As the world recovers from the Covid-19 crisis, it cannot be denied that it has left an impact on the way organizations operate. Not only that, but the past decade has also seen significant advancements in technology and automation. This has been dubbed “double disruption” by the World Economic Forum (WEF), with many organizations succumbing to it.
However, in the face of such unpredictability, around 10 percent of the global sample of HR organizations have utilized the disruption as a catalyst for change and to drive value. These HR organizations have been aptly termed as ‘Pathfinders’ by KPMG professionals.
What are Pathfinders?
Pathfinders are HR organizations focused on integrating and mutually reinforcing capabilities such as employee experience (EX), data analytics, workforce shaping and digital HR learning. Not only have they shown themselves as exemplary in leading the way through double disruption, but also in other challenging areas including climate change and generational differences. In addition, they tend to be more positive about the future, more likely to adopt leading technologies than their peers, and have responded more quickly during the pandemic compared to their counterparts.
Notable Pathfinders in HR were found among leading organizations in the banking, technology, health care, retail, insurance, and manufacturing sectors.
Research Core Findings
KPMG Global professionals conducted in-depth interviews with HR leaders who have demonstrated Pathfinder characteristics. So, what did they learn?
- The ‘S’ in ESG
Pathfinders understand the tremendous value that Inclusion, Diversity and Equity (IDE) bring.
- The ‘total workforce approach’
Pathfinders challenge existing approaches to talent management and embrace a new ‘total workforce’ philosophy.
- Reimagining HR for the new world of work
Pathfinders experiment with new ways of working as well as emerging technologies.
What does the ‘S’ in ESG really mean? And how is it linked to IDE?
ESG stands for Environmental, social, and governance, and refers to the sustainability and impact of a company beyond that typically covered by financial reporting. It has seen a surge in interest, with 30 percent of senior executives looking into investing more than 10 percent of their company revenues on ESG activities over the next three years. With the pandemic, the social aspect came under the spotlight, accentuating IDE concerns that needed to be addressed.
Pathfinders recognize IDE’s tremendous value and incorporate it into shaping their organizational strategies. Leveraging on data analytics, Pathfinders are actively working on identifying hidden biases that may affect performance and drive attrition.
By utilizing data insights, a Pathfinder within the health care sector realized that their recruiting pipeline lacked diversity. To source a diverse pipeline for talent, a multi-pronged hiring strategy was launched, and included investing in paid internships and exploring tuition-free opportunities. The Chief Human Resources Office (CHRO) notes that taking the long-term approach helps generate lasting changes, not only across the organization, but also within the community.
Pathfinders believe that they should be leaders of change for societal issues, such as IDE-related biases. For instance, a Pathfinder in the insurance sector utilized data on specific employee populations and discovered that minorities felt less included. As a result, listening sessions were conducted to encourage a deeper understanding of their experiences. At the same time, the findings led to the enhancement of recruitment principles to protect against bias as well as the launch of reverse mentoring programs to educate managers.
Pathfinders, therefore, recognize that significant change occurs when everyone in the organization acknowledges their own biases and adapts their behavior in response. The outcome? These organizations are actively reassessing key leadership capabilities to encourage greater diversity of thought and experience, with CEOs and CHROs alike agreeing on the need to uphold organizational purpose and values to retain and attract employees.
The ‘total workforce’ approach
Pathfinders embrace the new ‘total workforce’ philosophy, even though it challenges traditional approaches to talent management. They have shifted to becoming more employee-centric, rethinking performance management, improving digital enablement, and helping employees build the skills they need – a lasting approach meant not only for today, but also for the years to come.
Establishing the right organizational, employee-centric culture and owning the EX are both key characteristics of Pathfinders. Leading-edge technology plays a role in implementing the employee-centric model; when applied correctly, it provides the foundation for more employee-centric processes and seamless experiences.
With the cost pressures of recruitment and a narrowed talent pipeline due to the pandemic, rebuilding the workforce via reskilling and upskilling have become top priorities. HR leaders are finding more efficient and innovative ways of identifying and solving skills gaps. In the height of the pandemic, a Pathfinder within the banking sector closed their physical offices as they developed new ways for customers to interact virtually. Instead of laying off branch teams and hiring new digital support staff, they reskilled 1,500 employees to move into their virtual banking environment. “The top three highly demanded jobs of the future don’t exist yet, so building skills in this digital world has become hugely important” notes the EVP Employee Success Business Partner.
Skills are constantly evolving. According to the WEF, the value of skills decreases by 50 percent every five years. Organizations may be seeing a decline in conventional competence frameworks and instead observe more frequent use of tools like talent marketplaces to match people, skills, and tasks. It is then easier to find talent throughout the organization by identifying skills gaps, connecting employees to projects based on skills requirements, and empowering employees to identify development opportunities.
There is a shift in performance management as organizations increasingly recognize that organizational performance is positively connected to learning and collaboration. Various Pathfinder organizations are evaluating their performance management strategy to ensure they have strength-based, agile and a ‘just-in-time’ approach focus on objectives and key results. Despite the aspiration to change, the hesitancy for organizations lies in the “we’ve always done it this way” idea. In addition, the move to overhaul performance management requires significant coaching and change management. Although conventional performance management may be complex, it is worth a rethink, as traditional methods may soon have no place within the new ways of working.