Businesses globally are unprepared to face the challenges of the changing business environment, as they struggle to manage the demands of Millennial (also known as Gen Y) employees and adapt to disruptions in labour markets.
However, business leaders across the world recognised the need to tackle leadership issues, retention and engagement of staff, and reskilling HR employees, according to the latest Deloitte Global Human Capital Trends survey.
Of the 2532 business and HR leaders surveyed across 94 countries, 66% said they were ‘weak’ in their ability to provide a focused leadership program for Millennials and 51% lack confidence in their ability to maintain succession programs.
Deloitte Australia’s human capital leader David Brown said in a statement the major challenge facing businesses globally is their ability to “deal with the major trends that are reshaping today’s workforce”.
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“The 21st century organisation is global, highly connected, and demanding. Organisations, and specifically HR leaders, need to better adapt if they want to attract, engage and develop the right talent in today’s competitive marketplace,” he says.
By 2025, Millennials are expected to make up 75% of the workforce, but 58% of executives surveyed said they weren’t ready to attract or retain the next generation of employees. They also said they were unprepared to face a multigenerational workforce.
Leadership was identified as the most urgent area for action, with 38% of respondents ranking it the most important issue, and a further 48% said it was important.
But while leadership was identified as an area for critical action, only 13% of respondents thought they’d do an excellent job in developing global leaders.
The report found the biggest capability gaps between the urgency of an issue and the ability to deal with it existed for leadership and analytics, while reskilling HR, talent acquisition and dealing with an overwhelmed employee were close behind.
However businesses in Australia and throughout the Asia Pacific ranked how to deal with an overwhelmed employee, global HR and talent management and retention and engagement of staff significantly behind the global averages.
Brown says the survey shows organisations have to be prepared to manage people differently, “creating an imperative to innovate, transform and reengineer human capital practices”.
Only 7% of HR leaders surveyed felt their teams could consistently deliver innovative programs which impacted the business.
“When you add to this the rapidly changing landscape of HR technologies, such as cloud and big data, and their impact on attracting, retaining and developing talent, it becomes clear that reskilling HR teams is arguably the most critical mission for organisations today,” Brown says.
In order to better adapt to the changing workforce, the report states businesses must change their mindset from the traditional idea of “hiring the right person” to regularly investing in skills training and technology.
“Even if companies can identify the right people, they must then attract them, compete with others to hire them, and train them further once they are on the job. The reported backlog of skills gaps appears to suggest the old way is no longer working,” the report states.
“Many companies have not built development programs that create capabilities in a continuous way. Traditional learning and development programs, which typically sprinkle training across the organisation, are simply not dynamic enough.”
Rather than episodic training, Deloitte found continuous education, experience, exposure and the right environment is more likely to generate “robust capabilities”.