Latest HR Trends: HR Budget, The Multiplier Effect, Management Succession Planning, The Dark Matter of Work, The 4M's Concept, Workplace, Skills Gap

???Hello Everyone and Happy Sunday !

Welcome back to the 6th edition of?Weekly People Research.???

Last week's HR trends for researchers were:?HR Budget, Cost savings, The Multiplier Effect, Women, Leadership, Management Succession Planning, The Dark Matter of Work, Skills Gap, The 4M's Concept, Workplace AI Strategy

In this new edition,?you will learn more about:

?? Why should cost savings come with Talent investments?

?? Why are CEOs and Boards struggling with all aspects of Management succession planning, for both unplanned and planned succession?

??Why will the multiplier effect help to have more women in leadership positions?

?? Why Should Organizations develop an AI Workplace Strategy?

??Finally, you will understand why the Skills Gap has a huge impact on all business results?

???Now, let's do a recap of the week on published research:

The 4M's concept for a successful Workplace AI Strategy

?? Findings of researchers:

Banning ChatGPT?doesn’t solve?any issue in the workplace. Instead, Companies urgently need to develop a?Workplace AI strategy. Four M’s -?Multiplier,?Magic,?Mistakes, And?Mayhem?- help frame the Workplace AI strategy and helps HR and Business leaders think through how AI impacts the workforce, according to a new interesting interesting?research ?published by?Forrester . While employees are optimistic about how AI and generative AI, in particular will affect their work, feelings vary considerably by seniority and by country, according to another new interesting?research ?published by?Boston Consulting Group (BCG) ?using data from 12,898 employees from executive suite leaders to middle managers and frontline employees in 18 countries.

Researchers also discovered that?80% of leaders?say that they use generative AI regularly but?only 20%?of frontline employees say that they do so.

?? This disparity in AI usage between leaders and frontline employees likely contributes to the vastly?different levels of optimism?they expressed.

?? Recommendation of researchers:

? 波士顿谘询公司 researchers made 3 recommendations for Leaders to succeed their AI Strategy:

1?? Ensure that there are spaces for responsible experimentation?

2?? Invest in regular upskilling

3??Prioritize building a responsible AI program

???? What were the expert opinions:

Very nice research and typology of OpenAI implications. Also, fascinating to see how different groups perceive OpenAI. One of the things I like about the 4 M's is that different perceptions exist by different people. All 4 M's likely exist. OpenAI disruptions will affect people differently, but as researchers (and you) say, it is coming (and here) and needs to be understood and used not banned, according to Dave Ulrich

Organizations need to create a workplace AI strategy to ensure that the outcomes of utilizing AI are employed in the correct context. AI creates a mound of data - not all of which adds value and, in some cases, used in the wrong context it can create total 'mayhem' leading to a costly outcome, according to George Kemish LLM MCMI MIC MIoL

Skills Gap impacts drastically the Business outcomes

?? Findings of researchers:

Skills gaps will make or break companies moving forward.

There is a major impact of skills gaps on the organization and their business. Increased stress (50%), less productivity, decrease in realized objectives, less time for innovation in new products or processes, and increased security risks. C-level IT leaders are 2 times more likely to upskill and reskill existing employees than hire additional staff to close skills gaps, according to a new?research ?published by?Skillsoft ?and using the?Qualtrics ?XM Platform using data from 7,952 complete responses from IT decision-makers and staff and among them 213 self-identified as C-level executives.

?? Recommendation of researchers:

?? Researchers provide below recommendations to organization to close the skills gap:

??Determine future goals you have for your organization, as well as any potential roadblocks to achieving those objectives.

?? Inventory the skills currently in your employ, as well as any that might be in the pipeline.

?? Evaluate the certifications, learning paths, or qualifications your teams will need to realize your future plans.

?? Do a cost, time, value analysis to see if it makes sense to skill, upskill, or reskill current employees. Or, is recruiting skilled employees a more viable approach?

??If your plan is to recruit, come up with a strategy for attracting new talent. Look at how your competition is recruiting and what they are offering to attract the most skilled, in-demand employees.

??If your plan is to skill, reskill, or upskill current staff, determine what learning path or delivery format makes the most sense.

??Partner with a trusted expert in the field of learning solutions that can help you achieve your goals.

???? What were the expert opinions:

The impact of skills gap on key organization outcomes confirms our (and other work). We would add external stakeholders (customers, investors, communities) who also require talent (skills): "our people are our customer's most important asset". also, the prioritization of where to focus is fascinating. We just posted a formula for defining priority opportunity that shows how research and analytics can help determine where to focus. Again, this research with a sample of mostly IT respondents confirms these ideas, according to Dave Ulrich

Looking at this research, it would seem that both the employer and employee are impacted by the skills gap. The employee is stressed and also losing out on career development and the employer is likely to lose market-share or the ability to function in a way that adds value to all stakeholders. If employees (at all levels) are unable to re-skill or upskill, then the organisation itself will end up in a downward spiral. The ability to retain and recruit skilled people is of extreme importance if the impact of skills shortages (as you have highlighted) is to be eradicated, according to George Kemish LLM MCMI MIC MIoL

The Dark Matter of Work affects Employee Productivity & Efficiency

?? Findings of researchers:

Researchers defined the Dark Matter of Work as activity and information that we can’t immediately see, but that has a powerful influence on everything around it.??Knowledge workers are now using fewer software applications than in 2022, which business leaders say is down to deliberate action they have take

Dark Matter is still present within organizations, potentially hampering individual, departmental, and organizational productivity through the ambiguity it causes. Knowledge workers estimate that business leaders can see just over half of their work, and business leaders are in broad agreement.

The increased complexity of the digital age and the hybrid working revolution accelerated the growth of Dark Matter, but did not create it.

It has existed in activities such as meetings for decades, which has only increased in complexity as we introduced applications like video conferencing tools, according to a new interesting?research ?published by?Wrike ?conducted by?Sapio Research , which surveyed 1,005 business leaders and 2,002 knowledge workers across the UK and US.

?? Recommendation of researchers:

This wonderful research shed light on the unseen complexities termed the 'Dark Matter of Work' – that often lead to work inefficiencies and hinder progress.?

The Dark Matter of Work is fueled by complexity more people performing more work in more ways using more applications, making it correspondingly difficult to track, share, and organize work. Researchers believed that a company-wide rollout of an?AI-powered collaborative work?management platform is the optimal course of action to increase visibility and alignment, reduce wasted effort, and deliver business outcomes positioning the enterprise for future growth and success.

???? What were the expert opinions:

Fascinating research with a creative label (dark matter). I may be a more traditional thinker (ahem, I am old), but I like to see evolution of ideas that build on the past. Behind the label of dark matter at work seems an effort to uncover what has been called organization dysfunction, low value added, or bureaucratic work. One such effort was the 通用电气 Workout effort that was repacked by dozens of companies as a way to declutter organizations by removing reports, approvals, meetings, measures, policies, and practices (RAMMPP grid) that did not add value (see book GE Workout). Though hundreds of structured meetings, employees were able to identify and remove non value added work. This research builds on this type of work. The addition of technology in the form of AI offers new insights into how works can be done. Again, drawing on the past, Jay Galbaith (the father of Organization Design) argued that organizations existed to manage information. His information-based perspective is magnified with AI's ability to process vast amounts of information to upgrade decisions. Grounding the present research in the past may help make it more relevant, according to Dave Ulrich

Your analysis reminds me of the "LEAN" concept which, in my opinion, can effectively remedy the so called "Dark Matter of Work" and allow productivity gains and a better quality of work produced by associates. What means: reduction in defects, lead times, cost, waste, and improvements in customer satisfaction, productivity, capacity, responsiveness and quality, according to Renaud de Gallé

I have previously highlighted the problems brought about by poor communication & collaboration. One of the areas covered by our consultancy work takes stock of the quality of the processes being utilised and we will often utilise Quality Continuous Improvement techniques to analyse and improve processes. However, duplicative work is a problem. On the one hand there is a need to capture and put into context 'the dark matter', which can include Implicit Learning (especially when remote working has been introduced), and on the other hand a need to filter out unnecessary work streams and data. Unfortunately, AI does not necessarily produce an effect of balance in that it can create a mound of data - some useful, some not so. For that reason, information management comes to the fore. Someone, with a wide knowledge of the workings of the organization, needs to analyse the data in order to ensure that it is relevant and being communicated to the right people, according to George Kemish LLM MCMI MIC MIoL

I like the idea of "dark matter". I suspect one problem behind the complicatedness of work is due to technology being implemented which doesn't really fix underlying issues / solve challenges. So seeing more technology as the solution might not be the panacea that the authors hope for. As opposed to involvement and empowerment, for example, according to Nick Lynn

The multiplier effect helps to have more Women in Leadership positions

?? Findings of researchers:

Without a more concerted effort, global growth in the share of women financial leaders may?not even reach 25%?by 2031. More women in the C-suite may help attract more women in the boardroom, and vice versa.

For each woman added to the C-suite, there’s a?positive, quantifiable impact?on the number of women in senior-leadership levels just below the C-suite - called?multiplier effect?- and continues to be observed on the organizational level in select countries, according to a new interesting?research ?published by?Deloitte Insights ?using data from 1998–2022 and forecast growth by region and roles through 2031. This research includes more than 68,000 financial services institutions (FSIs) across nearly 200 countries.

The number of women in financial services who reach to the highest levels of leadership the C-suite and the board is rising. Over the past decade, more women have been added to FSI C-suites than men. Women now account for 18% of C-suite positions globally

?? Recommendation of researchers:

Researchers have developed a Within Reach framework of actions,?CARE – Collect, Assess, Report, and Engage,?that outlines a series of steps FSI leaders should consider to help enact change

Regarding reporting, researchers recommend some practices financial services firm leaders can consider:

?? Report progress on diversity goals, both internally (to the board and workforce) and externally. Making a public commitment can perhaps increase accountability and bolster DEI advancement.

?? Communicate clear metrics for success within the organization to create a more equitable environment.

?? Include measurable DEI goals, recruiting, advancement and retention efforts, pay-gap information, and strategies to close diversity gaps.

?? Focus on outcomes achieved rather than just measuring activities and effort.

???? What were the expert opinions:

I liked the work by?Liz Wiseman ?on "Multipliers" when it was published. Her work mirrors and expands on previous work on leadership assumptions (see Theory X and Y from Douglas McGregor).This present research expands the work. Leaders learn from other leaders and having more diverse candidates (women in this study) in senior leader positions will foster more women in those roles. The four stage model (CARE) is a nice tool for making progress, according to Dave Ulrich

Cost savings in HR must always come with investment in Talent

?? Findings of researchers:

Organization that balanced cost savings with dedicated talent investments outperformed those that focused on cost reduction alone. HR functions on average spend $2,524 per employee per year. In terms of staffing, the average HR function employs 57 full-time employees (FTEs) per employee in the organization. Since 71% of HR spend goes toward HR people, the first place most CHROs should look to identify efficiencies and cost savings is in where they are allocating their staff. As staffing and recruiting currently take up the largest allocations of median HR spend ($425 per employee) and staff (3.33 FTEs per 1,000 employees) this year, according to a new interesting research published by?Gartner ?using data among 301 respondents (CFOs or other senior finance leaders) across multiple industries and geographies and Gartner Clients during November and December 2022.

Gartner researchers believe that CHRO must identify opportunities to reduce, replace and rethink current spending and redistribute those savings into growth areas:

??Reduce?

??Replace?

???Rethink

?? Recommendation of researchers:

Researchers found that opportunities for?increased efficiency?for CHRO might be found in?transactional processes?such as:

1?? HR administration,

2?? Employee relations and

3?? Payroll

which together make up an even larger proportion of HR staff commitments than recruiting.

Many HR functions are likely underinvesting, and CHROs should not neglect DEI as a potential target for strategic investment.

???? What were the expert opinions:

When I look back to when I was working in an organization with 1800 employees, we had just 25 HR personnel undertaking all strategic, transactional and operational HR functions (including payroll). That worked out at one HR professional per 72 employees. Given that we did not have the AI functions that are now available, it would seem that, if your figures are correct, there is a great deal of room for improvement in efficiency in HR departments across the organizations that contributed to this research. When I look at the number of HR staff per 1000 employees shown in the Gartner Matrix, it would appear to work out at 1 HR professional per 71 employees. In comparison to my experience (pre-computerized records), it would appear that computerization has not made such a great contribution over the past 5 decades, according to George Kemish LLM MCMI MIC MIoL

I really like the focus of navigating the paradox of cost savings and also investing in talent within HR. Navigating this (and other) tensions is part of the on going challenge of any business or HR leader. The 3 R's (reduce, replace, and rethink) are a nice typology for action. We found that the ratio of HR people to total employee varies a great deal by industry, but also firm strategy, according to Dave Ulrich

And so it continues - decreasing people analytics budgets is like putting on a blindfold and walking out into the street. - you do not know the environment in which you're operating. Decisions tend to be inadequately based, according to Dr. Jim Sellner, PhD. DipC.

The good news is that increasing HR Technology and Talent Analytics’ budgets are respectively ranked in the 1st and 6th positions by respondents. These 2 areas will definitely help boost other HR capabilities and services, according to Alexa Dartenucq

Management Succession Planning is an ongoing Governance challenge for Boards and CEOs

?? Findings of researchers:

Boards are taking on the hard issues, like succession planning and crisis preparedness, and being courageous when it comes to making change.

Board?Strategy showed the single biggest positive category?change this year. Each standing committee - Audit,?Nominating & Governance, and Compensation - received some of the highest scores in the assessment.?Boards struggle with all aspects of succession planning, both for?unplanned succession?and?planned succession, according to a new interesting?research ?published by?Boardspan Inc. ?called "Board Performance Assessment Benchmarks 2023" using data collected from boards nationwide, across all sectors and evaluates a board’s effectiveness in nearly 60 areas, spanning nine categories of governance excellence.

?? Recommendation of researchers:

Researchers provide 3 recommendations to organization to succeed with their boards :

??Set a baseline.

Once a board has a thorough understanding of its performance and the benchmarks, they have something to measure and help set direction. The results help drive a plan to tackle challenging areas and pursue continuous growth.?

??Be intentional about governance planning.

Challenging topics are rarely addressed in one meeting and setting an intention is the first step in tackling a complex issue. Engaging in thoughtful and coordinated governance planning helps in both the short and long term. It’s the best way to ensure your board meets all its governance objectives, and it has the bonus of helping you put time on the calendar to address some of the challenges and strategic work that might otherwise not get the attention it deserves.?

??Get an annual checkup.

Just like going to the doctor, repeating an objective, data-informed assessment every year helps you track improvement in growth areas and spot new opportunities and challenges. Whether simply for maintenance or to address a concern, a well-run board assessment adds immediate value to any board.

???? What were the expert opinions:

What's fascinating to many of the board members we're talking to about this is how progress clearly is being made yet there's still much to do. That's a reflection on the changing nature of board responsibilities and expectations/high bars set by their constituents. Feels like a hamster wheel to some ?? , but the real breakthrough (and joy of board work) comes when enough core pieces are in place such as Succession Planning, Risk Mitigation, etc. so that boards can turn their attention to the strategic aspects of their contribution. ?? Highest value add and more fun! We appreciate you helping us spread the word on intentional governance, according to Abby Adlerman

As noted, boards need to model what they expect of their organization. A primary duty of boards is to select the CEO so the succession scores would be a bit of a concern. Board attention to succession is improving, which is good. I am seeing more board members with "human capability" expertise (equal to financial, IT, and marketing), according to Dave Ulrich

The quality of Succession Planning can have a major impact on business performance (across the organization), according to George Kemish LLM MCMI MIC MIoL

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That's it for last week's recap - Happy Sunday!???

Thank you,

Nicolas BEHBAHANI