The new digital world of work

Copyright © 2015 Deloitte Development LLC. All rights reserved.1 Global Human Capital Trends 2015

HR Technology Disruptions in 2016

The New DigitalWorld of Work

Josh BersinPrincipal, Bersin by DeloitteMarch, 2016

Copyright © 2015 Deloitte Development LLC. All rights reserved.


The Changing Role of HR Technology

The Digital World of Work and How Technology Changes Us:

1. Continued evolution of core HR systems

2. A new market for people management

3. Reinventing of performance management

4. Revolution of corporate learning

5. Culture, feedback and engagement market explodes

6. Analytics finally taking off

7. Digital HR: Design thinking goes mainstream

Agenda


The new organization: Different by design

Demographic upheavals:

Millennials make up more than half the workforce, and Boomers are working into their 70s and 80s.

Digital technology is everywhere:

Technology is disrupting business models and radically changing the workplace and how work is done.

Rate of change has accelerated:

Business must become more agile to keep up with the rapid pace of change.

New social contract between employees and work:: Younger workers demand rapid career growth, compelling and flexible workplace, and a sense of purpose at work.


Percent rating trend important

2016 Deloitte Human Capital Trends

Organizational structure

Leadership gaps

Culture

Engagement

92%

90%

86%

86%

Organizational learning

Design thinking

Skills of HR organization

Analytics

Digital HR

Workforce management

77%

74%

70%

84%

78%

78%

% v e r y impor t a n t

55%

58%

54%

48%

44%

38%

36%

36%

32%

28%

% v e r y impor t a n t

2 0 1 5

…

51%

50%

39%

40%

…

39%

29%

…

…


Organizational design

The rise of teamssay the trendis “very important”or “important” 92%

of large companiesare organizedfunctionally today

25%OnlyShift from top-

down hierarchy to a network of

teams to deliver results faster

are reorganizingor plan to this year

feel expert at building cross-functional teams

believe their companies are very ready to effectively redesign their organizations

understand the way their people work together in networks

21%

14%

12%

83%


Organizational structure

A Network of Teams

BA

DCF

A

C D E

B

G

How things were How things “are” How things work

Shared values and culture

Transparent goals and projects

Free flow of information and feedback

People rewarded for their skills and abilities, not

positionE


The Demands of Millennials Reach Everyone

80% Want to give performance

appraisals to the boss

60% think 7 months

of work means they’re “loyal”

2/3 Want to be “creative” at

work in their job

Their “team mates” are the most

important people at work

Expect feedback weekly and progression

annually


Increasing Role of Inclusion

• Level 4 companies generate 20%+ higher cash flow, candidate pipeline, and leadership

• These companies include diversity programs in :

– Leadership Devt.– Recruiting– Performance Mgt.– Succession– Learning Programs

Inclusion and Diversity Now Strategic to Success

Essential Talent ActivitiesLevel 1

Critical Talent GrowthLevel 2

Managed Talent RelationshipsLevel 3

Inclusive Talent SystemLevel 4

Be

rs

in

by

D

elo

itt

e

10%

19%

59%

12%

Source: Bersin by Deloitte, 2015 – High-Impact Talent Management.


Glassdoor ratings of employer recommendations — 200,000+ respondents

Engagement remains to be a global challenge

Average3.2

What are these

companies doing??


Sources: Deloitte Human Capital Trends 2014 and 2015

The overwhelmed employee

The “average” US worker now spends 25% of their day reading or

answering emails

Fewer than 16% of companies have a program to “simplify work” or help

employees deal with stress.

More than 80% of all companies rate their business “highly complex”

or “complex” for employees.

The average mobile phone user checks their device 150 times a day.

The “average” US worker works 47 hours and 49% work 50+ hours per

week, 20% at 60+ hours

40% of the US population believes it is impossible to succeed at work and

have a balanced family life.


Productivity is Suffering – Is Technology Helping?

US Productivity Last Ten Years

1 billionSmartphones

i-PhoneLaunched

100 MillionTwitter users


We Build Tools, then the Tools Change Us

How Technology Changes Us

Steam Engine - 1874 Telegraph and Electricity - 1882 TRS-80 1977IBM PC 1981


We Build Tools, then the Tools Change Us

What Could be Coming?

Smart Phone 2007 Wearables 2011 Smart Badge 2013 Virtual News 2015


Continued Disruption inCore HR Technology Markets

1


The Reinvention of HR Technology

Focus on the employee, not HR• Appification of everything• ERP vendors arrive• Reinventing performance management• Analytics growing rapidly• Feedback and pulse surveys• Wellness, fitness apps• New recruitment platforms• Next generation learning platforms• Design thinking• Behavioral economics

HR Technology Vendors are Under Pressure


Benefits & Compensation

HiringRecruiting E-Learning Performance Talent Network Based

ApplicationsNew Systems of

Engagement

HR Technology DisruptionM

AR

KE

T G

RO

WT

H -

AD

OP

TIO

N

2 0 0 0 2 0 1 6P R O G R E S S I O N O V E R T I M E

Compensation

HRISBenefits

Administration

Applicant Tracking

Recruiting Sourcing

Learning Management

WorkforceManagement

Succession Management

Performance Management

Integrated Talent Mgmt

AnalyticsTools

SocialRecognition

NetworkRecruiting

HRMS + Talent +Workforce Management

Self-ServiceApps

Personality and Pre-Hire

Culture Assessment

PredictiveAnalytics

Real TimeEngagement

MobileApps for HR

ProcessAutomation

Integration &New Talent Apps

Analytics Driven“Systems of Engagement”

Apps that“Make Work Life

Better”


Replacement of Legacy Systems will Continue. Why?

1. Too Many Systems– Average company has 7

2. Old Systems Remain– 47% of HRMS systems are 7+ years old

3. Market Still Young– < 35% of market has shifted to cloud


Focus of Technology has Changed

• 82% want “Easier to Use by Employees”

• 73% want “Integrated Data and Analytics”

• 66% want “Cloud based Solution”

• 59% want“Integrated talent management”

Rip and Replace is Chosen Solution

Ris

kSpeed

How Will You Upgrade Your HR Technology?

2015 Cedar Crestone survey and 2015 Bersin by Deloitte HR Systems Research


Implementing HR Systems is Not Easy

• Companies with strong culture of change are 2X more likely to succeed in the minds of business leaders

• Companies with poor culture or experience in change suffer 250% higher costs of HR technology implementations

Change and Integration Still Lynchpin to Success

2015 Cedar Crestone survey and 2015 Bersin by Deloitte Change Research

Bersin by Deloitte Change Model


New Generation of People Management Software

2


Benefits & Compensation

HiringRecruiting E-Learning Performance Talent Network Based

ApplicationsNew Systems of

Engagement

HR Technology Disruption: Market TodayM

AR

KE

T G

RO

WT

H -

AD

OP

TIO

N

2 0 0 0 2 0 1 6P R O G R E S S I O N O V E R T I M E

Compensation

HRISBenefits

Administration

Applicant Tracking

Recruiting Sourcing

Learning Management

WorkforceManagement

Succession Management


Integrated Talent Mgmt

AnalyticsTools

SocialRecognition

NetworkRecruiting

HRMS + Talent +Workforce Management

Self-ServiceApps

Personality and Pre-Hire

Culture Assessment

PredictiveAnalytics

Real TimeEngagement

MobileApps for HR


Employee FeedbackPulse Surveys

WellnessLife Balance

Video LearningMOOCs, Career Devt

Culture andSelf-Assessment

WorkProductivity

IntegratedSelf-Service

2016 and Beyond: A New Set of Disruptive ApplicationsM

AR

KE

T G

RO

WT

H -

AD

OP

TIO

N

2 0 1 6

PulseSurvey

NextGenEngagement

MobileFeedback

FitnessSelf-Tracking

Location andTravel Support

CultureAssessment

Self-Assessment

P R O G R E S S I O N O V E R T I M E

Video Learning

Video Sharing

GamifiedOnboarding

CareerPlanning

Help DeskCase Mgt

IntegratedSelf-Service

2 0 2 0

CommunicationsMessaging

Virtual WorkManagement

DocumentManagement

Goal SharingGoal Tracking


Market Evolution becoming Disruptive Again

A New Talent Management Market EmergesPerformance Management

Social Recognition

Well Being

Culture

Learning

Recruitment

Suites Payroll - Talent


How People Management Software Expands Beyond Talent Management

Redefining Recruitment


GE New Performance Feedback Tool

Total Redesign for Mobile: PD@GE


Explosive Growth of New Toolsfor Performance Management

3



Only 12% of companies believe their existing performance management process is “worth the time put into it.”

- Deloitte Human Capital Trends 2015

The Process is Broken


It’s a Shift in Management, not Performance Management

The Evolution of Management ThinkingWe are Here

The IndustrialCorporation

HierarchicalLeadership

CollaborativeManagement

Networks of Teams

<1950s 1960s-80s Today1990s

Andrew CarnegieHenry Ford

Netflix, Google, Facebook, Amazon

Jack WelchPeter Drucker

Howard SchulzSteve Jobs

Profit, Growth, Financial Engineering

Customer Service,Employees as Leaders

Mission, Purpose,Sustainability

OperationalEfficiency

2020

Purpose, Meaning,

and Empow

erment?

Industrial AgePeople as Workers

Management byObjective

Servant LeadershipWork Together

Empower theTeam

The Corporationis King

The Executivesare King

The Teams and Team Leaders are Kings

The People areKing(s)


The Big Shift: From Annual to ContinuousThe Big Shift is Happening

Source: Bersin by Deloitte research, 2014.

Top-Down AnnualPerformance Process

Top-Down ApproachCascading Goals

Annual EventBig Bureaucracy Involved

Lots of Forms andAutomation Needed

Focused on Rating andForced Ranking

Compensation TiedDirectly to Rating

Continuous Managementand Feedback

Team CentricAligned but Local Goals

OngoingWeekly/Monthly Check-ins

Simple Tools, Agile,Mobile, Easy to Use

Focused on ContinuousDevelopment, No Ranking

Compensation Based onMany Factors

HR-Driven and HR-CentricProcess

Management-DrivenDriver of Culture


Goal Management

Organizations that revise or review goals quarterly or more are

3.5 X more likelyto score in the top quartile of business performance.

More Frequent Goal Reviews

Note: Based on our employee recognition survey, we created a business performance index (BPI1) that averages scores on employee engagement and three business-related outcomes (customer satisfaction, cost structure compared to competitors, and market leadership position). It then ranks organizations on the scale. Organizations that scored in the top 25 percent of the BPI are considered to have “strong” business outcomes.

16%

44%

21%

10%

9%

3%

24%

26%

31%

50%

No Goal Revision

Once Per Year

Twice Per Year

Quarterly

Monthly

Source: “High-Impact Performance Management Using Goals to Focus the 21st-Century Workforce,” Stacia Sherman Garr / Bersin by Deloitte, December 2014.

Improvement in Performance Based on Frequency of Goal Review


Expanded model of evaluation and comp

Yes you can change ratings: Juniper Example


Feedback = Performance at Deloitte

1. I am really enthusiastic about the mission of the firm

2. At work, I clearly know what is expected of me

3. In my team, I am surrounded by people who share my values

4. At work, I have the chance to use my strengths every day

5. My teammates have my back

6. I know I will be recognized for excellent work

7. I have great confidence in the firm’s future

8. In my work, I am always challenged to grow

BASELINEBOTTOM QUARTILETOP QUARTILE

1

2

3

4

5

6

7

84.4

3.2

4.2

4.0

3.8

3.6

3.4

Pulse Survey items

Questions that Predict High Performance at Deloitte

Source: Deloitte pilots FYs14-15.


New Generation of LearningEmployees in Charge

4


“Over 300 years of economic history, the principal and most enduring

mechanism for distribution of wealth and reduction in inequality is the

diffusion of skills and knowledge.”

Why learning is so important to employees

The learning curve is the earning curve


Content explosion

Blogs

Ratings

Mentoring

Wiki’s

Video

Podcasts

Discussion Boards

Social Networking

Tagging

Micro-blogs

Virtual Worlds

Stretch Assignments

Communities of Practice

Collaboration

Search

Simulations

Surveys

Whitepapers

Case StudiesArticles

Visual Aids

Presentations

Books

Corp Websites

Manuals

Performance Support

Product Demonstrations

Instructions

Observations

Journaling

Standard Operating

Procedures Newsletters

Corporate Communications

Marketing Collateral

Business Process Documentation

Programs

Role Playing

Classroom ConferenceseLearning

Coaching

Webinars

Lunch ‘n Learns

Chalk TalksOnboarding

Debates

Consulting

LecturesExperiments

LabsTeaching

Courses

Workshops

Interviews

Feedback

MistakesSuccesses

Job Rotations

Peers

Project Post-MortemsMeetings

Role ModelsJob Shadows

After Action Reviews

Customer Data

Goals

Play Conversations

DialogueReports Memos

Appraisals

Business Performance Data

CRM Records

Proposals


• Video is now >55% of all internet traffic and mobile is now over 60%(KP Internet Trends 12/2015)

• 35 Million people have enrolled in MOOCs in the last four years, with 2015 enrollments doubling 2014 (Class Central)

• Over 50% of learners use mobile for more than 1/3 of their learning (Degreed)

• India is estimated to be a $3-4 billion market for corporate learning and MOOCs

Expert and user authored video is taking over

Video and Mobile is Taking Over Learning


Consumerization of education has arrived

MOOCs have Consumerized Education

• 400+ universities. 2,400+ courses.• 35+ million students.


The training industry tries to respond

• 2/3 of L&D leaders believe learners should use learning every week or more.

• Average employee spends 6.5 hours a week learning or trying to learn.

• CLOs say L&D is “wildly out of sync” with how people learn….

• Employees rate L&D with a -31% net promoter score

(49% would not recommend and only 18% would recommend their training dept.)

L&D is Not Keeping Up


The LMS Market is Under Stress

The 1990s-2000s LMS

Training ManagementCourse Administration

Enrollment and SchedulingResource Management

Extended enterprisee-learning

e-commerceVirtual classroomAssessment tool

Security and rolesReporting

Lear

ning

Adm

inis

trat

ion

Social FeaturesCollaboration

Discussion Groups

Lear

ning

Expe

rienc

e

The Modern LMS

“Old LMS” Feature Set

Dynamic ProfileExpert Directory

CommunitiesTagging

Content ManagementRatings

Multi-rater coachingFeedback

Content SharingContent Management

Mobile“New” virtual classroom

Social Profile

Talent Management

Adm

inistration&

TalentSocial &

Collaboration

User

Experience


Culture and Engagement:“Always-On” Feedback

5


Workboard Research

What We’ve Learned about Feedback

http://www.ncbi.nlm.nih.gov/pubmed/19829208

Lack of feedback creates anxiety, worry, and poor performance


The Feedback System

How Does Feedback Work Today?

EngagementSurvey

Senior Management Team

Employees

Line Managers | HR

Performance Review

Filtering and Cleaning

TimePer Year


Feedback is the Killer App

The World of Feedback Apps is HereTraditional

Engagement Surveys

Work Environments Anonymous Network Apps


Social Recognition

Well Being

Culture

Pulse Surveys Quick Feedback


The Listening Organization

Enterprise “Listening” Architecture

IntegratedReporting & AnalyticsSentiment AnalysisNetwork Analysis

Social Media Monitoring

Job Boards& AdsEmployment

Brand

CustomerSatisfaction

AnonymousFeedback

Tools

PulseSurveys

AnnualSurvey

PerformanceCheck-ins

ExitInterviews

PerformanceAppraisals


People AnalyticsTakes Off

6


People analytics

Gaining speed

of companies are “ready” for people analytics, up 1/3

from last year

32%of companies report replacing core HR systems over next

two years

40%

say the trendis “very important”or “important” 77%

People analytics brings

together HRand business

data Challenge will be to transform

insights into business value

are now using HR data to predict and improve workforce performance51%

feel they are conducting multi-year workforce planning48%


The New World of People Analytics

Recruiting &WorkforcePlanning

Comp andBenefits, Rewards

PerformanceSuccessionEngagement

Learning &Leadership

HRMSEmployee Data

Engagement & Assessment

+

Sales RevenueProductivity

CustomerRetentionProduct Mix

Accidents,Errors, and Fraud

QualityDowntimeLosses

Groundbreaking new insights and tools for managers to make better decisions (not HR)

Data management, Analytics, IT, and Business Consulting Expertise

+=

This is NOT HR ANALYTICS!

Location, Travel, Meeting Time

Organizational Network Analysis

Sentiment, Heart rate, Voice+


What our research discovered

Bersin by Deloitte Talent Analytics Maturity Model

Operational reportingReactive reporting of operational & compliance measures •

Focus on data accuracy, consistency & timeliness

Level 1

Advanced reportingProactive reporting for decision-making • Analysis of trends

& benchmarks • Customizable, self-service dashboards

Level 2

Advanced analyticsStatistical analysis to help solve business problems • Identification of

issues & actionable solutions • Centralized staffing & integrated data

Level 3

Predictive analyticsDevelopment of predictive models • Scenario planning • Integration

with business & workforce planning • Data governance model

Level 4Be

rsin

by D

eloi

tte

56%

30%

10%

4% 7%


The Ugly Part of People Analytics

VisualDashboards

AdvancedAnalytics

PredictiveModels

DataIntegration

DataDictionary

DataQuality

Time and Seasonality

Big DataTools

Data GovernanceOwnership

ReportingTools

DisparateSystems

VisualSkills

Stats andData Skills

The Ugly Side: Data Management


New types of data, new ways of analyzing it

Markets Converge: Text Analysis | Sentiment Analysis | Organizational Network Analysis | Feedback Systems


What about Privacy?People are getting spooked.

“63% of employees lack confidence that their employer is keeping data about them private…

…and 72% believe their companies are not telling them what data they are collecting.”

“Big Data Doesn’t Mean ‘Big Brother’”, Conference Board, September, 2015


Digital HRThe Design Revolution

7


#4: Embrace Design thinking

Crafting the employee experience

HR’s focus shifts from

“process builder” to “engagement

architect”

Requires new HR skill sets

from digital and user experience design

to behavioral economics

find their work environment complex1

74%

say the trendis “very important”or “important” 79%

19%

10%

have programs to help manage work and information overload

regularly use design thinkingin their HR and L&D programs

1 Global Human Capital Trends 2015 report


Design Thinking Comes to HR


CommonWealth Bank of Australia – Sidekick Project


Rapid Adoption and Engagement with Technology

Success of Design Thinking in HR


2016 will be a disruptive year, as new models of

management, open feedback, new HR

platforms, and organization design

take center stage for the human capital agenda

A year of change and disruption

The digital world of work has disrupted

the way we operate, enabling

an "always-on" organization, focused

on culture, engagement,

open communication, and feedback

HR leaders are responding rapidly, focused on analytics,

design thinking, employee-driven

learning, and digital HR

A new breed of leaders is emerging:

Younger, more connected, more

agile, always learning, developed

through science

A new organizationa has emerged, a

"network of teams," forcing companies to reorganize, redesign roles and rewards,

redefine careers, and change the role of

management

Enabling this organization, talent focus is focusing on

the employee experience, influenced by

design thinking, the app economy, and transparency


Bottom Line: Technology Will Change Your Workforce – You Must Take Charge

The new digital world of work

Presentations & Public Speaking

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