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Rigorous IBM CHRO Study Makes a Powerful Call for Change in HR

We recently got our hands on IBM’s new Global CHRO Study, “Unplug from the past: The Chief Human Resources Officer perspective,” and it’s a report that anyone interested in HR and human capital should peruse carefully. For a variety of reasons, including:

It’s serious, valid research. This isn’t a run-of-the-mill survey report—far from it. The IBM Institute for Business Value, in cooperation with Oxford Economics, interviewed a whopping 2,139 CHROs—179 face-to-face and 1,960 over the phone. Also notable: Peter Cappelli, George W. Taylor Professor of Management at The Wharton School and one of the world’s most respected workplace management thinkers, is a co-author.

The report provides a broad context for better understanding of HR challenges. Research often treats HR as if it’s in a vacuum, but not here. Take the following juxtaposition from the report: While 65 percent of CEOs said they “expect that people skills will have a strong impact on their business over the next several years, and will prompt the creation of new strategies,” only 28 percent of CHROs “expect their enterprise to address changing workforce demographics with new strategies.” Knowing that significant gap between the expectations of CEOs and CHROs helps illustrate the need for change in HR.

The report also doesn’t act as if every organization is the same. IBM developed the following archetypes, for which it offers revealing data comparisons throughout the report:

  • Reinventors—outperformed their peers in both revenue growth and profitability, and lead as well in innovation
  • Practitioners—are ambitious, but haven’t yet developed the capabilities to match their ambitions
  • Aspirationals—have a ways to go, as they are still trying to get the right vision, strategy, execution capabilities and resources in place

Here’s an example of a comparison: 59 percent of CHROs from Reinventors agree to a large extent that their organizations use data and analytics to better understand and address issues related to employee experience, compared to 42% for Practitioners and 35% for Aspirationals.

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The report will inspire thought and action. The report states, “It’s time for HR to take bold steps to foster reinvention and ensure talent flourishes across the enterprise.” After reading it, it’s clear that HR can’t continue business as usual given today’s business and talent challenges, and should consider the “actions to take now” offered at the end of the report.

Let’s now take a look at the insights and findings from the report that we found most interesting.

Creating Open Cultures

It seems that everyone in HR is talking about the employee experience today, and IBM’s research finds that one of the primary focuses for forward-thinking CHROs is designing open cultures. It notes that employees today “expect experiences at work that are as intuitive as the interactions they demand as consumers.” But there are challenges, including:

  • While a vision of the future that is shared across the enterprise is a critical first step to mobilize the workforce, only 51% of CHROs say their workforce has a sense of where the organization is headed.  
  • Just 54 percent of CHROs and 46 percent of CEOs report that their organizations have been successful in eliciting input from employees to develop new ideas.
  • Only about half of CHROs report their organizations are very effective at transparency and continuous dialogue — even fundamental collaboration is not valued or actively promoted in their organizations.
  • 54 percent report an increased focus on employee experience in the last two years, yet CHROs from organizations that lead in revenues, profits and innovation are ahead of their peers in these efforts.

Exponential Learning

Faced with today’s skills shortages, some CHROs are using new technologies such as AI to embrace an ‘exponential learning culture’. Exponential learning culture “emphasizes ultra-rapid skills development and the intentional design of interactions to advance up-to-the-minute knowledge sharing,” IBM writes.

Related findings that we found notable include:

  • While digital skills remain a critical need and priority, there is a growing emphasis on developing inter- and intra-personal skills.
  • While hiring remains an important mechanism to address the skills issue, CHROs note that because the required skills change at a rapid rate, it’s difficult to keep pace through hiring alone. 37 percent expect to train employees in emerging technologies.
  • An emphasis on continuous learning is a significant differentiator between the Reinventor CHROs and their peers. 72% of Reinventor CHROs are pursuing it today, compared to just 40 percent of Aspirationals. This may partly explain why 70 percent of Reinventors are confident that they already have the right people and skills in place, versus 30 percent of Aspirationals.
  • Today, 34 percent of surveyed CHROs have personalized learning in place, but that number could more than double in just a few years, with 71 percent of CHROs rating personalized learning experiences as highly valuable for the future. CHROs from Reinventor organizations agree — while nearly half have already begun to implement personalized learning, more than 80 percent value this as a future capability.
  • Only 50% CHROs say their organizations actively support and promote knowledge sharing across the business. However, 71% of Reinventors cite this as a priority.

Make Way for Change

As businesses experience continuous change and transformation, CHROs must keep close to their partners in the C-suite and boldly change what HR does and how it does it, IBM finds.

The good news, IBM writes, is that most CHROs are getting ready to take on wholesale change: 61 percent identified six or more functional capabilities that they plan to tackle in the next few years. The chart on this page (Figure 8 from the CHRO report)  provides a revealing look at CHROs’ top priorities for change.

Download your copy of the CHRO Survey here.

By |2018-08-01T11:14:07+00:00August, 2018|Human Resources, Marketing Research|

About the Author:

Mark is the founder and ceo of HRmarketer.

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