Latest HR Trends: Human Capital, Productivity, Profitability, Culture of reciprocal Trust, Women Leaders, Office attendance, AI algorithm
Nicolas BEHBAHANI
Global People Analytics & HR Data Leader - People & Culture | Strategical People Analytics Design
???Hello Everyone and Happy Sunday !
Welcome back to?the 7th edition?of?Weekly People Research.???
Last week's HR trends for researchers were:?Human Capital, Productivity, Profitability, Culture of?reciprocal Trust, Women Leaders, Networking, Career Growth, Decision making, Hiring Process, Office attendance, Hybrid Work, RTO, Prediction Pay, AI algorithm, Compensation and Benefits
In this new edition,?you will learn more about:
??Why should companies combine quantitative and qualitative assessment in human capital analysis?
??Why to achieve maximum business productivity, leaders must have a culture of reciprocal trust from top to bottom?
??Why employers should do more to meet Women's Networking needs?
??Why is it important for leaders to be satisfied with the effectiveness of decision making in their organization?
??Why the fact that AI can now predict employee salary based on job title alone is not good enough.
??Finally, you will understand?while hybrid working is here to stay, what is the profile of the employees who come to the office the most?
???Now, let's do a recap of the week on published research:
?? Findings of researchers:
Human capital?is a?critical source?of competitive advantage and?fundamental resilience.
Human capital analysis must combine?quantitative?and?qualitative?assessment and researchers propose a range of accounting metrics that treat people more?like an asset?as opposed to?a cost, which allows them to refine our understanding of their contribution to returns and productivity accordingly.?HCROI is?positively correlated?with forward excess returns over multiple time horizons and across sectors, even after controlling for a variety of factors; companies with stronger HCROI create more value through the cycle, according to a new interesting research published by?Schroders?in collaboration with?Sa?d Business School, University of Oxford, and the?CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM?(CalPERS).
?? Researchers believed in the organizational hierarchy, aligning Schein’s model to a familiar set of human capital issues. Synonymous with the assumptions on which an organization is built, foundations are represented by a company’s purpose and governance.
Researchers focused on 2 main metrics:?Human Capital Return on Investment?(HCROI) in combination with?Employee Economic Value Added?(EEVA).
While they present and discuss other human capital metrics in the report, these two terms can best aid investor understanding of the sustainability of company returns within the confines of current corporate disclosure.
?? Recommendation of researchers:
?Researchers conclude that investors can't ignore human capital management in evaluating investee companies. As we approach continued economic volatility, they expect that companies with strong human capital management are likely to be?more capable?of navigating the future effectively. Even as the integration of artificial intelligence across industries evolves, the relevance of people as the stewards of value creation will remain high.
???? What were the expert opinions:
Fantastic post by Angus Bauer and his colleagues at Schroders. Their focus on human capability (our term for talent + leadership + organization + HR) and its impact on excess returns is a next vanguard for the HR field. We have so enjoyed seeing how their work and our work complement each other: see www.g3humancapability.com This work has profound implications for regulatory reporting, investor confidence, M&As, strategic reinvention, and private equity, according to Dave Ulrich
Well said ! And with ISO International Standard 30414 we can measure and report HCM, according to David Simmonds FCIPD
Very interesting. (Although, fwiw, it still bugs me seeing the term ‘Human capital’ still being in such mainstream use), according to Paul Cristofani
?? Findings of researchers:
The success of an organization requires a culture of?reciprocal Trust?from top to bottom. High-performance organizations are?11x more likely?to have leaders who trust their employees. The presence of?5 elements?of?Trust Index?explains 18% of participating organizations’ increased productivity since the start of the pandemic, according to a new interesting?research?just published by?Institute for Corporate Productivity (i4cp)?using data from their clients (Daiichi Sankyo, Inc.,?BNSF Railway?The E.W. Scripps Co. Investor Relations?Land O'Lakes, Inc.?) employing more than 100 employees.
?? By investing in leaders development is a?simple way?to improve trust in the Organization.
?The 5 elements of Trust
i4cp researchers have developed?Organizational Trust Index??which is made up of five elements:
1???Senior leaders trust employees
2???Managers trust their team members
3???Managers are trusted by their direct reports
4???Employees trust their team members
5???The senior leadership team is trusted by employees
?? Researchers found that the presence of these five elements?explains 18%?of participating organizations’?increased productivity?since the start of the pandemic. But overall, levels of trust are still challenging, especially in low-performance organizations.
A previous?research?published by the same i4cp researchers, already found organizations that have fit cultures are ???? ???????? ???????????? to report increased employee productivity during this same time period.
?? Recommendation of researchers:
i4cp researchers conclude that building more trust in an organization is a learned skill that can be continuously improved upon. Organizations that provide a substantial amount of training on people-leader capabilities increase overall trust, while leaders in organizations in which trust is low typically have received much less training.
???? What were the expert opinions:
Institute for Corporate Productivity (i4cp) has a history of doing relevant, and rigorous research. This work on trust continues that heritage. The "trust index" shows an ecosystem of trust among all stakeholders (employees, managers, leaders ... and also customers and family). Trust can be seen as a foundational assumption that leads to or hinders productivity as seen in this work. Thanks to Kevin Oakes and his team of thoughtful researchers for continuing this legacy of useful insights, according to Dave Ulrich
Involvement based on trust, sparks engagement based on trust, leads to resilient performance and great result - gives customers and shareholders trust in the company, according to Stefan Lorentzson
Fostering a culture of reciprocal trust is key to a high-performance culture. Trust in all directions can be impacted by many different things - like listening to employees and trusting them to do their best work at the time and place they choose, listening to their feedback and taking actions to improve, being empathetic to employees, acting to the best interests of different stakeholders inc. employees, the society, etc., according to Marija Kose
Measuring trust and satisfaction among associates shall be carried out on a regular basis, gathering feedback through various methods: surveys, One-on-One meetings, exit interviews, 360-degree feedback, performance reviews. Additionally, it is essential to act on the feedback received to address any issues and improve overall satisfaction and trust within the organization. Otherwise the approach will be totally ineffective. Worse, it will create dissatisfaction and frustration. I totally believe in the link between trust and productivity. I would even say that there is no sustainable and healthy performance without a climate of trust. In the environments I have been in, where there was no trust left, the commitment of employees has eroded, the most talented have progressively left the company, and business and financial results have deteriorated. Only profound cultural changes can reverse this harmful spiral. Here are some key success factors: transparency in communication (for successes and critical situations), fairness in decision-making, accountability for actions taken and commitments made, empowerment of employees by giving them the right to make mistakes. Above all, put the well-being of employees first as their satisfaction directly affects trust and productivity, maintaining high ethical standards and integrity in all aspects of the organization’s operations, according to Renaud de Gallé
If you go into more detail, you will see that four conditions for reciprocal trust seem to be very important: Competence, Benevolence, Integrity, Predictability - Gillespie (2003); Dietz and Den Hartog (2006); Jonge and Scherm (2015); Felfe (2015) From a biological perspective, oxytocin appears to be the solution to many answers regarding trust and productivity. Zak, P.J. (2018). The Neuroscience of High-Trust Organizations. Consulting Psychology Journal: Practice and Research, 70 (1), 45-58, according to Nicolas Kupper
Trust is the foundation of effective relationships, which are themselves the connections that turn a functionally based organization model into a valuable and value creating business model. People can only perform at their highest levels when their individual skills, knowledge and talent is leveraged through effective leadership that supports collaboration and cooperation and a workplace where dignity, integrity and trust are combined with the systems and tools necessary to get the job done. We continually see low engagement because leaders fail to create a climate where people have a passion for what they do and the pride to do it well, according to Nick Shepherd
?? Findings of researchers:
Contrary to popular belief, networking events and groups are most effective in achieving Career Growth.
?? The majority of women leaders report that intentional forums like networking events or professional networking groups helped them land C-Suite and board positions, secure raises, and find new jobs with better work-life balance. A majority of women leaders are satisfied and confident networkers but expect their employers should?do more?to support Women’s networking needs. Also?mentorship?is critical for Women leaders navigating the ongoing challenges as Women with mentors are?10% points more likely?to report achievements such as being promoted, improving processes, and leading successful projects, according to a new interesting?research?published by?Chief?partnered with?Morning Consult?using data from survey 751 US women at and above the management level to understand their networking sentiment.
Also this research research finds that women leaders with mentors are more than three times as likely to have their?own mentees, compared to women without mentors.
?? Meeting with mentees is, of course, a way for professional women to grow the next generation of women leaders but that is?not the only reason?why they do it.
?? Recommendation of researchers:
Researchers advise companies to take the following actions for promote women networking:
???Position networking as a tool for problem solving and career development.
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Researchers believed that employers should provide permission and encouragement for networking. Actively encourage employees to tap into their networks to solve challenges and grow their careers.
???Provide diverse networking opportunities.
Organizations should aim for a balanced portfolio that includes a range of in-person, virtual, internal, external, one-on-one, and one-to-many networking opportunities.
???Help employees expand their networks beyond your organization.
The clearest way to enable this is to provide funding for employees to participate in conferences, professional associations, and networking groups. But there are also options for those with tight budgets.?
???? What were the expert opinions:
As I read this thoughtful research, I am asking myself what part of career mobility is generalizable and what part is gender specific. We have seen a movement to networks where the focus is less on a "mentor" and more on a network of "mentors" in work settings where people move frequently. Where these mentorships are formed may vary by gender, which is also interesting. I still lean to more personalization of career choices and career improvements, but gender plays a part of that personalization process, according to Dave Ulrich
It is not surprising that women leaders use purposeful networking to bring about achievement. As a consultancy we use networking (attended 4 in the past 2 weeks) to connect with people with whom we can collaborate. Obviously we are looking for people who could push clients our way but we also use networking to find out what is actually happening in the business world. Some are face-to-face (mostly local) and others are online (across the UK and further afield). In the UK positive networking is not unusual, according to George Kemish LLM MCMI MIC MIoL
I would say that male leaders can learn greatly from this technique, according to Daniel Kong
?? Findings of researchers:
Decision making is the ‘missing piece’ in hiring strategy for leadership positions
A quarter of senior executives say they were not asked about their decision making capabilities at interview stage and only around a third (36%) say that their decision making style aligns with that of their organization. There is also evidence to suggest that, even when asked about decision making, senior executives are not pressed to elaborate on their approaches to the process and thinking behind their decisions. Those who are satisfied with decision making effectiveness in their organization are?3.6 times more likely?to be satisfied with their jobs overall, compared to those who aren’t satisfied with decision making. This suggests that effective organizational decision making is a key driver of executive success and happiness, according to a new interesting?research?published by?Kingsley Gate?using data from senior executives at C-suite, C-1 and C-2 levels from 13 industries and 5 countries conducted by?FT Longitude?in May and June 2023.
??Researchers found that nearly three-quarters (74%) of senior executives say that their personal values and beliefs often influence the way in which they make decisions.
?? Recommendation of researchers:
Researchers suggest that recruiters should ensure that decision making is discussed with the candidate during the hiring process. Assessing the candidate’s decision making ability and style will lead to the company’s hiring good decision makers, which, as the research shows, enhances decision making in the company overall.
?? Focusing on?decision making styles?during the interview process will ensure that C-suite employees bring a fresh perspective without causing friction.?
Researchers suggest that leaders also need to be able to decipher what decisions need to be made and by who. Also a greater level of transparency is needed in the recruitment/onboarding process so candidates understand the level of autonomy they will have before starting a role.
Finally, they suggest that this transparency and two-way communication in the recruitment process should also filter into decision making in general. This research shows that greater transparency is the most important factor in improving decision making.
???? What were the expert opinions:
Very interesting results. Few would question that the ability to make decisions (or solve problems) is a key leadership skill; i.e. Individuals (leaders included) who make better decisions are likely to be seen as more effective. This research reinforces that premise. The question I am left with is what goes into making better decisions. In our work with clients, we have identified 5 questions that lead to improved decision making. This decision protocol helps focus attention on the decision to be made more than an "action plan" to be followed, according to Dave Ulrich
I would even say that decision making is one of the future skills of a leader, according to Hannes Goth
I would only add that in succession planning (recruitment) there is a need for a corporate strategy for knowledge transfer (learning, training, development, and transfer of corporate knowledge). These are vital as part of the induction process. Thank you for posting another thought-provoking article, according to George Kemish LLM MCMI MIC MIoL
I think the quality of our Decision-making (adaptive processes and results), especially in solving layered, complex problems, is THE most important value-adding capability for managers and leaders. Of anything. I think most miss that it’s also itself a product/outcome-capability of many critical skills and abilities ‘nested’ within it - like strategic EQ, capacity to be flexible and agile in perspective-generation (I-thou, ‘ripples and dominoes’, scale, scope, temporal precursors and legacies) etc, according to Paul Cristofani
?? Findings of researchers:
Hybrid work is?here to stay,?and office attendance is?down by 30%?on average but is now well?stabilized.
As of fall 2022, workers were going to the office an average of?just 3.5 days?per week, some 30% below pre-pandemic norms. By 2030 (over the next seven years), in the scenarios researchers modeled, demand for office and retail space is generally lower than it was in 2019. Employees work from home to save commuting time, and they work in the office to see their teams but interestingly researchers discovered that there are two such groups among people who mostly go to the office:?high-earning male C-suite?employees and?low-earning female junior employees, according to a new interesting?research?just published by?McKinsey Global Institute?entitled "Empty spaces and hybrid places" using data from nearly 13,000 full-time office workers, all of them at least 18 years old, in six countries.
Researchers discovered that there are?2 such groups among people?who mostly go to the office:
?1???High-earning male C-suite employees
?2???Low-earning female junior employees
?? Recommendation of researchers:
Researchers conclude that office attendance could also rise if employers find ways to attract workers back to the office.
As pandemic restrictions loosened, employers often offered perks, such as free meals and in-office recreational areas, to encourage employees to return. But that approach appears to have succeeded?only on a very limited scale; just 3% of respondents who were able to choose where to work called such perks their top reason for going to the office.
?? Researchers believed that in long term, what chiefly determines the rate of office attendance will be?its impact on productivity.?If research conclusively indicates either a negative or a positive relationship between hybrid work and productivity, that could push office attendance up or down, respectively. Studies conducted by companies and research institutions have so far shown?no negative relationship?between hybrid work and productivity.
???? What were the expert opinions:
?I really like this research because it is not "all or nothing" (all remote or all office). Where people work varies by all of these factors: industry, geography, company size, age, income, seniority I might add type of job (which is somewhat related to industry). There are two meta messages for me First personalization of work which implies caring (for the person... not mentioned in this study) and tailoring where people work (which is the focus of the study). Hybrid includes a lot of tailoring, which makes sense. Second, where and how people work (hybrid) seems less relevant than why and what they work on. I have consistently suggested that the boundary of work is not a place (hybrid), but a shared commitment to serving customers. When someone serves customers, they are "at work" regardless of where. Again, I so like this research focusing on both the reality of hybrid work and the personalization of it, according to Dave Ulrich
Whilst I agree that work can be undertaken anywhere, I have slightly different thoughts to Dave Ulrich when it comes to where people work. According to Peter Drucker, organizational design will be dependent upon the learning culture. However, as we know, this is no longer the case with the introduction of remote working where, in many cases, there has been a decline in development due to individual silos creating a void in communication and collaboration. Furthermore, implicit learning is not always put into context when working remotely. I see hybrid working as an opportunity for implicit learning to be shared in the correct context. With regard to the research undertaken by McKinsey & Company - I am surprised that it highlights 'female' junior employees and not all junior employees. According to Forbes: Today's early career professionals (both sexes) have highlighted that they haven't had the benefit of traditional company orientation, team building and professional networking that are critical for them to 'learn the ropes' and build their professional networks, according to George Kemish LLM MCMI MIC MIoL
?? Findings of researchers:
We already know that AI can?automate repetitive and time-consuming tasks so HR professionals can focus on creating strategies. This time, it directly impacts HR who work in Compensation and Benefits (C&B). Pay benchmarking algorithms learn complex patterns between?what people earn,?the work they do,?where they do it, and in?what economic conditions.
A new algorithm?predicts pay?from the characteristics of someone’s?job title alone so using far?so?using?far less?context. Amazingly, this model automatically learns patterns that capture economic realities about pay. But it also learns patterns that reflect little more than the model’s missing context, according to a new interesting?research?published by?ADP?and using anonymized data of ADP Clients.
?? Recommendation of researchers:
?? Provided more context about job type, job location, and other factors that predict pay, it could learn more complex patterns with minimal human intervention.
?? As you may have read with this wonderful research, AI researchers still need C&B experts to adjust and further develop algorithms for payroll prediction but the evolution of HR jobs is changing - thanks/because of AI - the role of C&B managers will eventually change.
???? What were the expert opinions:
We will likely see many more similar applications where AI enables access, sourcing, and filtering of data into information. Many HR tasks are related to information and AI will be helpful in that process. It can supplement but not replace human insight, according to Dave Ulrich
Great advancement in using AI to predict salaries based on job titles alone! However, we must be mindful of the limitations of this algorithm as it doesn't consider other relevant factors such as job type and industry. It's crucial for C&B experts to provide the necessary context to fine-tune and develop these algorithms, ensuring more accurate and ethical outcomes. The human factor remains essential in ensuring fair and equitable compensation for employees, according to Ivair Costa
?The AI, nor the individual subject, can control for decisions around Job Titles being made.It's a two-way street, of course. Some changes in job title might over-value the impact an individual may have, causing a risk to organisational investment through recruitment. Considering the volumes of recruitment activity (which continues to become more and more fluid) this represents a significant risk to asset investment.The sensible thing, therefore to drive widespread adoption, would seem to be making the data open-source - to drive widespread adoption, according to Mark Lawrence
?Definitely adding to another level of pay transparency, according to Yvonne Bell (She/Her)
It is highly likely that there will be differences in job role when looking across different industries/organizations (an HR role in one organisation may be different to an identical role in another). When benchmarking salaries there is a need to put a value on these differences and to adjust the salary to take these differences into account. This is especially important if employers are to remain competitive when recruiting staff (especially given the current skills shortages). I agree with Dave?- AI can supplement but not replace human insight - especially true in this case, according to George Kemish LLM MCMI MIC MIoL
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That's it for last week's recap - Happy Sunday and wishing you health and success?!???
Thank you,
Nicolas BEHBAHANI
Helping organisations to realise human potential and Total Stakeholder Value
1 年Nicolas The Schroders report is indeed very interesting, particularly from an asset manager. However, the use of accounting measures should be used with great caution. The signals they may send to business leaders and HR teams, in terms of improving such metrics through [people] cost reduction are the antithesis of progressive, mature human capital management. The Maturity Institute response to the report explains more: https://www.dhirubhai.net/pulse/has-schroders-moved-needle-investors-valuing
Global Head of People & Culture | Business Partner | CPO: Enabling Growth Through People | Culture & Talent Builder | Empathetic Change Agent | Innovator | M & A | Recruiting | Exec Comp | Ops | Forbes Award | IPO
1 年I look forward to your posts and research! I learn so much - thank you!
Founder & CEO @ Lever Talent | Host of The Lever Show | Helping leaders develop talent strategies that leverage a tech-empowered future.
1 年Great edition, Nicolas! The Schroders Report on HCROI is the best summary I've seen yet on calculations and metrics businesses can use to demonstrate workforce value creation. That said, and as the report notes, the quality and volume of corporate disclosures outlining this data is weak. And I don't think I'm going out on a limb saying it's not because companies are hoarding this data. Very few Human Resources have leadership with this level of analytical competence and/or Finance teams that actually compile and track this data. ?? This competence will be increasingly in demand for HR leaders as we step into the future.
HR Strategist. Lecturer and International Speaker on HRM and Value Management.
1 年Another great round-up of the week - thanks for sharing Nicolas
Speaker, Author, Professor, Thought Partner on Human Capability (talent, leadership, organization, HR)
1 年Nicolas BEHBAHANI Always a delight to see the daily research reflections that inform and advance my thinking. Thanks for the weekly summaries. Happy Sunday.