In a period of profound social and technological change, Mercer’s annual Talent Trends report provides a much-needed global perspective on the talent landscape.
Over the past year, they’ve surveyed over 800 executives, 1,600 HR leaders and 4,800 employees across 16 geographies. From these interviews, they’ve produced a report that captures the key trends that HR teams and candidates need to be aware of.
How are business leaders and employees adapting to new technologies, such as AI and machine learning? What do we really want from our working lives? And what are the biggest challenges ahead, for business leaders and their staff?
It’s a fascinating read – but it’s also pretty long. So we’ve rounded up the ten key takeaways that HR teams and candidates need to be aware of.
“The majority of executives are confident that their business is ready to lead disruption in their field “
1 – Executives are feeling bullish about disruption
In Mercer’s 2018 report, a surprisingly low 27% of executives said that they expected significant disruption in their industry over the next three years: disruption such as ‘challenger’ startups entering their industry or new technologies like AI that change the way we work. This year, that number almost tripled, reaching 73%. On top of this, 99% of executives said that they are preparing for the new world of work, and the majority of executives are confident that their business is ready to lead disruption in their field
2 – New roles are being created
In response to this widespread disruption, upskilling and reskilling has rocketed up the executive agenda, from the ninth to the third most important priority. The most in-demand technical skill sets are machine learning, blockchain and deep learning (a subset of machine learning focussing on the use of neural networks).
On top of this, executives believe that the greatest return on talent investment will come from redesigning existing jobs to deliver greater value. By automating simple, repetitive or mundane tasks, businesses can free up staff to focus on more complex and rewarding work. However, HR teams are lagging behind this aspiration, with only 43% of HR leaders redesigning jobs to take advantage of innovative new technologies.
3 – Talent migration is a key concern – with good reason
Executives are twice as concerned about losing their top talent as they were last year. With good reason, as two in five employees said they planned to leave their jobs within the next year. 52% of executives cited the excessive amount of time it takes to find quality candidates as a key frustration when it comes to hiring. And 35% cited poor hiring decisions.
Interestingly, only one in three executives said that they felt that their HR department was effective at dealing with ‘human capital risks’. This can be interpreted as the pressure or stress experienced by staff who are having to adapt to an unfamiliar world of work. This suggests that HR need to do more to help frazzled staff keep up with the rapid pace of change.
4 – Specialist freelancers are replacing more full-time workers
As the world of work becomes increasingly specialised and less predictable, freelancers and consultants on short-term contracts are becoming more attractive. 79% of executives have said that they expect contingent and freelance workers will replace full-time staff over the coming years. Full-time employees are more used to a ‘gig economy’ mindset, with 51% saying they would move into a temporary role in order to gain experience. And 82% said they would be willing to work on a freelance basis. This may be a result of businesses wishing to become more agile. A full-time employee is a big commitment – especially when their skill set may not be that useful in a year’s time. By working with freelancers, businesses can access deep expertise in one area, without committing to a long-term agreement.
5 – AI has finally arrived
After years of hype, AI has arrived in the workplace. More than half of executives expect one in five of their current jobs to be automated over the next few years. And more than half of companies plan to increase their rate of automation in 2019.
This will have a profound effect on our working lives. However, fears that workers will be laid off in droves appear to be unfounded. In fact, The World Economic Forum predicts that AI and machine learning will actually create 58 million net new jobs by 2022.
6 – Employees are surprisingly loyal to their company – but they want a diverse range of rewards in return
As mentioned earlier, two in five members of staff are thinking about leaving their current role in the next year. However, those who are staying put appear to be in it for the long haul. Employees said that they feel a greater sense of loyalty to their company than to their role, industry, department, coworkers or manager. On top of this, job security was cited as the most important reason employees want to stay put.
“HR teams are having to work harder than ever to satisfy staff with a diverse range of rewards.”
This makes building a strong culture and employer brand even more crucial to retaining top talent. Following job security, employers said that the top reasons to stay were health benefits (such as gym membership) and flexible hours. HR teams are having to work harder than ever to satisfy staff with a diverse range of rewards.
7 – Employees get a kick out of collaboration
Thriving employees are twice as likely to describe their role and work environment as ‘relationship focused’ and ‘collaborative’. When asked what HR could do to improve performance, the third most effective strategy was setting goals across teams that promote collaboration, instead of setting goals for individuals.
8 – HR is suffering from a lack of hiring analytics
Only one in four HR leaders is using some kind of analytics in order to analyse their hiring performance. Manual processes were also cited as a source of frustration. Both of these suggest that the hiring process is in need of a technical overhaul. However, HR has made the leap to digital in other ways, with 75% of HR departments saying they use state-of-the-art platforms to deliver their services, and 87% of leaders feeling confident about rolling out new systems.
9 – The hiring experience and first month have long-lasting effects
78% of thriving employees said they had a positive hiring experience compared with just 30% of non-thriving employees. A difficult start in a new role can have long-lasting effects on performance, with employees who had a positive first month being more likely to be engaged, committed and fulfilled up to two years later.
As mentioned previously on our blog, psychometric profiling can be a great way of tailoring the onboarding process to different employees’ needs. It also helps to make sure that they’re getting the support and opportunities they need going forward.
10 – This is the era of the specialist
The need to develop new skills and the increasingly specialised nature of work are separating highly skilled workers from the rank and file. While routine, repetitive and mundane tasks that used to be performed by low-skilled workers are taken on by new technologies, workers with deep, technical expertise and un-automatable skills are more in demand than ever. These individuals are highly sought-after, can easily switch jobs and are happy to do so. As a result, businesses are tailoring their pay, reward packages and even their value propositions to appeal to these high-skill employees.
Whether you’re a candidate or a hiring manager, there’s a lot to feel positive about in this report. Automation is providing us with richer working lives, employees are having more say in how they’re rewarded and there are exciting new roles being created every day. However, there are also risks. Employers and employees alike need to keep up with the pace of change, or they could find themselves falling behind the times.
If you’re looking for more ways to help your top talent shine, check out our post looking at the talent management strategies of the some of the world’s top tech firms.
