embrace the new critical role of re-architecting work and setting a new direction for the workforce itself. Due to HR’s adept handling of COVID-19’s challenges, the percentage of HR executives who are very confident in the department’s ability to navigate future changes in the next three to five years has doubled from 1 in 8 in 2019 to nearly 1 in 4 in 2020. Among business executives, the proportion that were “not confident” in HR dropped dramatically from 26% in 2019 to 12% in 2020.
With the CHRO at the helm, propelling this level of organizational change requires collaboration and leadership across the entire C-suite. In fact, survey respondents identified leadership as the top factor that drives change. However, as executives of large organizations begin to re-architect work, they have identified some barriers that they will need to overcome, such as too many competing priorities (57% of respondents in the world and 41% in Ukraine), lack of readiness (43% in the world and 71% in Ukraine), lack of future visioning (27% in the world and 12% in Ukraine) and limited financial resources (20% in the world and 23% in Ukraine).
“The global pandemic has brought the best out of many leaders and organizations, as much of the C-suite has demonstrated a level of transparency and empathy almost never seen before,” said Volini. “Continuing to build on this new level of leadership collaboration, capitalizing on uniquely human capabilities, and using real-time data to re-architect work will enable organizations to develop and sustain long-term growth.”
Integrating humans and technology to re-architect work
The report shows that executives are increasingly shifting away from the optimization of automation and moving toward re-thinking how to best integrate humans and technology to complement each other and drive organizations forward. Sixty-one percent of executives in the world and 63% in Ukraine say they plan to focus on reimagining work in the next one to three years, compared to only 29% and 30% respectively before the pandemic. COVID-19 has heightened leaders’ awareness of the potential benefits of this approach, including higher productivity, increased agility, and greater innovation.
During the pandemic, organizations utilized team structures to enable greater adaptability, which allowed them to better survive an unpredictable year. Leaders are increasingly recognizing the value of “superteams,” combinations of people and technologies designed to leverage complementary capabilities and pursue outcomes at a speed and scale that would not otherwise be possible. Executives in this year’s survey recognized that the use of technology and people is not an “either-or” choice, but a “both-and” partnership. The top three factors for transforming work were organizational culture (45% of respondents in the world and 53% in Ukraine), workforce capability (41% in the world and 24% in Ukraine) and technology (35% in the world and 24% in Ukraine) – factors that must all work together for an organization to assemble effective superteams.
Integrating well-being into work
As the lines between work and life blurred even further during COVID-19, leaders moved from prioritizing work-life balance to designing well-being into work – and life – itself. In fact, 69% of executives in the world and 56% in Ukraine reported they implemented policies during COVID-19 designed to empower workers to better integrate their personal and professional lives. Among executives, both in the world and in Ukraine, 7 in 10 said shifts to remote work had a positive impact on well-being.
“Although the top priority of executives, both in Ukraine and the world, for the next three years in the context of transforming work is slightly different (in the world – improving customer experience, and in Ukraine – finding new customers and products), other priority goals are the same, including reducing costs and increasing innovation. However, executives, both in Ukraine and in the world, ranked improving well-being as their second-to-last ranked priority. These results are counter to the expectations of workers themselves, as they ranked improving well-being within their top three priorities. This points to an ongoing debate about how the focus on well-being will be sustained in a post-pandemic world.”
“Organizations that integrate well-being into the design of work at the individual, team and organizational level will build a sustainable future where workers can feel and perform at their best,” said Volini. “The pandemic has shown us that human-centric work strategies are not just a nice-to-have, but a need-to-have. Moving forward, those leaders who address human capital holistically and build business decision-making around human potential will thrive.”