The volatility in the economy has a direct impact on organisational growth and most organisations are constantly adapting to the changes in the market.
The volatility in the economy has a direct impact on organisational growth and most organisations are constantly adapting to the changes in the market. This volatility has forced organisations to make effective decisions, especially related to human capital. In response to these business pressures, organisations are re-evaluating their strategies around human capital management. Human resource departments are under immense pressure to provide insights which are appropriate and aligned to the mood of the economy.
Managers used to often think that their job is to get financial results rather than to manage people. They believed that the HR function should worry about people management and identify approaches to meet people-related needs. There is a constant debate on the appropriate role to be played by the HR department. Many organisations expect the HR department to act as a strategic partner. The perception of creating strategic impact constantly bridles HR leaders who are seeking ways to earn a seat at the table. HR is at a crossroads. Once designed primarily as a compliance function, today’s HR must be agile, business-integrated, data-driven and deeply skilled in attracting, retaining and developing talent.
CEOs and other senior executives are more worried about the talent than ever before. Senior leadership has realised that to stand out from the crowd they have to invest in human capital. In the annual Global Human Capital Trends survey 2015, Deloitte identified leadership, learning and development, culture and engagement, reinventing HR and performance management, in the order of priority, as top focus areas.
Each country has specific business challenges and India is specifically going through a transition. Majority mandate given by the voters has given an opportunity for stable political environment, which is creating a positive global perception of India as a place to do business. India expects real GDP growth to rebound to an average of 7.1% a year over the next five-year period. The positive perception has created a favourable environment for job-seekers, whereas organisations still face a lot of challenges related to attracting, nurturing and retaining talent.
In the annual Global Human Capital Trends survey 2015 India report, leadership remains a perennial issue along with culture and engagement. Performance management and talent acquisition are considered important challenges in the short run. Learning and development along with HR and people analytics are considered as long-term challenges. Organisations in India report they largely are not ready to address these trends. Indian businesses rank leadership as the most important trend, while people data everywhere was ranked as the least—which comes as a surprise in today’s digital world. It is also important to note that the capability gap, the difference between the importance index and readiness index for leadership has been reported as the largest, highlighting leadership as a major concern and action area for businesses in India. In case of the second-most important trend, learning & development, the capability gap for Indian business stands at 32%, which is higher than both Asia (28%) and global (28%) percentages. This underscores the opportunity and urgency to focus on this important area.
When it comes to the HR report card, Indian leaders largely rate their HR solutions as “good” (40%). However, over 50% respondents feel that there is scope for improvement for how HR functions. On the flip side, businesses appear more optimistic about future growth and are showing confidence in their HR capabilities when compared to global peers. However, HR leaders must not rest here. This is the time for business and HR to prepare for the required, and in some cases radical, transformations shedding old ways of working and ready their leaders, talent and HR teams for the new world of work.
Organisations can start with commitment to leadership from the top. Without CEO ownership, leadership development will likely never be a long-term commitment. The model has to be simple and speak “language for leadership” across the organisation. Inclusive leadership should be core and organisations need to specifically focus on employee segments such as global leaders, millennials and women tailoring development to their unique needs and preferences. Companies need to redefine learning as an agile and routine experience. Real-time programmes to evaluate and assess learning agility, culture should be developed.
It is time for HR to redefine its role from service provider to an enabler and builder of talent. HR needs to raise its game by aligning its skills and capabilities with the organisation’s overall business goals. As HR pursues its own makeover, its strategic role must also change to meet the intense pressures of today’s business environment.
Vishalli Dongrie & Aniket Waghmare
Vishalli Dongrie is senior director and Aniket Waghmare is manager, Deloitte in India