Leading Employers Navigate Uncertainty With Amplified Focus on the Health, Financial Wellbeing and Careers of Their Employees, New Mercer Study Finds
Mercer’s 2020 Global Talent Trends study identifies four trends for employers to “win with empathy” in an environment that is driving rapid change in the way we work
NEW YORK–(BUSINESS WIRE)–The COVID-19 pandemic and subsequent uncertainty are accelerating changes in the ways organizations around the world are working and will continue to work into the future. Particularly in challenging times, leading employers are focusing on their workforce, specifically fostering healthy lifestyles, supporting financial wellness, and providing skills and training as careers change due to AI and technology developments. The reasoning is clear: According to Mercer’s 2020 Global Talent Trends study, 34% of employees expect their jobs to be replaced in three years, 61% of employees believe their employers are preparing them for the future of work and 55% trust their organization to reskill them if their job changes as a result of automation. As employers transform to tackle these matters, they should reconsider their company’s purpose and their responsibilities to employees and employees’ future earnings, since 63% of HR leaders predict stagnant wage growth. And, they need to do so while facing unforeseen challenges like COVID-19 and a likely economic softening that could impact the adoption of new workforce strategies.
“Balancing economics and empathy in all people decisions is important, even more so now as we face questions, concerns and the uncertainty of a global pandemic. Organizations need to have a financial model and cultural mindset that enables them to prepare for and invest in the future,” said Ilya Bonic, President, Career and Head of Strategy at Mercer. “This rethinking of purpose and priorities is vital across the organization, but especially for HR. The findings from this year’s study make it clear that transformation of the HR function is a key component to creating a sustainable organization.”
Mercer’s study identifies four trends for 2020:
Focus on Futures: Work together to ensure people thrive now and in the future. With a new mandate for business, 85% of executives agree that the organization’s purpose should extend beyond shareholder primacy, yet only 35% of companies deliver on this today. Meanwhile, one in three employees say they would prefer to work for an employer that shows responsibility towards all stakeholders, beyond just shareholders and investors. Furthermore, much of an organization’s success depends on whether it can support its talent to grow and shape a sustainable business. This is on the executive agenda – with 68% wanting to focus more on environmental, social and governance (ESG) goals. While 61% of employees trust their employer to prepare them for the future of work, 63% feel at risk of burnout. Career pipelines have tightened as 72% of experienced workers say they plan to work past retirement age, and 55% of Gen Xers say opportunities to advance are limited because of longevity in the workplace. Better management of older workers is part of creating shared value. More than three-quarters (78%) of employees want long-term financial planning, yet just 23% of companies say they provide financial education for employees today. “Each organizational stakeholder has a crutch. For HR it’s technology, for employees it’s trust, and for the C-Suite it’s HR. When those crutches are strong it’s amplifying; when they’re weak it jeopardizes the ability of all stakeholders to create sustainable futures,” said Kate Bravery, Partner and Advisory Solutions & Insight Leader at Mercer.
In most regions, employees’ most valued career support is personal and professional growth opportunities (73%). This is the same for the US (78%), followed by the company has a good sense of employees’ current skills, interests and skill gaps (73%). “To attract and retain talent, companies need to offer and deliver futures with ample and equitable opportunities to grow and develop, health and retirement savings strategies that make a difference in their physical and financial wellness, and a climate of trust born out of collective responsibility for shared futures,” said Ms. Bravery.
Race to Reskill: Transform the workforce by reskilling for a new world economy. Reskilling is the talent investment most capable of driving business success, and 99% of all organizations are embarking on transformation and report significant skill gaps. Workforce capability and lack of future skills was the top reason transformations failed. Although 78% of employees say they are ready to learn new skills, 38% claim they do not have enough time for training. Moreover, just 34% of HR leaders are investing in workforce learning and reskilling as part of their strategy to prepare for the future of work and 40% do not know what skills their workforce has today. “Transformation is not a question of whether to adapt, but about how best to adapt. To stay ahead, organizations need to reskill at scale, with speed and across all generations in their workforce,” said Ms. Bravery.
Across regions, employees say innovation will be the top in-demand skill in the next 12 months. HR leaders in the US agree with their employees. Moreover, in the US, this in-demand skill is followed by digital marketing and customer experience for HR leaders and complex problem solving and advanced interpersonal/relationship skills for employees.
Sense with Science: See ahead by augmenting AI with human intuition. Advances in machine learning continue to permeate across industries and ways of life: Use of predictive analytics has nearly quadrupled in five years (from 10% in 2016 to 39% today). Yet, only 43% of organizations use metrics to identify employees likely to leave, 41% know when critical talent is likely to retire, 18% know the impact of pay strategies on performance, 15% can determine if it is better to buy/build/borrow employees and 12% are using analytics to correct inequities and prevent them recurring. Other forms of employee engagement data gathering are on the rise too; 62% of companies are using pulse surveys today, and 33% plan to invest in this in 2020. While machines outperform humans at tasks related to scale and speed, humans outpace machines at sense-checking and judgement, which are critical elements of ethical decision-making. Yet while 67% of HR leaders are confident they can ensure AI is not institutionalizing bias, ethics codes about the collection, application and implications of people analytics are still in their infancy. Talent assessment is equally an area in which human intuition is needed along with the digital assessments – today only one in two employees (52%) had a positive assessment experience and found it useful. “Companies know more today about human behavior and cognition than ever before. How they gather and act on this information demands a greater focus on moral and equitable ethics,” said Ms. Bravery.
Across regions, disconnects exist between the analytics the C-suite prioritizes and those HR leaders provide. In the US, 62% of HR leaders provide analytics on the C-suite’s top priority as to what are key drivers of engagement in the organization. Yet, only 40% are providing analytics for how different retirement options impact older workers’ behavior, which is also a top priority of the C-suite.
Energize the Experience: Inspire and invigorate people by redesigning their work experience. Delivering on the employee experience is HR’s top priority, and 58% of organizations are redesigning to become more people-centric. Yet, only 27% of executives believe employee experience will yield a business return. And, even though 61% of employees trust their employer to look after their well-being and 48% of executives rank it as a top workforce concern, only 29% of HR leaders have a health and well-being strategy. This is not an area to be missed as employees whose company is focused on employee health and well-being are four times more likely to be energized. Energized employees are essential to realize organizations’ transformation agenda: they are more likely to stay, more resilient, and more ready to reskill. HR transformation is high on organizations’ agenda and delivering on the employee experience requires HR to step out of its functional silos, yet only 40% of HR leaders say they have an integrated people strategy. “Interactions with employees matter, and all interactions from progressive care practices to fair pay to flexible working make up the employee experience,” said Ms. Bravery. “More than twenty years of transforming HR have yielded moderate success. Companies need to upgrade their thinking about what drives people and performance and step away from typical HR models.”
Improving the employee experience tops HR’s future of work priorities in Europe, North America and the Middle East, while Asia and Pacific put transforming talent practices (recruitment, performance management and succession) in the top spot. Other priorities for HR in the US include measuring skills gaps against business objectives, implementing a compelling talent value proposition and developing an integrated people strategy.
The fifth edition of Mercer’s 2020 Global Talent Trends study shares insights from over 7,300 senior business executives, HR leaders and employees, and provides a deep dive into nine key industries and 16 geographies around the world. To download the report, visit here.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.
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