Organizations predicting high growth, those with a thriving workforce and those with innovative cultures all apparently share a common thread, a new study suggests.
And that is a focus on becoming more human and, in turn, more “relatable,” according to Mercer’s 2022 Global Talent Trends Study, The Rise of the Relatable Organization.
“Organizations today are expected to have a heart, to come off mute on what they stand for, and to make measurable progress against goals relevant to all stakeholders—from ESG to diversity, equity and inclusion (DEI) to co-creating the new shape of work,” the study explains. “They are striving to become more relatable, taking on the values and personalities of their people and their communities.”
In fact, four out of five C-suite executives believe the people and business agendas have never been more intertwined, making it crucial for companies to be more open and relatable, according to the study, which draws on the insights from nearly 11,000 C-suite executives, HR leaders and employees.
“A fundamental change in people’s values is underpinning a structural shift in the labor market. There is now increased pressure for organizations to contribute to society in a way that reflects the values of their customers, employees and investors,” says Kate Bravery, the report’s author and Global Leader of Advisory Solutions & Insights at Mercer. “The challenge is making progress here, whilst grappling with inflationary pressures, pivoting to new crises and tackling differing views on the future of work.”
According to the study, these relatable organizations have homed in on key success drivers:
- resetting for stakeholder relevance and building adaptive capability in their people and processes;
- figuring out how to work in partnership and tackle inequalities;
- driving outcomes on employee health and total well-being;
- incentivizing employability; and
- harnessing energy for the collective good.
Reset for Relevance
According to Mercer’s study, staying relevant means adapting to changing values of customers, employees and investors, which demands a reset of priorities and a new work operating model. “Organizations that walk the talk on their core values—through company purpose, work standards and investment strategies—will better relate with their stakeholders and be better positioned to deliver business outcomes,” the report notes.
Moreover, employees want to work for companies that reflect their personal values. Here, the study notes that 96% of employees expect their employer to pursue a sustainability agenda that balances financial results with social issues, diversity/equity and environmental impact. In addition, the need to be more nuanced and personalized in how employers respond to changing sentiment requires new organizational skills of “listening, learning and adapting” to identify and address unmet needs.
Work in Partnership
People no longer want to work for a company, they want to work with a company, the study notes. Nearly all executives (96%) say we are in an employee-centric labor market and 70% of HR professionals are predicting higher than normal turnover this year. Relatable organizations see the value in “partnering” over “leading” and are doing this by evolving their return-to-work strategies into future-of-work models.
Against that backdrop, the study found that 62% of employees would join a company only if they can work remotely or in a hybrid engagement, and 74% believe their organization will be more successful with remote working and/or hybrid. Yet most executives (72%) are concerned about the impact of remote working, as 75% say they have an apprenticeship culture where people learn side by side, not remotely—thus, requiring a redesign of learning.
In addition, gig working remains a favored strategy for the C-suite, with 6 in 10 executives expecting that gig workers will substantially replace full-time employees at their company in the next three years. But with fewer than 6 in 10 full-time employees open to gig work, more needs to be done to make this a viable option for employees, the study observes.
Deliver on Total Well-Being
The pandemic exposed the health and wealth gaps for different populations, underscoring that accessibility and affordability of care is not enough, Mercer notes. Consider that 81% of employees feel at risk of burnout this year (up from 63% in 2020).
What’s more, across all demographics, financial worries have increased, with half (51%) of employees saying they feel insecure about their financial future. As such, shifting the focus from reducing health-related costs to optimizing investment so that people remain healthy and engaged is key to people sustainability, the study suggests.
Technology is playing an increasingly important role in enabling benefits strategy as well. According to the study, four out of five companies (both midsize domestics and large multinationals) are already using or are planning to implement an AI-driven benefits enrollment platform (up from 51% in 2020). In addition to personalizing total rewards, by leveraging enhanced analytics capabilities, leading companies can forecast the future trajectory of their employees’ wealth, retirement and long-term health outcomes.
Build for Employability
Mercer reports that 91% of employees recently learned a new skill, yet almost all companies (98%) report significant skill gaps in their organization. And while HR’s top reskilling concern is that reskilled/upskilled talent will leave the company, one way to address the issue is to offer more opportunities for employees to use their newly acquired skills. As such, skills-based models are enabling organizations to deploy talent more flexibly and tap into broader and more diverse talent pools.
In 2019, 25% of employees said they intend to stop working completely at retirement age, but that number is down to 16% for this year. The good news, according to the report, is that 39% of companies say they are enabling employees to adapt retirement benefits to their personal circumstances and 38% are proactively offering older workers different employment options, including phased retirement.
Harness Collective Energy
The pandemic helped accelerate the adoption of new technologies, business models and modern ways of working, says Mercer. Nearly all companies (97%) are planning enterprise-wide transformation this year, but employee fatigue is cited as the number one barrier to delivering on that transformation.
As companies transform, it will be critical to rethink the employee experience with an eye toward energy; 65% of executives believe that as they have automated HR processes, they have lost valuable contact between HR and the business, the study notes. “With energy levels at critically low levels, there is a collective fatigue that is impacting productivity,” says Bravery. “Technology is both a contributor and a savior. Enhancing digital adoption, improving the communication of strategic vision, and addressing organizational complexity will be key,” she emphasizes.
