The - DNA - of Human - Capital - Trends - Report - 2019 - Full - Research - Report PDF

The DNA of Human Capital:
Trends Report 2019

Maximize human potential
for future success
Exclusive
HR.com
Research
2 The DNA of Human Capital: Trends Report 2019 • Introduction
Prologue
Like so many other daunting challenges in life, this report began with the best of
intentions.
We thought it would be useful to synthesize our many HR research reports into a single
paper that our (over one million!) members could read to get an overview of the work
produced by the HR Research Institute.
After all, as of early 2018, we had produced 28 reports and figured no one outside
our team was going to read them all. So, as a service to our members and the HR
community at large, we began writing what internally we referred to as the Uber Report
(uber as in “huge” or “supreme,” not as in a certain ride-sharing company). That was
over a year ago…
Now, as we write this, it is June 2019 and we have produced 61 reports and counting.
(Yes, another 33 reports in about a year’s time!). We have, to put it mildly, been slightly
busy. It has been a challenge to ‘finish’ a report that is, after all, by its very nature
dynamic and unfinishable — a perennial work-in-progress that must be updated every
time we publish more research.
Lucky for us, we had Richard Wellins, Ph.D., on the job. As our senior research analyst
for this project, Rich not only took on this often thankless job but continued to champion
it when others were busy striving to meet the deadlines on our many other projects.
Rich read all those reports, pulled out the most essential nuggets and then formulated
recommendations based on the research findings and his own deep expertise.
So, here we are, finally, on the verge of (at least temporarily) finishing the unfinishable
project.
Please don’t go anywhere, Rich. We’ve got a feeling there may be a few research
updates ahead!
— The HR Research Institute Team

An Introduction
Forget tangible assets. They are yesterday’s news.
As of the late 20th century, value became far more dependent on intangible assets
such as brand, proprietary data, research and development, trade secrets and all the
other stuff that ultimately derives from—you guessed it—people.
Even if we can’t count employees on a balance sheet, there’s little doubt that a skilled
employee’s talent represents a potent asset. If, for example, an employee decides
to take her or his talents elsewhere, employees can’t just hire someone else off the
street without regard to their skills. Such skills and talents are assets you can’t touch:
that is, such skills are the mother of all other intangible assets.
How important are intangible assets today? According to Forbes, intangible assets
account for up to 80% of today’s corporate balance sheet.
This shift largely accounts for why the role of the Human Resources profession has
become so critical. The way we manage our people not only drives the performance
of our organizations but the dollars-and-cents value of those organizations. Yes, HR
still plays an administrative role in many organizations, but its primary role in top
organizations is strategic. That’s why there’s growing pressure on HR to drive and
demonstrate the fiscal impact of HR planning, actions, programs and technologies.
To help them achieve this, HR.com has adopted as its primary mission “to make
HR professionals smarter.” Therefore, research has become one of our primary
businesses. We gather data from thousands of HR professionals spanning every
industry and size of company. Moreover, although the majority of our members are in
North America, they increasingly come from all over the world.
While we wish every HR.com member could take the time to read every report cover
to cover, we know that demands on their time make this nearly impossible. So, we
have distilled that data into twelve short pieces, each one highlighting a few key
findings that readers can quickly absorb.
Our intent is to provide you, the reader, with valuable trend and benchmarking data
as well as a finite set of practices that may help your organization become even more
valuable in our era of intangible assets.
About this report
We are proud to share The DNA of Human Capital: Trends Report 2019, in which
each chapter is a research-based “Trait” focused on a key strategic HR issue. The
report is organized into twelve chapters, or DNA Traits, and represents a synopsis
of exclusive research garnered from various research reports complete with key
findings and next steps. Each one of these traits can be read separately or as part of
a larger whole. Check them out here.
DNA Trait / Chapter 1 P-5 DNA Trait / Chapter 2 P-11 DNA Trait / Chapter 3 P-17
The Nouveau Workforce: Leadership: Learning & Development:

The Future Of The World Why Is Competent Leadership Accelerate Raising The
Of Work Is Now So Elusive? Educational Bar
Performance Management: Talent Analytics: Talent Acquisition:

Perpetually & Constructively The Long Overdue Need To Transform Succeeding In An Age Of
Engage Performance Data Into Tangible Insight Talent Scarcity
Diversity and Inclusion: Human Engagement: HR and Workforce Technologies:

Why Does Simple Decades Of Seemingly The Transformation
Implementation Evade Us? Unremarkable Progress Is Embryonic
The HR Function: Workforce Planning: The Human Experience:

HR Must Quickly Realign With Talent Remains The Most HX Occupies The Epicenter
New Roles and Realities Crucial Of Commodities Of Productive Talent
The DNA of Human Capital: Trends Report 2019
DNA Trait 1
The Nouveau Workforce:

The Future Of The World Of Work Is Now
T he confluence of new technologies and new ways of working are rapidly changing what
employers need from their workforces. And, they’re changing what employees need from
their organizations as well. A recent Accenture study, for example, found that 95% of employees
today feel they will need new skills to stay relevant in the near future.
Following is a summary of our HR.com research findings on future workplace trends and the
implications for employee skills and management.
6 The DNA of Human Capital: Trends Report 2019 • The Nouveau Workforce - DNA Trait 1
Finding 1 Networked smart technologies are a driving

force for change
For our Workforce 2020 research, we asked participants to indicate

the factors that will significantly impact the workforce by the year 2020.
“Smart technologies” was the top answer, followed by “employee expertise
requirement.” These two factors tend to go hand in hand. Smart technologies
are the tools, devices and platforms that have sensing abilities, automation,
and predictive capabilities. Their primary function is to make workers “smarter”
and more efficient. But they can only be fully leveraged by people who have the
expertise to make the best use of them.
Networks are changing business models, organizational

Finding 2
structures and work practices
Past industrial revolutions have left behind a residue of traditional ways of

managing employees, with most power still residing at management levels.
And yet, a recent Deloitte study found that just 14% of executives believe
traditional hierarchies make their organizations highly effective. Hierarchies
are not completely disappearing, but they are largely being replaced with more
networked structures.
Why? One reason is networked technologies that have changed the flow
of information both inside and outside organizations. Another reason is that
today’s tasks and projects are more complex than in previous eras, requiring
teams to work across boundaries, quickly making their own decisions.
Another HR.com study, An Overview of Today’s Organizational Structures,

found that 36% of larger organizations (15,000 or more employees) have put
in place highly matrixed work structures. Moreover, 77% of responding HR
professionals indicate that it is very important or important for organizations
to adopt or maintain networked organizational structures. This change has
considerable implications for the role of employees. Information will flow from
the bottom up as much as the top down. And, employees will be counted on
to influence or make many key decisions that, in the past, were reserved for
senior leaders.
Finding 3 New technologies and expanding networks require new skills

and expertise
Greater employee empowerment leads to the rise of a period that we call the
Era of the Expert. High-performing employees will need to be “know-it-alls” in
a collaborative and positive sense. They will be increasingly held accountable
for making decisions as business issues arise. Seventy-three percent of
HR professionals surveyed in our Workforce 2020 study expect that their
employees will need to become subject matter experts to a “much greater/
greater extent” by 2020. That expertise needs to be both deep in specialty
areas and broad across multiple functions. In fact, 81% of the respondents
indicate that working across multiple functions will become far more important.
Finding 4 Analytical thinking will be an increasingly essential skill
What worker capabilities will be most essential? The figure below lists five
capabilities. Although “analytical” was most widely chosen by respondents, all
five point to the need for employees to harness the volumes of information and
data at their fingertips and then turn them into shareable insights.
Such necessary skills are in short supply among organizations that do not
feel their workforces are well prepared for the future. Just 36% of such
organizations say their workforces are able to collaborate in an effective
manner, and just 27% said their employees are good at critically thinking about
information.
Survey Question: Compared to today, by 2020 what worker capabilities

will be most vital for getting work done? (select all that apply)
Analytical thinking: applying information to solve problems
78%
Systems thinking: understanding of linkages

Employees
between components
in 2020 must
not only be
able to apply 64%
information to
solve problems Sense making: finding meaning in information
but be able to
understand 57%
how that
information fits
Managing data: filtering information for relevance
into the larger
organizational
picture 57%
Networking: interacting with others
52%
0 10 20 30 40 50 60 70 80
Finding 5 Few organizations believe that they are making good progress
toward building a workforce capable of meeting 2020 goals
With 2020 just around the corner, it is alarming that only 11% of organizations
report they are making considerable progress towards building a workforce
capable of meeting their 2020 goals. For most organizations, catching up
during this brief time will prove difficult. Major barriers include constrained
resources, misalignment between workforce strategy and business goals, and
insufficient understanding of disruptive changes. Of the three, the last is most
concerning. The inability to understand the potential impact of technology and
other future trends on our business and the talent required could spell the
difference between capturing attractive growth opportunities and perishing
amid more well-prepared competitors.
Finding 6 Organizations must prepare in order to thrive
Radical disruption will change our business models and, in turn, the nature
of work in virtually every single industry. Our only path to success is to be
prepared for what will be an uncertain future. Those making substantial
progress toward building a workforce capable of meeting 2020 goals tend to
enjoy better financial performance than their less prepared counterparts.
Key Takeaways
Following are suggested practices for organizations that wish to improve in this area.
Of course, every organization is different, so only adopt or adapt the ideas best suited
to your circumstances.
1 Consider adopting a flatter, more networked organizational

structure
Far too many organizations are still stuck with traditional structures, hindering agility
and employee engagement. Flatter and team-based structures will be the predominate
way work gets done in the future. This will require a shift in culture and a willingness
on the part of leaders to let go much of their traditional power and spend more time on
coaching, engaging, and developing their teams.
2 Work with senior leaders to develop future-focused skills

HR will need to work with senior leaders to take a closer look at the future competencies
required for future workforce success. Once defined, these competencies should
become part of a strategic workforce planning process to identify and close the gap with
acquisition and development initiatives.
3 Blend skills development with smart technologies

Employees must know how to derive maximum value from smart technologies.
This doesn’t just mean learning how to use a new software, for example. It means
intelligently marrying what people do best with what technology does best. This requires
developing smart systems and processes. HR will become like a “marriage broker”
ensuring smart workers can use smart technologies in very smart ways.
4 Stay on top of disruptive trends

HR.com’s research indicates that a majority of HR professionals believe that their
organizations suffer from an “insufficient understanding of disruptive changes.” Too
few organizations are spending enough time looking at how changes, especially those
driven by technology, will transform their businesses.
5 Nurture insights, not just knowledge

In an age of information-overload, employees will increasingly need the ability to
sift through massive amounts of information, pick out the most relevant information,
turn data into insights, and share these insights with others. The shift to successful
insight creation will likely require the integration of multiple HR areas of focus,
including rewards, measurement, talent development systems, and new organizational
capabilities.
DNA Trait 2
Leadership:
Why Is Competent Leadership
So Elusive?
T
here are few company functions that collectively spend fifty billion dollars a year or more
trying to make things better while they only get worse. Yet, that tends to be the case
with the resources that business invests in developing their leaders. Barbara Kellerman,
a noted author and scholar, describes the state of the leadership development industry in her
book, The End Of Leadership.
For all the large sums of money invested in the leadership industry and for all the
large amounts of time spent on teaching leadership, learning leadership, and studying
leadership, the metrics are mostly missing. There is scant evidence to confirm that the
massive, expensive and thirty-plus year effort has paid off.
12 The DNA of Human Capital: Trends Report 2019 • Leadership - DNA Trait 2
She is only partially right. There is a gathering body of research on the impact
of leadership development. And, most of it points to significant shortcomings.
For example, 58% of the respondents in DDI’s Global Leadership Forecast
reported a low overall quality of leadership.
Here we take a closer look at both the required skills for future leadership and
those practices that seem to have high payoff. The insights are based on a
number of research studies completed by HR.com from 2017-2019.
Finding 1 Good leaders remain scarce
Few respondents to our Leadership Development survey give top grades to the
leadership skills exhibited by the managers and leaders in their organizations,
according to our Revamping Leadership Development report.
In fact, only 20% of HR professionals give a high rating to their organizations’

leadership skills (that is, at least 8 on a scale of 1 to 10), and only 22% even
rate their leaders as a 7 on this scale. Most (57%) rate their organizations’
overall leadership skills at 6 or lower on the 10-point scale. If these ratings
were test scores, then 3 in 5 organizations would be getting failing scores in
the subject of leadership skills.
Finding 2 Most HR professionals view the competencies of their leaders

as poor or mediocre
Strong leaders master key leadership competencies. Yet, as shown in the

figure below, no more than one in three leaders is viewed as highly effective
across nine key leadership characteristics. They score best in the area of
trustworthiness, but even there only about a third give their leaders high marks.
Coaching is of particular concern, partly because leaders are seen as so

ineffective in this area and partly because it is a foundational area of leadership.
Leaders must be good coaches if they are to help employees reach their fullest
potential and achieve their career aspirations. Only 17% of HR professionals
agree to a high or very high extent that their leaders were effective coaches,
the lowest of the nine characteristics. Yet, about half say coaching is one of the
learning modalities they use to provide leadership development.
Another report, Coaching as a Management Must, finds that only about 15%
of respondents agree or strongly agree that employees in their organizations
would say their managers are effective at coaching. This area deserves special
focus given that 78% of respondents report a positive relation between good
coaches and team productivity.
Leadership competency effectiveness
Survey Question: To what degree are the following statements true

among leaders in your organization? (% rated high or very high)
Only 35% They are viewed as trustworthy 35%

of HR They are visionary 31%
professionals They listen well 29%
say that, to They are adaptable 28%
a high/very
They have emotional intelligence 28%
high extent,
their leaders They create a positive corporate culture 27%
are viewed as They respond well to feedback and new ideas 26%
trustworthy They provide clear direction 24%
They are good at coaching others 17%

0 5 10 15 20 25 30 35
Finding 3 Poor leadership is the top barrier to better employee

engagement
Employee engagement remains a problem in most organizations, and poor

leadership is largely to blame. Respondents indicate that trust in leadership
and an employee’s relationship with their immediate supervisor tops the list of
drivers of employee engagement. Yet, only 39% of respondents to The State
of Employee Engagement 2018 report indicate that their senior leadership
prioritize engagement, and only 28% say their managers are skilled at fostering
engagement.
Moreover, as shown in the figure below, we found major differences of the

leadership skill sets in highly engaged (70% or more employees engaged)
versus less engaged (below 70% engaged) organizations. The differences
are considerable in every area we explored with two standing out. Leaders
are much more likely to foster collaboration and build trust by being fair in the
highly engaged organizations. There is considerable truth to the statement “no
one leaves a job, they leave their manager.”
Impact of leadership competencies on engagement
Survey Statement: Rate your organizational leaders on the following

characteristics [percent rating good or excellent]
74%
Build trust by being fair
40%
73%
Foster employee collaboration
37%
Communicate clear expectations to employees 70%

37%
Recognize superior contributions 70%

43%
Take time to listen 68%

37%
58%
Spend time coaching employees
29%
0 10 20 30 40 50 60 70
70%+ Employees Engaged <70% Employees Engaged
In well-led organizations, leadership development is most

Finding 4
likely to be present at all levels and well aligned with future and
current business needs
We compared organizations with stronger and weaker overall leadership.
We found that organizations with more effective leaders are more likely to
develop leaders at every level of the organization as well as more likely to
say that their leadership development programs not only addresses current
needs but future needs.
Impact of leadership practices on organizational success
Please rate the following statements as true or false, as they pertain to

your organization: [percent saying true]
73%
70
Only 12% of
poorly-led 60 54% 54%
Percent saying true
organizations 50
say leadership
40
development
addresses 30 24%
future
20 13%
leadership 12%
needs 10
0
We develop leaders Leadership Leadership
at every level of the development development
organization addresses future addresses current
leadership needs leadership needs
Poorly-led organizations Well-led organizations
Key Takeaways
1 Create a longer-term leadership strategy

Almost all organizations have a business strategy. But few have a strategy for developing
a strong future-focused supply of leaders based on the anticipated needs of the business.
A leadership strategy starts with identifying where your major gaps are likely to exist in
terms of both quality and quantity of leaders within the context of your business goals.
It then delineates the top initiatives that need to be put in place to close the gaps along
with a set of outcome-oriented metrics. A good strategy should not only lead to better
leadership but help avoid investing in a series of short-term and disconnected initiatives.
2 Select the best

Developing great leaders is crucial, but so is recruiting them in the first place. When
recruiting leaders, evaluate them on a suite of leadership competencies that are most
crucial to your organization.
3 Move from guesswork to data-driven decisions

Various forms of analytics and AI can help take the guesswork out of selecting and
developing our future leaders. We can begin to answer questions about who is most
likely to succeed as a leader in a specific assignment or what types of training are likely
to have the highest payoffs. Embracing the power of analytics will result in stronger
leadership along with wiser investments.
4 Turn every leader into effective coach

Eavesdrop on any coaching conversation and you’ll probably hear the manager doing
most of the talking. Yet, coaching is largely about listening well. Coaching is a complex
set of learned behaviors that must be developed over time. When developing coaching,
keep in mind it is a multidimensional skill.
5 Strive for gender diversity at every leadership level

Today’s leadership ranks still have relatively few women. One example: for years now,
only 5-7% of Fortune 500 CEOs have been women. We must encourage boards to look
more closely at viable female candidates. We must identify more female high-potential
leaders and develop them for senior positions. We must encourage senior leaders to
serve as mentors for our most promising future leaders. And, we must put a dead stop
to harassment, which runs totally contrary to a culture of diversity.
DNA Trait 3
Learning & Development:
Accelerate Raising The Educational Bar
E mployee learning and development (L&D) is tied for the most important
HR issue of 2019, according to HR.com’s HR and Talent Management
Benchmarking Report 2019. Along with talent recruitment, L&D was chosen by
38% of HR professionals asked to identify the most important HR issues for the
coming year.
L&D is crucial, but what does it look like and how well is it succeeding? To find
out, HR.com has conducted a number of studies that shed light on L&D trends.
Below is a synthesis of our key findings:
Finding 1 L&D still has a long way to go to achieve excellence

Almost half of HR professionals describe their current L&D as mediocre or
worse, according to HR.com’s Supporting the Modern Learner report. Even
more alarming, only a third have embedded learning in their cultures to a high
extent, while almost a quarter have done so to a small extent or not at all.
18 The DNA of Human Capital: Trends Report 2019 • Learning & Development - DNA Trait 3
Finding 2 Learning is increasingly delivered via multiple

modalities, and that’s good
Instructor-led training remains the single most commonly used learning
modality, but our Modern Learner study indicates that no single training method
works very well as a stand-alone approach. Today, blended learning is crucial
to L&D efforts, and technology-based learning such as online courses and
videos are used by more than half of survey respondents. Moreover, when
we look at high and low L&D performers, we found that not a single study
participant who described their L&D as excellent or good used fewer than three
modalities of employee training.
Finding 3 L&D departments are moving slowly when it comes to new

techniques
Three of today’s most widely discussed learning techniques are not yet
widespread. Only a minority of organizations have embraced microlearning,
mobile learning or learning personalization.
Finding 4 Personalized learning could take a major leap forward

Personalized learning is a good example of a slow but important evolution in
L&D. According to HR.com’s The Arrival of Personalized Learning report, three-
quarters of HR professionals view personalized learning as important and 60%
predict an increase in personalized learning in their firms. However, only 22%
say they have high or very high success in delivering such learning.
HR and L&D professionals indicate personalized learning leads to higher

learner engagement, better outcomes, more insights into learner needs, and
the ability to deliver training more quickly. What’s more, personalized learning
is correlated with better overall L&D performance.
A lack of resources represents the biggest obstacle to

Finding 5
personalized learning
What’s holding L&D functions back when it comes to personalized learning?
A lack of resources mostly. This represents a conundrum. On one hand,
personalized learning will require a significant upfront investment in technology
and content creation. On the other hand, once it becomes a high-quality
delivery paradigm, the efficiency and effectiveness of learning should rise. This
could result in a higher return on investment when it comes L&D spending.
Top Barriers to Personalized Learning
Survey Question: What obstacles do you face in delivering personalized

learning content to employees? (select all that apply)
Not enough resources 64%
Difficulty delivering personalized

37%
Lack of support learning content to so many employees
throughout Lack of support from front line

34%
leadership ranks managers and supervisors
will hamper
Lack of senior leadership support 32%
successful
implementations
Employee lack of interest 29%
Technology is not very effective 29%
0 10 20 30 40 50 60 70
Finding 6 Two features are most critical to personalized learning

When asked about the most critical features associated with personalized
learning, two emerge as most important: the ability to close skills gaps of
learners and the ability to meet the aspirations of learners. The distinctions
between the two are important. The first is aimed at helping employees perform
their current jobs better. The latter gives learners an opportunity to acquire the
skills and experiences required for career growth. One is focused more on the
organization, while the other is focused more on the individual.
Personalized learning means more than just e-learning

Finding 7
Sometimes people assume personalized learning means just slapping up a few
hundred e-learning courses on the learning management system (LMS) and
letting learners pick what they want. That’s wrong. Successful personalized
learning gives learners choices, and it delivers learning in ways that are most
effective for that individual.
In the figure below, we see blended learning (combining various approaches)

tops the list of approaches used to deliver personalized learning. But a sizable
percentage of respondents selected collaborative learning. The lesson:
sometimes people and not just technology are key to personalized learning.
Practices Most Critical to the Delivery of

Personalized Learning
Survey Question: Which three practices are key to the delivery of

personalized content? (select three)
Blended learning 62%
E-learning 54%
Collaborative learning 50%
Most
respondents Instructor-led learning 44%
believe in
a mix of Mobile learning 28%
learning
Virtual classrooms/
experiences Massive open online 25%
courses (MOOCs)
Game-based learning 22%
Learning via social media 12%
0 10 20 30 40 50 60 70
Key Takeaways
1 Ensure that your organization can deliver learning via multiple

modalities
The best L&D functions tend to deliver learning via multiple methods. This means going
beyond instructor-led training. Younger and older workers alike are becoming more
attuned to visual and interactive learning formats. They often want to be engaged in
meaningful and media-rich learning experiences. Moreover, accustomed as they are to
social media, they also tend to want to communicate and collaborate more.
These changes may mean investing in appropriate technologies. Less than half of
HR.com respondents indicate their organizations use an LMS to deliver personalized
content. An even smaller percentage indicate they are using internal social applications
or custom content tools to deliver such learning. This lack of appropriate technologies can
make it difficult to both create and deploy learning content effectively and efficiently across
hundreds (or even thousands) of learners.
2 Consider migrating from push to pull learning

The original purpose of learning management systems was to push learning out and
manage and track learner progress. In some ways, it was the antithesis of personalized
learning. These days, LMS must increasingly pull in learners by accommodating their
individual needs. They must help determine learner gaps, create individual development
paths based on learner needs, and allow learners to easily pull the content they need
and want.
3 Leverage analytics and artificial intelligence when needed

Some of the success of a personalized learning intervention will come from the data
and technology behind the scene. You will be able to gather data on usage, view learner
reactions, feed course recommendations based on a robust learner needs assessment,
and eventually determine which content will do the best job of impacting performance.
4 Don’t forget that L&D needs to learn new skills as well

The role of learning professionals is changing. In addition to mastering instructional
design and facilitation, L&D professionals will need to become part technologist and
part data scientist. Their role will be to sequence a blend of learning content into high-
impact learning journey.
DNA Trait 4
Performance Management:
Perpetually & Constructively Engage Performance
F or years, performance management (PM) has often been attacked as

not only inefficient but as downright injurious to employee morale and
productivity. Here we take a closer look both at the perils of traditional PM and
the promise of PM reforms.
Finding 1 Performance management itself too often suffers

from poor performance
HR.com’s The State of Performance Management study found that about 90%
of organizations have a performance management system in place. Yet, just
23% of responding HR professionals consider their PM systems and processes
to be effective or very effective. Even fewer say their current PM approaches
are driving better employee performance or retention. Another HR.com report,
The Impact of Performance Management on Engagement, found that 42%
of respondents view PM as a necessary evil rather than as a way to improve
business performance.
23 The DNA of Human Capital: Trends Report 2019 • Performance Management - DNA Trait 4
Finding 2 In light of these failures, many are revamping their systems

When asked about whether their organization had changed their system over
the last two years, over a quarter say they had to a high or very high extent,
and another quarter say they had to at least a moderate extent.
Finding 3 Most organizations use some sort of performance

management technology
Fifty-seven percent of organizations use some form of technology as a
backbone to their PM systems. In large organizations, this number jumps to
82%. Among organizations with PM technologies, 61% used a bundled system
that has PM functionality as one component of a broader HRIS/HRMS system.
That number climbs to 75% for organizations with 10,000 or more employees.
Finding 4 As part of the revamping process, many are adding, replacing,

or modifying their performance management technologies.
In HR.com’s The 2018 HR Buying Trends report, we learned that in 2019
performance management systems will be among the HR systems most likely
to be added (11%), replaced (11%), or modified (22%). They are, in fact, one of
the HR systems least likely to be kept the same over the coming year.
Finding 5 One way to reform PM systems and processes is to make

them more continuous
Most organizations continue to use annual performance management
processes. Our State of Performance Management study found that 68% of
organizations continue to use system that conduct formal reviews or appraisals
just once a year or less. Our Moving Towards Continuous Performance
Management report came to a similar conclusion, but it also found that many
organizations were either planning to implement a continuous system in the
future or were exploring the idea. In short, systems in which performance is
continuous or, at least, more frequent than once a year, seem to be on the rise.
Finding 6 Poor skills among managers is one factor holding back

performance management
HR professionals tend to think poorly of managers’ ability to conduct
performance management well. Only about a fifth agree or strongly agree that
managers are skilled at performance management, and only 24% say they
were good at having conversations about performance. Part of the problem
can, however, be traced back to inadequate training programs from HR. Only a
third of managers have received sufficient training in PM skills.
Leader Performance Management Skills
Survey Statement: To what extent do you agree with the following

statements about most managers in your organization? (percent that
agree or strongly agree)
They are skilled at

performance 21%
Managers are management
more likely to be
good at setting
goals than They are good at
having good having conversations 24%
about performance
conversations
about
performance They are good at
helping employees 30%
set goals
They have received

sufficient training in
33%
performance
management
0 5 10 15 20 25 30 35
Finding 7 The reasons for PM are another factor that seem to affect the
success of performance management
It turns out the “why” behind PM can make a difference. In the figure below,
which is from our The Impact of Performance Management on Engagement
report, we’ve broken down the reasons for conducting performance
management reviews into two major categories: Procedural and Affirmative/
Motivational. The former tends to be more administrative in nature and focuses
on actions an organization takes in order to fulfill procedural obligations. The
latter places more emphasis on growth and development.
Although both rationales exist among responding organizations, the most

widely cited reason for using PM reviews falls in the Affirmative/Motivational
category: helping employees to learn and grow. When we looked at this data by
employee engagement level, we found that those focusing more on Affirmative/
Motivational reasons for PM reviews were more likely to report higher levels of
employee engagement.
The Reasons for Conducting

Performance Management Reviews
Survey Statement: Which of the following describes why you conduct

performance reviews? (Select all that apply)
Rationale Percent Category
To help employees learn and grow 81.7% Affirmative/Motivational
To help the company progress 49.5% Affirmative/Motivational
As formality that accompanies the employees’

47.5% Procedural
annual raises
To have a legal record of interaction with employees 40.0% Procedural
To proactively give a raise to a deserving employee 26.5% Affirmative/Motivational
To force a conversation about poor performance 23.6% Procedural
Because they are a required activity 23.0% Procedural
To justify dismissing an employee 13.8% Procedural
Because an employee asks for a raise 1.7% Procedural/Motivational

Finding 8 Organizations with better PM processes tend to differ in six

key ways
We took a closer look at the factors that separate those organizations that
report having effective PM systems versus those that do not. We found that
those with more effective PM systems were more likely to:
►►See PM as crucial to business performance
►►Track coaching conversations
►►Cite employee learning and growth as a reason for PM
►►Utilize performance management technology
►►Employ managers who are skilled at PM and who have received

sufficient training
►►Engage in conversations about employee goals and aspirations

Key Takeaways
1 Train and develop managers to use PM effectively

Training managers to manage performance well is no simple task. It is not just a matter
of training them on how to create a performance review on a piece of software. In fact,
that’s the easy part. It is much harder to train managers to communicate and coach
well, providing essential feedback without reducing employee engagement. Training
managers well requires commitment and a high level of development competency.
2 Increase the frequency of conversations

Many experts believe that PM discussions need to occur more frequently. Some
organizations are doing away with formal reviews altogether. But even if you have an
annual process, it needs to be supplemented with frequent coaching conversations,
career discussions and day-to-day feedback.
3 Determine PM’s primary purposes

It is difficult for one system to serve many masters. In order to maximize the impact of
performance management, decide what the organization wants most from it. Should
it be used primarily to develop employees and increase organizational performance?
Does it need to be connected to compensation, promotions and/or other personnel
issues such as terminations? The answers will impact the nature and, perhaps, the
effectiveness of PM in your organization.
4 Change the current perception of PM

Although HR can help drive the process, PM is ultimately a business system rather
than just an HR process. Senior management should view it as a useful performance-
enhancement tool rather than a necessary evil. When done well, PM can serve as
an organization’s talent dashboard, one which gauges workforce strengths and gaps
relative to business goals.
5 Use and develop the right technologies

Many organizations still use cumbersome manual approaches. PM software is available
for larger and smaller enterprises alike. It makes sense to review what’s available and
adopt the tools that best meet the needs of the workforce.
DNA Trait 5
Talent Analytics:
The Long Overdue Need To Transform
Data Into Tangible Insight
O ver the past decade, business analytics has moved to the front and center as a key
organizational capability. Thanks to new techniques and technology platforms, organizations
are increasingly able to gather data on every aspect of their business, allowing them to make
better current and future business decisions. IDC, a leading analyst firm, forecasts that the
business analytics market will cross the $200-billion mark by 2020, with close to a 12% compound
annual growth rate.
Talent analytics represent a crucial subset of overall business analytics. Yet leveraging talent
analytics requires new skills, solid technology and, more than anything else, a new mindset. Here
we summarize findings from a series of HR.com research studies, providing valuable insights into
the state of talent analytics.
29 The DNA of Human Capital: Trends Report 2019 • Talent Analytics - DNA Trait 5
Finding 1 Too few organizations use talent analytics at all, and even
fewer use predictive analytics
Our 2019 HR and Talent Benchmarking Report found that 59% do not make
use of talent analytics at all and that a mere 16% leverage predictive analytics.
The rest only use data to describe or assess current trends. Findings from
our Leveraging Talent Analytics are equally discouraging. Only 19% of the
respondents report their organizations are very good or good at their ability
to gather, evaluate, visualize and share high quality talent data. Worse yet,
less than a third report that their senior leaders are good at interpreting talent
analytics. Of course, this begs a key question. If they are not relying on data
and analytics, just how are most companies going about making crucial talent
decisions?
There is a huge talent analytics skills gap in the HR

Finding 2
profession
Most HR professionals do not have the skills to make proper use of talent
analytics. Of course, most people have not chosen HR as a profession
because they long to turn themselves into data scientists, yet the skills gap
in this area is nonetheless alarming. In our report The State of HR Skills
and Education, we asked HR respondents to rate the importance of ten job-
related skills. Fifty-eight percent indicate that understanding and using data
is very important in HR. Yet, only 16% consider themselves expert at using
such data. This represents a 42 percentage point gap between importance
and competence. That gap is the largest one out of the ten HR skill areas
investigated in our study.
Three areas are considered most crucial in a talent analytics

Finding 3
system
Respondents to the Leveraging Talent Analytics study were asked to pick the
top areas they consider essential in a talent analytics system. The three most
widely cited are:
●● workforce planning
●● employee performance
●● skills assessments
Survey Question: Of these components, which two do you consider most

essential in a talent analytics system? (choose two)
Workforce planning 38%
Employee
Measuring performance
37%
and analyzing
employee Skills assessment 34%
performance
remains a
high priority, Recruitment needs 26%
suggesting
that many Succession planning 25%
organizations
have failed to
master this key Talent movement 20%
area
Compensation
18%
planning
Others 3%
0 5 10 15 20 25 30 35 40
Advanced organizations are much more likely to use a variety

Finding 4
of talent-oriented reports
Organizations that view themselves as good or very good at talent analytics
are much more likely to use a variety of reports, ranging from those with
simple talent analytics to those that harness predictive analytics. A majority of
such organizations, which we deemed Advanced, use talent dashboards, and
nearly half use predictive analytics, compared with just 6% of Less Advanced
organizations.
Survey Question: To what degree does your organization use the following
talent-oriented reports?
68%
Reports based on
Compared to simple talent analytics 33%
Less Advanced 26%
organizations, 59%
Advanced Talent dashboards 21%
organizations 12%
are nearly
47%
seven times as Reports based on
complex talent 15%
likely to produce analytics
7%
reports based
on complex Reports based on 47%
analytics predictive talent 14%
analytics
6%
0 10 20 30 40 50 60 70 80
Advanced Average Less Advanced
Finding 5 Advanced users are much more likely to report that analytics
brings about positive organizational change
The majority (61%) of Advanced companies say that talent analytics are good
or very good at influencing positive change in their organizations, whereas
just 21% of Less Advanced companies report that extent of positive change.
In other words, better usage of analytics is correlated with more positive
organizational change.
Key Takeaways
Following are suggested practices for organizations that wish to improve in this area. Of
course, every organization is different, so only adopt or adapt the ideas best suited to your
circumstances.
1 Focus on improving talent analytics

Few organizations report being good at talent analytics, but those that are best at it are most
likely to report a high extent of positive organizational change. Organizations that excel in this
area seem to enjoy a competitive advantage. HR.com research makes it clear that improving
talent analytics is an achievable goal.
2 Keep it simple at first

If your organization has not made much progress in analytics yet, take the low-hanging
analytics “fruit” first. Start by defining the objectives, metrics and analysis required from your
talent analytics program. Often the best analytics are those that answer very basic but critical
workforce-related questions, such as, “Where is turnover the biggest problem?” Such analytics
are within reach of all organizations.
3 Automate basic talent analytics reporting

It’s rarely necessary for organizations to spend more than a few hours per week on basic
reporting. If your organization is spending more time than that, then HR should automate that
reporting and free up resources for value-added work.
4 Target those analytics that are likely to have the greatest impact on your
business
Pick critical talent questions your organization needs to address. For example, if you are
experiencing unwanted turnover, you might want to collect data on the “types” of new hires
that are likely to stay. Or, you could investigate the actual impact of actions you take to boost
employee engagement outcomes. Keep in mind that predictive analytics tend to be more
powerful than simple descriptive data such as turnover rates or healthcare costs.
5 Replace—or at least supplement—emailed and printed reports with

dashboards
Dashboards can become very sophisticated, but organizations can start by replacing their
existing reports with relatively simple dashboards. Then they can see what data is being used by
whom. From there, they can modify and improve dashboards to suit the needs and preferences
of users.
6 Engage the senior team

Help them understand the potential impact of talent analytics and ensure you are gathering the
data they consider important. Moreover, it needs to be presented in engaging and visual ways.
7 Take a fresh look at various software solutions

There are an array of packages and associated services that will provide high value in helping
you collect, analyze and visualize your talent analytics efforts.
8 Take the time to measure the impact of talent analytics usage

Metrics and analytics shouldn’t be done for their own sake. They should help the organization
manage talent better. In other words, use analytics to demonstrate the power of analytics.
DNA Trait 6
Talent Acquisition:
Succeeding In An Age Of Talent Scarcity
It has been over two decades since McKinsey & Company produced its influential study
declaring a “war for talent.” Later on, a book titled after the famous phrase was published.
There have been times since, such as the depths of the Great Recession, when many highly
skilled people sought work and the term seemed like more of a joke than a reality.
But now that the economy is in the midst of an extended boom, the term has made a comeback,
and many of the same challenges and concerns are front-and-center among Talent Acquisition
(TA) professionals.
What has changed, however, is the advent of a new arsenal of practices and technologies that
are disrupting the conventional ways we acquire and keep talent. Organizations that fail to stay
ahead of the curve in using these practices and technologies are more likely to lose the latest
war for talent.
34 The DNA of Human Capital: Trends Report 2019 • Talent Acquisition - DNA Trait 6
Locating and attracting talent is a top HR

Finding 1
concern
In our latest HR and Talent Management Benchmarking Report 2019, we found
that the practice to “recruit talent to support growth” is the most important
area of focus for HR departments in 2019, tied with “employee learning and
development.” In short, 2019 is expected to be all about talent recruitment and
development.
Finding 2 But just attracting talent is not good enough…not by a

long shot
In our How Organizations Identify and Develop Great Talent research, we
asked HR professionals about their most difficult hiring challenges. Number
one was “finding candidates with the skills we need” (selected by 68%), but it
was followed by a variety of other related challenges, including:
●● Wages and salaries not competitive enough
●● Losing promising candidates during the hiring process
●● Poor ability to track and attract candidates who are not actively seeking
new jobs
So, finding skilled candidates is just part of the job. Offering them enough to get
them to sign up is another major challenge, as is being able to locate and woo
passive job candidates.
How good are organizations at maintaining a high quality of hire? On one hand,
over half (55%) report doing a good or excellent job in the area of quality of
hire. On the other hand, HR professionals regret an average of 31% of new
hires, suggesting that there’s immense room for improvement in this area.
Organizations typically fare even worse in other areas, especially cost of hire
and time to fill a position.
Effectiveness and Efficiency Challenges in Talent

Acquisition Today
Survey Statement: Please rate the overall effectiveness and efficiency of

talent acquisition in your organization in terms of:
Percent of HR professionals who rate their talent

acquisition as good or excellent in these five areas
60
50
Just 38%
40
say their
organizations
are good at 44%
30 41%
locating and/or
nurturing pools
of qualified 31% 28%
candidates 20
18%
10
11% 10% 9%
7% 7%
0
Quality of New hire fit Pool of Cost of hire Time to fill a
hire with the qualified position
organization candidates
Excellent Good
The recruitment marketing paradigm has emerged, along with

Finding 3
accompanying technologies
Recruitment marketing (RM) consists of the various activities an organization
uses to find, attract, engage and nurture talented prospects before and during
the application process. The use of the term “marketing” is apt because of
the parallels between the practices we use to engage both consumers and
candidates. The four broad areas of RM include job marketing, employment
branding, candidate engagement and use of a technology platform. Fully 91%
of HR professionals cited in our State of Recruitment Marketing report feel that
RM will become more or much more important in the future.
There are multiple drivers behind RM. Three of the top five are directly related
to technological changes: social media, technology improvements and the
need to integrate online recruitment tools.
Drivers of Recruitment Marketing
Survey Statement: What trends do you think are primarily behind the
growth of recruitment marketing? (select all that apply)
The growing importance of social media 67%
Stiff competition for talent 67%
Very few The entry of the Millennial

generation into the workforce
63%
respondents
indicated that Technological improvements 59%
media hype The need to integrate online

55%
is driving the recruitment tools
growth of The tightening of today’s labor market 52%

recruitment
marketing Paradigm shifts about how
employers view recruitment
45%
Media hype about such solutions 16%
Other 2%
0 10 20 30 40 50 60 70
Pre-hire assessments have come into their own

Finding 4
Almost all organizations use background checks, interviews, and reference
checks as part of the hiring process. However, while essential, they are often
insufficient. As we mentioned above, HR professionals regret an average of
31% of new hires.
To help with hiring quality, some companies have turned to the use of pre-
hire assessments, indicates The State of Pre-Hire Assessments report. Such
assessments can take many forms, from psychometric tests to in-depth
behavioral simulations. Organizations that use pre-hire assessments report
multiple benefits, as shown in the figure on the next page.
For example, 90% said it helps them recruit higher quality candidates, and
another 67% said they are able to do a better job at screening large volumes of
candidates. Yet, most organizations rely on these assessments very selectively,
depending on the position. For example, only 44% of organizations are using
pre-hire assessments for professional positions. Similarly, only 39% use them
for technical hires and just one in three for executive positions.
The question that companies need to answer is whether a higher usage of

assessment tools could help them reduce the number of regrettable hires they
make each year.
The Benefits of Pre-Hire Assessments
Survey Question: To what extent do you agree with the following

statements about your pre-hiring assessment process? [percent strongly
agree and agree]
It enables us to hire Total

quality employees 33% 57% 90%
It is an effective Total
screening method for 20% 47%
managing volume 67%
Pre-hire
assessments
should also It predicts a new Total
be capable employee’s future 16% 50%
performance 66%
of boosting
recruitment
efficiency
It saves administrative Total
and managerial time 14% 45% 59%
It allows us to fill Total

9% 31%
vacancies more quickly 40%
0 20 40 60 80 100
Strongly agree Agree
Artificial intelligence (AI) is beginning to transform talent

Finding 5
acquisition, with more to come
Imagine a job opens in your organization. You inform your applicant tracking
system that the position is open and a few minutes later you receive an ideal
list of candidates. Imagine that along with each recommended candidate
comes a profile matching their experiences and skills with those required for
the position. Imagine your system could give you a score on the likelihood the
candidate will succeed in the position as well as their retention risk.
This represents some capabilities that recruitment experts would like to see
from the application of AI to talent acquisition. HR.com’s How Organizations
Identify and Hire Great Talent found that HR professionals want a range of
outcomes to emerge from AI usage:
●● Fill open positions faster
●● Improve match between candidates and jobs
●● Spend less time sifting through resumes
●● Improve candidate experience during the hiring process
●● Identify the best internal candidate
●● Reduce hiring regrets
●● Increase diversity of new hires
●● Reduce recruiting advertising spend

The revolution will continue

Finding 6
Nothing in HR stands still for long these days, particularly in areas where
technology plays a significant role. Let’s take the topic of recruitment marketing.
The figure below shows the ways HR professionals expect it to evolve over the
next several years, with greater automation and predictive analytics being at
the top of the list.
Predications for Recruitment Marketing
Survey Question: In what ways do you expect recruitment marketing to

evolve in the next several years? (select all that apply)
There will be greater automation of the

61%
talent acquisition process
Predictive analytics will

61%
become more important
Automation, The idea of building talent

57%
predictive pipelines will grow
analytics
Artificial intelligence will
and artificial play a growing role
50%
intelligence are
among the top It will be more future-focused
49%
ways RM will than present-focused
evolve over the There will be a rise in the
next several number of candidate “touch 47%
points” before employees apply
years
Roles within recruitment marketing
will become more specialized 42%
There will be a growing number of calls 36%

to action aside from “apply for a job”
There will be a decline in interest

3%
as it becomes less fashionable
Other
2%
0 10 20 30 40 50 60 70
Key Takeaways
1 Start with an audit of your talent acquisition processes

There are dozens of ways to improve traditional TA processes. Before adopting new
strategies and tactics, however, first take a step back and do an audit. Determine your
biggest pain points. Is it having a qualified pool of candidates? Accuracy of your hiring
decisions? Speed? Retention? Look at the metrics you currently have in place. Are
they the right ones? Look at the technologies you are using and determine if they are
the best ones for addressing your organizational pain points. Explore the ways in which
new technologies can help you in the future. You should then use the results of your
audit to prioritize next steps.
2 Take a broader view of talent acquisition

HR, managers, executives and employees themselves are all the clients of the TA
function. Get their point of view. What would they like from TA that they’re not yet
getting? How seamlessly does TA interact with other functions, such as onboarding,
learning and development, performance management, engagement and retention? In
the long run, these all work together as part of the employee life-cycle.
3 Simultaneously work on speed and quality

When they must choose, organizations typically choose quality over speed. But
extended acquisition processes mean key positions remain open and can have the
potential of turning off candidates who may have multiple offers on the table. Newer
technologies can help with both speed and quality. Developing an external talent
pipeline of potential candidates who are nurtured over time should be part of your
solution as well. And broader use of pre-hire assessments might significantly shorten
the time it takes to hire quality people.
4 Stay current with the technologies

TA technology continues to advance at a rapid pace. Fresh solutions emerge daily,
including social media applications, video interviewing, pre-hire assessments, workforce
planning, artificial intelligence, candidate tracking, recruitment marketing and more. The
trick is to understand how to get the most out of these technologies while using them in
ways that complement the rest of HR and the larger organization.
DNA Trait 7
Diversity and Inclusion:

Why Does Simple Implementation Evade Us?
T he good news? Diversity and Inclusion (D&I) has become a somewhat higher HR priority
over the past several years in light of a combination of changing legislation, the need for our
workforces to reflect the demographics of the consumers we serve, and the bottom line benefits
of D&I itself. But the most important reason to manage D&I well is because it is the right thing to
do. As Mahatma Gandhi taught us, “Our ability to reach unity in diversity will be the beauty and
the test of our civilization”.
Unfortunately, despite some progress, we are failing Gandhi’s test in many ways.
Here we will highlight findings from several different HR.com studies, taking a broad look at D&I
progress, barriers and best practices. We will also specifically explore gender diversity along
with one of the biggest barriers to progress: workplace sexual harassment.
43 The DNA of Human Capital: Trends Report 2019 • Diversity and Inclusion - DNA Trait 7
Various factors are making D&I more important

Finding 1
In our Workplace Diversity and Inclusion: Emerging Awareness and Best
Practices report, participants were asked to rate the strategic importance of
several D&I program facets. Three topped the list:
●● the importance of their workforce demographics reflecting the customer

base
●● the belief that D&I enhances how employees interact with one another
and contribute
●● the notion that D&I should be visible and important to all employees
Finding 2 Most organizations have not yet reached a higher maturity level
when it comes to D&I practice
In The State of Diversity and Inclusion 2018/2019 study, we asked respondents
to indicate their level of D&I maturity. The figure below includes a definition of
each stage along with the corresponding response. Only 20% have practices
that are at the Vanguard or Advanced stages. About half put themselves into
the Underdeveloped or Beginning stage.
We also asked participants to rate the overall effectiveness of their D&I efforts
on a ten-point scale. Only 23% indicate they are on the high end of the scale,
assigning a rating of 10, 9 or 8 to their programs. D&I is hardly a new issue and
these findings are, in our opinion, a cause for alarm.
The State of D&I Maturity in Today’s Organizations
Survey Questions: At what stage of development is diversity and inclusion

(D&I) within your organization? (select the one that best applies)
7%
Only 7% have 13% 24%

practices that
are at the Underdeveloped stage
Vanguard stage Beginning stage
Intermediate stage
Advanced stage
Vanguard stage
28%
27%
There is no gender parity at leadership levels

Finding 3
Although women make up nearly half the U.S. workforce, they have a miniscule
representation in some key corporate leadership realms. For example, as of
January 2019, there were 25 female CEOs of S&P 500 companies. Therefore,
they are about 47% of the workforce but 5% of the top business leaders.
HR.com’s latest research confirms that there’s a problem among organizations.

In most respondent organizations (62%), women are less than 41% of leaders.
In nearly a fifth of responding organizations, they are no more than 10% of
leaders.
The “glass ceiling” for ethnic minorities also remains intact

Finding 4
In the U.S., non-Hispanic (or non-Latino) whites make up about 60% of
the labor force, according to data from the U.S. Bureau of Labor Statistics.
Therefore, ethnic/racial minorities are about 40% of the U.S. workforce.
Our study indicates, however, the leaders of most organizations are much less
diverse than the workforce in general. About three-quarters of HR professionals
say ethnic/racial minorities are no more than 30% of their leaders. In fact, 44%
say no more than 10% of their leaders are members of ethnic/racial minorities.
The bottom line is that these diverse populations are vastly underrepresented
in leadership ranks today.
Leaders Who Are Ethnic/Racial Minorities
Survey Question: About what percentage of your organization’s leaders

are ethnic/racial minorities?
44%
40
44% of HR
professionals
report ethnic/ 30
racial minorities
are, at most, 21%
10% of their 20
leaders
13%
10 7% 6%
5%
4%
0
0% to 10% 11% to 20% 21% to 30% 31% to 40% 41% to 50% 51% to 60% 61% or more
A big part of the problem is that organizations are just not

Finding 5
taking D&I seriously enough
Despite the lack of diversity and inclusion among corporate leaders, only 36%
of HR professionals say their organizations have one or more development
initiatives focused on improving D&I in the leadership ranks. In addition, few
(34%) have mandates for making leadership more diverse.
In fact, it appears that managers have few tangible incentives for increasing
diversity. In the large majority of organizations, managers are not even partially
rated, promoted or compensated based on their ability to help the organization
achieve diversity goals.
Program Management Elements - True Response
Survey Question: Which of the following are true or false for your
organization?
We have one or more leadership

development initiatives focused
on or designed for improving D&I 36%
in the leadership ranks
Few managers We have a mandate to increase

34%
diversity in leadership roles
are rated, in
part, by their
ability to reach Our managers are rated, in part,
according to their ability to reach 13%
specific D&I specific D&I goals
goals
Our organization mandates
diversity in some regions 13%
but not others
Managerial promotions
partly depend on 8%
reaching D&I goals
Managerial compensation
levels are partially tied to 6%
reaching D&I goals
0 5 10 15 20 25 30 35 40
Progress in reducing sexual harassment has stalled

Finding 6
Not only is gender parity a long way away, many women have had to deal with
harassment in their work environment as well. Our report, Sexual Harassment
in the Workplace, indicates that only 13% of HR professionals report a
decrease in harassment complaints over the past two years, whereas 15%
say there have been increases. The remainder indicate that the number of
complaints has stayed the same.
We found several concerns around the levels of success organizations are

having with their initiatives to curtail harassment. A fifth report that fewer
than 60% of their employees understand their company’s policies around
harassment. And, only 38% feel their employees would give high marks to the
training they receive in this area. The potential good news is that nearly three-
quarters of HR professionals say their organizations plan on bolstering training
efforts or are considering doing so in the coming year.
Finding 7 Six practices may improve D&I performance

In The State of Diversity and Inclusion 2018/2019 study, we broke our
participant sample into two groups to explore critical differences. The “high
performers” are those that indicated that they were at the Vanguard and
Advanced D&I maturity stages. The “low performers” are those organizations
that indicated they were in the Underdeveloped, Beginning and Intermediate
maturity stages.
High performers are considerably more likely to leverage the following diversity
and inclusion initiatives to a high or very high degree:
Survey Question: To what degree does your organization use the

following diversity and inclusion initiatives?
Percent that Very Highly and Highly Agree
66%
Measure organizational
diversity and inclusion 11%
59%
Require diversity and
inclusion training 18%
Embed the topic of D&I in all 61%

High performers
or most talent-development
focus on many materials 13%
initiatives to be
successful Consistently communicate 74%
the importance of D&I
throughout the organization 16%
57%
Create employee
resource groups (ERGs) 10%
Set annual diversity 66%

goals for whole
organization 10%
0 10 20 30 40 50 60 70 80
High Perfomers Low Performers

Key Takeaways
1 Garner support from the top

Our research indicates that D&I initiatives are more likely to succeed if they are
supported by senior leaders. There are various ways to help build such support, starting
with communication. Seek the help of leaders who already understand that diversity
brings with it various benefits, from higher innovation to improved employee relations.
Then enlist their help in a communication, education and culture change campaign.
2 Define or refine a D&I mission statement

Such a statement can highlight the benefits of D&I, reinforce the organizational
commitment to great diversity and inclusion, and set forth future aspirations.
3 Consider conducting an audit of D&I practices

What is already in place and should be in place? What is already working, and what’s
needed to make diversity and inclusion initiatives more effective? An audit will help
answer such questions.
4 Build or revisit the strategic plan

Identify the steps needed to fulfill the D&I mission. As part of this process, set realistic
goals and objectives for both the short and long term. Identify a budget and other
resources and adjust your timeline accordingly. Based on the timeline, consider
immediate and long-term plans for training, communication, social events, ERGs,
benefits and more.
5 Develop leaders
Leaders who are already knowledgeable and experienced in the areas of diversity
and inclusion can coach and mentor others. Organizations can also create leadership
development initiatives focused on improving diversity in the leadership ranks. Once the
organization develops greater leadership diversity, these new leaders can help nurture
cultures that respect a variety of points of view. Development programs can also be
linked with succession planning programs that help ensure that leadership pipelines
contain diverse groups of high potentials.
6 Reduce sexual harassment not only via training and policies but
through organizational culture change
Cultures must place a premium on diversity and inclusion. This often requires greater
gender diversity in the workforce, especially at the top. The more women in senior positions
in an organization, the less likely leaders are to tolerate harassment. Culture change also
requires leaders at all levels to not only carefully guard their own behaviors but be willing to
take action on cases of abuse and provide support to those who are victimized.
DNA Trait 8
Human Engagement:
Decades Of Seemingly Unremarkable Progress
How is it possible that employee engagement is still so abysmal in so many organizations? After
all, managers and HR professionals have emphasized engagement for over two decades.
They’ve emphasized it because there’s a lot of data indicating

a relationship between employee engagement and various
Poor engagement’s other measures of business success. Yes, there are still
costing one trillion arguments about causation versus correlation, but most HR
dollar business losses professionals think there is solid evidence linking engagement
to performance.
Management consulting company Gallup has even estimated that, on a global level, the
engagement deficit is costing employers trillions (yes, with a “t”) of dollars.
HR.com has conducted its own research on this topic, examining everything from the overall
state of employee engagement to, more specifically, its relationship to factors such as
performance management, rewards, recognition and communication.
It’s impossible to sum up all that information in a few pages, but below are some of the key
insights and a handful of actions that may help move the needle in the right direction.
52 The DNA of Human Capital: Trends Report 2019 • Human Engagement - DNA Trait 8
Most organizations still suffer a serious engagement deficit

Finding 1
Our research found that just 9% of responding HR professionals strongly agree
that their employees give discretionary effort, and only about a third say that
70% or more of their employees are actually engaged. Levels of engagement
vary considerably by size, with smaller companies enjoying higher engagement
levels than larger ones.
Source: The State of Employee Engagement in 2018: Leverage leadership and

culture to maximize engagement
Part of the problem is that HR doesn’t always know

Finding 2 what engagement means
In the HR community, there is no consensus on a single definition of
engagement. Our research shows that HR professionals’ top two choices
of definitions are “employees giving their best at work” and “commitment to
organizational objectives”. These are indeed legitimate engagement definitions.
However, “job satisfaction” and “happiness” were also chosen by a majority of
respondents. In our view, these are engagement outcomes or drivers rather
than part of a core definition. One can imagine, for example, an employee
being happy and satisfied at work but not willing to do his/her best or be
aligned with the organization’s purpose. Without a universal understanding of
engagement, it becomes more difficult to measure, benchmark, and take the
right actions.
Definition of Employee Engagement
Survey Statement: Which of the following do you consider valid definitions

of employee engagement? (select all that apply)
An employee’s willingness
84%
to give his or her best at work
An employee’s emotional
There is commitment to the 76%
organization and its objectives
surprisingly little
An employee’s level
consensus on
of satisfaction with 69%
how to define his or her work situation
employee An employee’s state when
engagement their personal values and goals 65%
were aligned with the organization
An employee’s positive
63%
impact on business results
An employee’s degree
of happiness while 59%
in the workplace
0 20 40 60 80
Finding 3 Good leadership drives up engagement. Lousy leadership

drives it down.
The figure below shows the factors most closely associated with engagement.
The top two choices, “trust in leaders” and “relationship with immediate
supervisor,” occupy the top two spots. Clearly, leadership is the primary
influencer of engagement.
“Organizational culture” takes third place, and this is also a factor strongly
driven by leadership. Only 9% of HR professionals indicate they have strong
cultures. Culture is, of course, influenced by “belief in the organization,” chosen
by 67% of respondents.
Factors Driving Engagement
Which of the following factors are most highly linked to employee

engagement in your organization? (Select all that apply)
Trust in leaders 77%
Relationship with
immediate supervisor 74%
Organizational culture 73%
More than Belief in the organization 67%

anything else,
Opportunities for
leadership and career growth 66%
culture drive Relationship with

63%
employee colleagues
engagement Enjoyment of work 62%
Compensation level 50%
Recognition program 45%
Business transparency 44%
0 10 20 30 40 50 60 70 80
Finding 4 Organizations need to move from adversarial to

dynamic leadership
We asked respondents to choose from five categories—dynamic, productive,
functional, strained and adversarial—to indicate the nature of the employee-
supervisor relationship. Fewer than half chose the two most desirable
categories: dynamic (9%) and productive (34%).
Source: The Impact of Performance Management on Engagement: Engage

employees through effective talent management practices
We then looked at how the nature of the relationship impacts employee

engagement. Just over 70% of the organizations that characterize their
employee-leader relationships as dynamic or productive report elevated levels
of engagement. This number drops by half in organizations with functional,
strained or adversarial relationships as shown in the figure below.
Impact of Leadership Relationship on Engagement
Survey Statement: Our employees are highly engaged in their jobs.

[By Quality of Manager/Employee Relationship]
Whole Sample 8% 44% Total 52%
Three-quarters Dynamic 23% 51% Total 74%

of those citing
dynamic
manager/
employee Productive 11% 60% Total 71%
relationships
say their
employees are 4%
highly engaged Functional + Strained +
Adversarial 33% Total 37%
0 10 20 30 40 50 60 70
Strongly agree Agree
We also explored six leadership skills and behaviors that best characterize
dynamic/productive leaders and their relationship to engagement. The figure
below shows the differences in levels of engagement when leaders use these
skills sets. Every one of these skills set apart those leaders who excel at
engaging their teams compared to those leaders who are less successful. And,
as you can see, the differences are large, with gaps of about 30 percentage
points or more.
Leadership Engagement Skills That Make a Difference
Survey Statement: Rate your organizational leaders on the following

characteristics [percent rating good or excellent]
74%
Build trust by being fair
40%
73%
Foster employee collaboration
37%
70%
Communicate clear
expectations to employees
37%
70%
Recognize superior contributions
43%
68%
Take time to listen
37%
58%
Spend time coaching employees
29%
0 10 20 30 40 50 60 70 80
70%+ of Employees Engaged <70% of Employees Engaged

Boosting engagement may start with metrics, but it can’t end

Finding 5 there
Employers can use tools that measure engagement in order to determine
baselines and benchmarks. Yet, close to half of our sample do nothing to
measure engagement. For those that do measure, 42% report using formal
measures once a year. Thirty-eight percent measure more than once a year.
While a formal survey is the predominate measurement tool, HR professionals

report using a range of additional tools like exit interviews, informal pulse
checks, and monitoring outcome measures like retention, productivity, and
customer satisfaction.
However, moving engagement upwards requires developing action plans

based on survey and informal results along with diligent follow-through. Data in
the absence of action is unlikely to drive any significant changes. We looked at
the relationship between action and engagement. As it turns out, 73% of highly
engaged organizations take forceful actions based on the data, compared to
37% in less engaged organizations.
Finding 6 Yes, most believe that engagement drives business

excellence
Many studies indicate there’s a relationship between engagement and a
variety of other business metrics such as sales, profit and productivity. Our own
research supports this. Ninety-one percent of HR professionals believe there is
solid evidence linking engagement to performance. And, as shown in the figure
below, sixty-two percent of highly engaged organizations report being in the
top quartile of financial performance, compared to 40% in organizations where
employees are less engaged.
Impact of Engagement on Financial Performance
Survey Statement: Please rate your organization’s financial performance

in the most recent fiscal year compared to competitors in your industry.
Over 60% of [by engagement level and percent in the top quartile of financial
performers]
highly engaged
organizations
report being in
Less engaged
the top quartile organizations
40%
of financial
performers in
their industries Highly engaged
62%
organizations
0 10 20 30 40 50 60 70 80
Key Takeaways
1 Start with reliable measurements repeated regularly

Both formal and informal measurements are a starting point for any organization serious
about engagement. Measurement allows you to focus in on the critical barriers to
engagement (as well as your strengths) and measure progress over time. Without it,
you are flying blind.
2 Develop solid action plans and track progress

As important as measurement is, a lack of action is a sure way to guarantee poor
progress. In fact, asking employees for input in the absence of serious efforts to
change is likely to make things worse. One Fortune 500 company does it right. Survey
feedback is given throughout the organization. Individual business units and teams
know where they stand relative to one another and outside benchmarks. Suggestions
for improvements come from the entire organization and are put into required action
plans. The plans are reviewed by HR and leaders to ensure progress through each
measurement cycle with checks along the way. As a result, engagement scores have
gone up six percent over a two-year period.
3 Emphasize and develop better leadership

Leadership comes up repeatedly as a vital component of engagement. Interestingly,
engagement scores often vary more between departments in a single organization than
between two separate companies in the same industry. Some of the variability may be
due to the nature of work from one department to the next. But we know that leadership
also plays a key role. Systematic and on-going training needs to be provided to leaders
to hone their skills. Teams with consistently low engagement scores may need to
consider replacing their leaders. And, organizations should consider promoting people
who are more likely to have the right engagement skill sets.
4 Adopt predictive analytics

As with other areas of HR, using predictive analytics might take a lot of the guesswork
out of improving engagement. The right tools along with asking the right questions
reveal which engagement factors are more critical for a organization or team. And, it
will reveal the relationship between the actions we plan on taking and their likelihood of
improving engagement.
DNA Trait 9
HR and Workforce
Technologies:
The Transformation Is Embryonic
H
R technology is almost unrecognizable since the introduction of automated payroll and
time tracking systems in the 70’s. Today, human capital management (HCM) systems—
which can be integrated with enterprise resource planning (ERP) platforms—often serve
as the engine behind an array of HR responsibilities, from acquiring to retiring today’s workforce.
61 The DNA of Human Capital: Trends Report 2019 • HR and Workforce Technologies - DNA Trait 9
Moreover, the pace of change is only accelerating. Apps clutter the

marketplace, some of them part of a larger system and others serving as single
point solutions. Many have mobile capabilities. This means that employees can
manage their wellness, receive instant feedback from colleagues, and learn
what they need on the spot—all from the convenience of their smart devices.
Other promising advances are on the horizon or still relatively new to the
marketplace. They include applications that harness predictive analytics,
artificial intelligence (AI) and even augmented or virtual reality. Together,
these technologies hold the promise of more efficient HR processes and more
productive workforces.
In this chapter, we look at findings across multiple HR.com studies focused on

HR and workplace technologies.
Finding 1 Smart technologies are transforming the workplace

Before delving into specific HR technologies, let’s look at the bigger picture: the
role of technology in the workplace of the near future. In our Workforce 2020
study, we asked survey participants to choose from a series of items that may
change the near-future workplace. The item that was most widely selected was
“smart technology,” followed by “employee expertise requirements.”
We view these areas as complementary. The successful implementation and

use of smart technologies will require experts who can get the most out of such
technologies. Think, for example, of the types of employees who can make the
best use of new data-analysis or engineering technologies. But the reverse is
also true: smart technologies will increasingly enable employees to enhance
and amplify their capabilities.
Finding 2 HR technologies that aid analysis and promote self-service

will play major roles
In The Advancing HR Function research, we asked HR professionals to identify
areas in which technology will play the greatest role over the next several
years. Their top answers were analytics and employee self-service, followed by
learning, talent acquisition and performance management.
Of course, employee self-service technologies are already common in today’s

organizations. In fact, in HR.com’s The Role of Self-Service Software report,
we found that 86% of respondents said that self-service portals are the most
efficient way of providing employees with payroll and HR information. It also
found that over half of respondents used self-service portals for multiple
purposes, from accessing payroll information to tracking time and enrolling in
benefits. The use of self-service applications should continue to expand into
many other functions in the coming years.
Analytics, by contrast, remains a major challenge in the HR field. Our research

shows that only a fifth of organizations consider themselves good or very good
in their ability to gather, evaluate, visualize and share high quality analytics.
The hope is that new technologies, perhaps leveraging AI capabilities, will help
HR become more adept at analytics.
Finding 3 HR technologies are improving, but we still have a long

way to go
Since their introduction, tech-based HR solutions have often received scathing
reviews. Bugs were too common and the ability to integrate platforms was often
difficult if not impossible. Two-thirds of HR professionals responding to our
survey on HCM technology said they would recommend their current system to
peers. Of course, that still leaves a lot of unhappy customers, but it’s a sign that
these technologies improved over time.
Finding 4 A lack of alignment and clear vision can stymie HR

technology initiatives
In order to deliver strategic human capital management across an organization,
there needs to be three key elements: HR leadership support, a clear vision of
the future, and a sound change management process. With any one element
lacking, the risks of failure are higher.
The figure below shows how well organizations are doing in these areas.
Only one-third feel there is a clear vision of their future technology blueprint.
Similarly, only 34% feel there is a strong change management process in
place. These two problems are prevalent among responding organizations, so
they are areas where the committed HR leader must focus if she or he is to
successfully implement HCM technology.
Key Technology Enablers
We have a clear HR leader who is committed to delivering strategic

HCM across the organization
33% 32% 19% 10% 5%
We are very happy with our technology blueprint & how it’s aligned to
manage the people side of our business
HR
leadership 8% 22% 33% 27% 11%
does not
appear to We have a clear vision of the technology blueprint we need to deliver
state-of-the-art technology to our employees
translate
into strategic 6% 27% 32% 25% 10%
execution and
alignment We have a clear vision of the change management and the people required
to deliver a best-in-breed HCM technology blueprint to our employees
7% 27% 31% 25% 10%
Strongly Agree Agree Neither Agree nor Disagree

Disagree Strongly Disagree
Finding 5 AI is becoming integral to a variety of HR technologies
The Oxford English dictionary defines AI as “the theory and development of

computer systems able to perform tasks that normally require human intelligence,
such as visual perception, speech recognition, decision-making, and translation
between languages.”
This technology is impacting nearly every single sector and function. It is backed
by over $5 billion dollars in venture capital, a number that is expected to rapidly rise
in the coming decade. In 2017 and 2018, HR.com conducted a longitudinal study
on the topic of AI in the HR function.
When it comes to knowing how to leverage AI for talent management, HR

professionals are playing catch-up. In 2017, only 36% of respondents moderately
agreed or strongly agreed that they were knowledgeable about AI. In 2018,
that number rose to 43%. There is still a long way to go before the average HR
professional is highly knowledgeable about AI, but this is an encouraging trend.
In 2017, just 9% of respondents strongly agreed they were knowledgeable about
using AI in HR, a number that rose to 14% in 2018.
The good news is that respondents see the vast potential of AI in the future. Today,
only 10% of companies report making high or very high use of AI for HR. This
number explodes to 46% when HR professionals were asked to look out just five
years into the future.
The top four features HR wants to see in AI-powered applications are the ability to
analyze, to predict, to personalize and to diagnose. We also asked respondents
to indicate the degree of AI’s impact across five HR areas both now and five years
into the future. As shown in the figure below, the expected adoption rates are
enormous.
The Future Importance of AI
Survey Question: How important is AI to this HR area and how important

do you expect it to be in five years? [percent answering “important” or
“very important”]
80 76%
75%
73%
70
69%
64%
HR 60
professionals
predict 50
dramatic
increases 40
34%
in the 30% 29% 29% 28%
importance 30
of AI in six
areas 20
10
0
Overall HR Analytics & Employee Learning & Recruitment &
Technology Metrics Productivity Development Selection
Today In five years
Key Takeaways
1 Increase HR’s technological savvy

HR professionals are good at many things. But many entered their jobs without the
expectation they would need to be experts in the selection and use of increasingly
sophisticated technology. HR teams will need to up their game, learning new skills and
acquiring new knowledge. They will need to quickly grasp how technology can transform
their function and, in turn, their workforces.
2 Develop a future-focused blueprint for HR technologies

A longer-term vision for use of HR technology is critical. HR applications change almost
daily, but time and money are limited. Start with the more immediate challenges or
opportunities being faced by your function and the organization. Carefully investigate
each supplier you choose in terms of both the quality of the solution, the maintenance
costs, and the ongoing support they provide.
3 Get better at managing change

Many HR professionals have skills in organizational development and change
management. These skills will come in handy when implementing software solutions.
After all, these solutions often require changes in behaviors, mindsets and skill levels.
Too often, technology initiatives get bogged down because planners did not do their
jobs as implementers and change managers.
4 Get ready for smart technologies and AI-augmented work processes

Of course, technological change is not limited to HR. It will impact the large majority of
jobs. HR needs to become better at understanding how smart technologies will change
jobs and the workplace. The stakes are high since the proper implementation of the
right technologies can have a huge impact not only on corporate performance but on
overall business strategies.
No one can predict exactly how AI will impact specific jobs. In their recent book,
Reinventing Jobs: A 4-Step Approach for Applying Automation to Work, Ravin
Jesuthasan and John Boudreau argue that you cannot completely grasp the impact of
automation (including AI) at the job level. Its impact is at the task level. For example, we
might see AI handling the task of screening resumes without taking over the job of the
recruiter. Through this lens, we see AI automating tasks and augmenting jobs.
In the near future, HR must become better at understanding these distinctions and at
helping their organizations to get the most out of people who are augmented by and
partnered with smart technologies.
DNA Trait 10
The HR Function:
HR Must Quickly Realign With New
Roles and Realities
This a typical conundrum related to HR’s reputation.
In its 2018 “100 Best Companies to Work For” issue, Fortune magazine published an impressive
array of stories on what organizations are doing to engage their talent. In many of the “100 Best”
stories, HR likely plays a key role. But was the HR profession cited as a constructive force?
Not so much. Instead, that same issue produced the feature article “HR Is Not Your Friend.
Here’s Why.” The premise of the article is that HR works primarily to protect the interests of the
company and senior management team rather than of employees in general.
68 The DNA of Human Capital: Trends Report 2019 • The HR Function - DNA Trait 10
Although the article takes HR to task for many of the ills in the modern
workplace, it also notes that “many [HR professionals] point out—and
employment lawyers do too—that you don’t read about the many everyday
cases in which HR does its job well.”
In order to better cope with this conundrum, HR needs to take stock of what
it does well and what it could and should do better. In this section, we take
a deeper look at what HR does well, what it should do better, and how it
might improve.
Finding 1 HR knows it’s not well prepared for the future

In our 2018 The Advancing HR Function report, we found that only 27% of
responding HR professionals said their functions were well prepared to thrive
over the next three to five years. Similarly, in our Workforce 2020 report, only
11% of the respondents said they’d made significant progress toward building
a workforce capable of meeting their 2020 business goals. Generally speaking,
HR has a lot of work to do quickly in order to prepare itself and its workforces
for the near future.
Finding 2 What HR doesn’t know is the extent of its identify crisis

In The HR Blindspot Report, we gathered and contrasted perceptions from
HR professionals and employees. We discovered that, generally speaking,
HR does not view itself in the same way that employees do. We defined three
typical HR roles: Regulator, Advocate and Strategist. Although HR must play all
roles well, it most commonly views itself as a Strategist. Employees, however,
most commonly see HR as filling the role of Regulator. In other words, there’s
a serious disconnect here. If HR is going to succeed in the future, it will need
to convince the rest of the workforce that it is more than a rule-enforcer and
paper-pusher.
The Three Roles of HR
Survey Question: Which of the following best describes the role of HR in

your organization?
60
56%
50
43%
40
35%
30
26%
22%
20 18%
10
0
HR’s role is one of HR’s role is one of HR has a strategic
enforcement or employee advocate, role and is influential
administration and can sometimes in determining the
(Regulator) persuade future direction of
management to better the organization
serve employee needs (Strategist)
(Advocate)
HR’s View Employee’s View

The future will require greater HR competencies

Finding 3
In The State of HR Skills and Education report, we discovered that HR suffers from
some major skills gaps. In the original survey, we asked two questions:
●● How important are the following skills to you, within your HR job?
●● How would you describe yourself at the following skills?
The figure below shows the difference between the two ratings. In all cases,
there are significant gaps between the professed skills levels and the degree of
importance. The four largest skills gaps were in the areas of:
●● understanding and using HR data

●● making business decisions and recommendations
●● providing leadership in organizational activities
●● managing people’s interactions
These findings suggest why HR is not widely viewed as being a Strategist. Not
only do HR professionals tend to lack skill at understanding and using data, they
are not good enough at making business decisions and recommendations. If
they wish to be viewed as a Strategist by employees and, perhaps even more
importantly, by high-level leaders, they will need to “skill up” in certain key areas.
HR Skill Gaps
Survey Question: Analysis of Skill gaps: Skill importance [percent very

important or important] minus skill level [percent expert or proficient]
Understanding and using HR data
27 percentage points
Making business decisions and recommendations

The smallest
skills gap is in
communicating
effectively, Providing leadership in organizational activities
which was also 16 percentage points
rated as the
most important
Managing people’s interactions
skill
Modeling core organizational values

Considering the perspectives and background of all parties

Providing advice and direction

Communicating effectively
0 5 10 15 20 25 30
Percentage point differences

Finding 4 There are various paths to “skilling up” in the future

We examined the various factors that separate those who consider themselves
experts versus those who consider themselves as less proficient. Experts are far
more likely than others to:
●● have ten or more years of experience

●● hold a master’s degree
●● have HR certifications
●● engage in professional development
●● be able to provide advice and direction, make business decisions, and
provide organizational leadership
In short, being an HR expert requires a commitment to education and development

as well as a willingness to serve as a business leader, not just an HR manager.
HR plans for a more strategic HR function, but it had better

Finding 5
start working harder to get there
HR professionals may not be prepared yet, but they overwhelmingly feel that they
need to move from an administrative past to a strategic future. In fact, only 8%
expect HR to stay the same over the next five years. Half indicate that HR will
be transformed into a much more strategic function, and another 39% thinks the
function will split in two: one that handles strategic issues and another that handles
administrative issues.
Five-Year HR Transformation
Survey Question: How do you think HR will change over the next five to
ten years? (select one)
HR will be transformed into a much

more strategic function as
50%
administrative duties are automated or
Half of
outsourced to others
respondents
believe HR will
HR will divide into two functions one
be transformed that handles strategic issues and the 38%
into a more other that handles administrative issues
strategic
function as
it leverages HR will pretty much stay the same, with
8%
relatively minor changes
automation
and
outsourcing HR will largely disappear due to
automation, outsourcing, and 2%
other factors
0 10 20 30 40 50
Key Takeaways
1 Place an even greater emphasis on HR learning

HR professionals must take control over their own development. Not only do they need
to hone their functional skills, they must ramp up their expertise in business skills and
strategic thinking. HR leaders cannot maximize their value unless they master the same
skills required of any successful general manager. They must create insights around
their organization’s talent capabilities, and senior leadership needs to view these
insights as indispensable.
2 Become more knowledgeable about HR technology

Technology is moving to the front and center for all corporate functions, including
HR. New and improved HR applications pop up regularly across every phase of the
talent life-cycle. Used wisely and strategically, these technologies can increase both
HR effectiveness and efficiency. But it can be daunting to decide which of these
technologies will have the highest payoff and how to best implement them. To make
better purchasing and implementation decisions, HR professionals require greater
technological and project-management savvy.
3 Embrace talent metrics, analytics and the tools that make analytics
more powerful
High-quality metrics and analytics give HR professionals the power to answer the two
critical questions from senior executives: Do we have the quality and supply of talent
to meet our future business goals, and which of the multiple HR practices that are
available will have the highest payoff? To be a strategic player, HR must be able to
supply the answers.
4 Get involved in strategic planning before final decisions are made

An excellent HR professional can anticipate the role that talent will need to play in
driving the business forward. Every year, most organizations spend hundreds of hours
on strategic business planning. Too often, these plans are made in the absence of
a knowledgeable and data-loaded talent-management professional. Therefore, the
connection between business strategies and the talent required to execute them is
often lost in translation. Instead, HR is asked to prepare workforce plans after strategic
planning been completed. This leaves HR leaders holding the proverbial bag when
business plans fail due to a lack of an educated talent-management perspective. Top
HR executives need to ensure that they are involved at the early stages in order to
maximize the chances of strategic-planning success.
DNA Trait 11
Workforce Planning:
Talent Remains The Most Crucial
Of Commodities
A s we navigate through the Fourth Industrial Revolution, one factor remains constant:
talent is the most crucial factor driving business success. The key to ensuring that we
have enough of the right talent is workforce planning. But effective workforce planning has
never been more difficult because the speed of change makes any sort of long-term forecast
difficult at best.
Here we will highlight several key findings across multiple HR.com studies, looking at
what organizations are doing to build future talent supplies. We have divided the findings
into three categories. The first is workforce planning, which covers the bigger picture
of enterprise-wide forecasting for all employees. Second is succession planning, which
focuses mainly on preparing our future supply of leaders. Third is career planning, which
occurs more at the individual level, helping all employees identify and prepare themselves
for new roles.
76 The DNA of Human Capital: Trends Report 2019 • Workforce Planning - DNA Trait 11
Workforce Planning
Finding 1 Technology Problems Hinder Workforce Planning

When respondents were asked if they considered their workforce data
accurate, 41% responded no, according to HR.com’s Human Capital
Management Practices report. Even where workforce data is accurate,
however, it may not be readily available. Nearly half (46%) of HR professionals
say they do not have access to the data they need for proper workforce
planning. On the positive side, 70% of respondents feel that it is possible to
model workforces in a way as to optimize cost, profits and productivity. But
there is a large gap between could do and actually doing.
Why is workforce planning data so often inaccurate or inaccessible? It

often boils down to technology issues. “Technologies that do not share data
effectively” are the most commonly cited workforce planning challenge. Nearly
two-thirds of HR professionals cite this problem, according to HR.com’s
Workforce Planning report.
Succession Planning
Finding 2 Succession Is Critical But Maturity Levels Are Low

Like workforce planning, the goal of succession management is to ensure a
steady supply of ready-now talent tied to long-range plans. Yet, only 58% of
large organizations (over 1,000 employees) and 29% of smaller organizations
have a formal succession process in place. Worse, just 34% strongly or very
strongly agree that their approach to succession is effective, according to The
State of Succession Management 2019.
When companies do put a system in place, it is usually aimed at top level

positions. Fifty-eight percent of HR professionals provide succession planning
for executives, 54% for middle management, and 43% for high potentials.
The number drops to 31% for front-line supervisors. In one sense, this is not
surprising given the risk of talent gaps at the most senior levels. On the other
hand, the supply of higher level leaders usually comes from a strong talent pool
of leaders or potential leaders lower in the hierarchy.
Finding 3 Subjectivity Remains A Danger

Many organizations put in place a pool of high potential employees as part of
their overall approach to succession. These pools include a subset of leaders
chosen for their ability and motivation to take on more senior roles in the future.
They usually have access to richer development experiences, job rotations
and mentorship/coaching. One of the challenges for successful high potential
programs is ensuring an objective and consistent process for identifying high
potentials in the first place. The figure below shows the most common methods
used for the identification of high potential employees. “Nomination by senior
leaders” tops the list, followed by performance indicators, high-potential
designations, and nominations by direct managers. The problem is that many
criteria are subjective. Ask a group of senior leaders to define “potential” and
each will have their own opinions that may well vary from the opinions of
their colleagues. The misidentification of high potentials can be costly. When
identifying high potentials, only 29% use a talent matrix, and just 19% use
behavioral assessment tools.
Survey Question: What criteria do you use to identify “High-Potential”

candidates?
Nomination by senior leaders 62%
Performance indicators (e.g.,

51%
performance appraisals)
Designation as a
47%
high-potential employee
Nomination by direct manager 46%
Identification by a talent
29%
matrix (e.g. nine-box)
Identification by a succession
management team or panel 28%
Behavioral assessments
19%
(e.g., DiSC)
Other 5%
0 10 20 30 40 50 60 70
Finding 4 Better Succession Plans Are Linked to Better Management

There is a considerable difference in the use of practices that differentiate
organizations that have an effective succession planning process and those
that do not. Effective ones are much more likely to have senior management
support and involvement (89% versus 45%). Seventy-two percent of
organizations with an effective system say their process is well-defined,
compared with just 15% of those with less effective programs. And, 54%
of organizations with an effective system formally assess their future high
potential leaders, versus 36% in organizations with less effective processes.
Career Planning
Finding 5 Career Planning Grows More Important But Adoption Lags

The management practice known as career planning helps both the employee
and the organization. It helps employees to keep their skills up-to-date and
advance their careers. For employers, it helps build a supply of talent that
will more effectively enable the organization to compete. Forty-eight percent
of our respondents indicate that career planning is more important today
than three years ago. Only 9% indicate that it is less important. Why? Most
respondents believe that career planning is associated with better retention
and engagement and helps them attract top-notch talent.
But respondents also indicate they have a long way to go before career
planning becomes a keystone HR system. Only one in three HR professionals
feel that their employees are satisfied with their career development
opportunities. And, as shown in the figure below, just over 11% of organizations
feel that career planning is approached as a serious initiative with published
career ladders and widely available resources. For the remaining 89%, career
planning is a taboo subject or approached sporadically and only in pockets.
Survey Statement: In my organization, career planning is approached as:
Something that happens in pockets for those who request

38% it or are most vocal about needing more support.
Few 28% A process handled as a general subject with training courses/

workshops on setting goals, preparing for interviews, etc.
organizations
treat career 11% A serious initiative with published career ladders and widely
available resources.
planning as
a serious 11% Almost a taboo subject because employees develop false hope
and then are upset when they are not promoted
initiative
11% Other
0 20 40 60 80 100
Finding 6 It Helps If HR Is Involved

We divided respondents in one study into two cohorts, one where respondents
indicated their organizations have top-notch career development systems
(high performing systems) and one where respondents felt their organizations
disagreed or were neutral about the quality of their career development
systems (low performing systems).
The figure below shows the differences between these two cohorts across
seven barriers. Of note is that the prevalence of barriers is far more common
among those organizations with poorer career development systems. Two of
these barriers were chosen by over 60% of those organizations with poorer
systems: lack of career coaching skills among leaders and a lack of formal
career tracks.
In a different study, there was another barrier that causes us some concern:
a lack of HR support. Only 46% of our sample indicate that they are excited
about the potential impact that career planning activities could have on their
organizations. The remainder were either neutral or had little interest in career
planning. It is hard to imagine career planning being successful without HR
leading the way.
Survey Question: In your organization, what are the primary barriers to

effective career development? (select all that apply)
Lack of career development 42%
coaching skills among leaders 65%
32%
Barriers to Lack of formal career tracks
62%
effective Lack of proper organization 22%
career 57%
development Lack of senior level support 24%
51%
are far more 62%
Lack of time among employees
prominent 43%
in low- Lack of metrics 27%
40%
development
24%
organizations Lack of interest
29%
7%
Other
13%
0 10 20 30 40 50 60 70
High performing systems Low performing systems
Finding 7 Top-Notch Career Development Systems Make a Difference

We found several career development practices that distinguish those
organizations with top-notch systems when compared with those with less
effective systems. The table below shows the effectiveness ratings between the
two cohorts on 12 different career development practices and programs. Once
again, organizations with top-notch systems were more effective than those
with poorer career planning approaches across every item often by a factor of
three or more. The top-notch cohort is also more likely to report they have a
more disciplined approach to career planning and invest more than double in
employee training and development.
At the end of the day, better career planning impacts company performance.
The high performing system cohort were 80% more likely to report above
average employee engagement when compared to those organizations with low
performing systems. And, they were 60% more likely to report above average
employee productivity and 51% more likely to report better financial performance.
Survey Statement: Rate the effectiveness of these career development

programs and practices in your organization. [Percent rated very effective]
9%
Coaching
32%
Individual 6%
development plans 31%
Learning 4%
Only 18% of
management system 30%
development-
focused 9%
organizations Mentoring
28%
identified
corporate 3%
universities Succession planning
27%
as being a
highly effective 10%
Cross-training
method 25%
for career
development 8%
“Stretch” assignments
23%
4%
Job shadowing
22%
Job enlargement 4%
and enrichment 22%
2%
Job rotation
19%
2%
Corporate universities
18%
2%
Assessment centers 15%
0 5 10 15 20 25 30 35
Low performing systems
High performing systems
Key Takeaways
1 Move from guesswork to analytics

Best-in-class workforce planning approaches must be based on accurate evidence-
driven decisions. But this requires more than just collecting mounds of data. It requires
HR professionals who can turn this data into real insights and recommend specific
courses of action that lead to improved supplies of talent.
2 What will be is more critical than what is

Most workforce planning data focuses on the present. Statistics on turnover, time to hire,
engagement, performance appraisal ratings and more tend to dominate planning analyses.
Such data is key, but even more value may be gained by using predictive analytics to
engage in workforce forecasting as opposed to just planning. HR can engage in forecasting
by using data to frame questions such as whom will be likely to perform well three to four
years out, does the organization have the leadership talent needed to start a totally new
business, and which training interventions are worth the spend. Over the next three to five
years, new artificial intelligence (AI) solutions will add more and more value to helping
firms make these strategic predictions with greater accuracy.
3 Expand thinking about high potentials

High potential programs should be expanded in two ways. First, systems need to put
in place for early career leaders. These leaders are the farm teams and will eventually
be chosen to fill key strategic positions. Second, senior leaders need to do a better job
of uncovering hidden talent. Those with high visibility assignments tend to be chosen
for high potential programs over those who are doing their jobs more quietly but are
every bit as capable. For some key future positions, finding those with unique skills and
behaviors that don’t quite fit the mold may be far better choices.
4 Consider devoting more resources to career planning

One of the biggest drivers of employee retention is the opportunity to continually learn.
Many employees consider career development a key factor when choosing where they
want to work. A second driver is the speed at which the nature of work is changing.
Sound career planning systems will ensure that workforces have the up-to-date skill
sets needed to keep businesses moving forward.
DNA Trait 12
The Human Experience:

HX Occupies The Epicenter
Of Productive Talent
O ver thirty-five years ago, a former CEO of Scandinavia Airlines, Jan Carlzon, put in
place a systematic approach to building customer loyalty known as “Moments of Truth.”
Like most management trends, it became popular for a while then seemed to disappear.
But not for long! The basic concept is back with a vengeance in what is now known as CX or
“customer experience.” In simplest terms, CX is a process by which an organization identifies
and maximizes every touch point a customer has with an organization. Like a chain, one broken
link can negatively impact consumer perceptions and, ultimately, buying behavior.
85 The DNA of Human Capital: Trends Report 2019 • The Human Experience - DNA Trait 12
In recent years, a sister process has emerged called EX, or employee

experience. Like CX, EX is the sum of every interaction an employee (or
job seeker) has with their employer, from recruitment to the end of a career.
Some thought leaders have taken the concept a step further, moving from
the concept of employee experience to that of human experience, or HX.1
It is a fresh approach that holds the potential to transform HR by looking at
employees both as members of a given organization and as individuals with
unique needs. Here we touch on various research findings relevant to HX
from an array of our research reports.
Finding 1 HR Knows It Needs Help on the HX Front

The HX experience will be partially shaped by the HR systems we have put
in place in our organizations. Be it succession management or L&D, the
perceived quality of these systems will directly impact the HX. However,
via a variety of research studies, we have found that large proportions of
HR respondents are not enthusiastic about the HR-related practices their
organizations have in place.
Key Talent Management Systems
Talent System HR Perception
Learning & Development 17% strongly agree L&D is excellent
Diversity/ Inclusion 20% have advanced programs
Quality of Leadership 20% of leaders possess effective skills
Performance Management 23% very effective/effective
Talent Acquisition/Recruitment 24% get high marks
Career Development 30% agree/strongly agree employees are satisfied
Succession Management 35% effective

Reward & Recognition 50% satisfied with approach
Teams and Teamwork 64% excellent/good teams
Taken as a whole, is it any wonder that many companies struggle to attract,

engage and retain top-notch talent?
1 Volini, E., Roy, I, Schwartz, J., Hauptmann, M., Van Durme, Y, Denny, B, Bersin, J. (2019, April 11).
From employee experience to human experience: Putting meaning back into work. Deloitte Insights.
Accessed from https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2019/workforce-
engagement-employee-experience.html
Finding 2 Poor HX = Poor Engagement

While employee engagement overlaps with HX, they are not one and the
same. Some of the practices that impact engagement are, however, also likely
to impact HX. In many ways, engagement is an outcome indicator of positive
employee experiences. Our data in DNA Trait 8 show us we still have a long
way to go. A mere 9% of HR professionals strongly agree their employees are
committed to their organization and willing to give their best at their jobs, hardly
indicative of strong workforce experiences.
Finding 3 Total Rewards Are Often Unrewarding

Compensation, rewards, benefits and recognition (aka, total rewards) have
a tremendous impact on HX. But that impact can easily become a negative
one if an employee views those rewards as unfair compared to those received
by peers. This isn’t just about salaries and bonuses. A lack of frequent
and immediate praise for “a job well done” can quickly fester into a sore!
In fact, only about a third of HR professionals believe that their rewards
and recognition programs have a significant positive impact on employee
engagement, showing how difficult it is to run these programs well.
Finding 4 Cultural Misfits Are Common

Corporate culture can have a huge impact on HX. Culture is really the
personality of the company, and it includes mission, values, expectations and
goals. There is not one right culture. Cultures vary considerably from company
to company. If an employee finds that there’s a poor fit between their own
values and their company culture, there is likely to be a serious HX problem.
Managing culture is hard work. Eighty-percent of HR professionals consider

culture to be very important, yet only a third feel it is well managed in their
organizations. Companies that manage cultures well tend to have a clear
definition of their culture, hold everyone accountable for managing their culture,
and place a higher value on diversity of thought.
Finding 5 Employees Want to Reach Their Human Potential

Employees want to work in companies that treat them like whole people
rather than as human widgets that fit into a specific job. They are looking for
companies that invest in their future, helping them be better tomorrow than
they are today.
There is good news here. Fifty-nine percent of HR respondents agree they are
helping employees reach their full potential. And, over 70% of employees feel
the same way according to HR.com’s report Taking Care: How to Develop and
Support Today’s Employees. There are four key factors we identified that foster
realization of potential, and in turn, HX.
1. Investment in Development and Career. Fifty-seven percent of HR

professionals feel their organization does this and 63% of employees feel
the same way.
2. Recognition and Feeling Valued. Fully three-quarters of employees who do
not feel valued are out looking for a new job!
3. Work-Life Balance. Most (69%) of HR respondents feel they respect employees’
work-life balance and, somewhat surprisingly, 69% of employees agree.
4. Finding Meaning in Work. The concept of a “purpose-driven” organization
has increased in popularity. Employees are searching for a company that
matches their own sense of purpose with that of the organization. For
younger generations that has become paramount. Sixty-percent of HR
professionals strongly agree/agree that their employees find meaning in their
work. And, 89% of employees feel the same way.
Key Takeaways
1 Map Out Ideal Employee Experiences

HX starts by mapping out the key touch points between employees and their
organizations throughout a typical employee life cycle. Determine which are most critical
and then begin redesigning those touchpoints with the biggest gaps. Your customers
throughout this process are your employees, and they should play a major role in
providing feedback and even help with experience redesign. A lot can be learned by
studying the huge body of research on customer experiences.
Different employee populations will likely require somewhat different HX maps.
For example, some employees may attach greater value to extensive travel while
others may be more interested in work-life balance. Just as marketing professionals
use the concept of “personas” when considering different groups of customers, HR
professionals can think in terms of different employee groups with different sets of
needs and desires.
2 Set Your Outcome Measures Before You Begin

Determine how you will measure the impact of your efforts, again through the eyes of
your employees. Engagement metrics should continue to be part of the mix. But each
touchpoint will need its own metrics. For example, L&D might measure things like time
to performance, changes in key skills and behaviors and learner reactions to the value
of training opportunities provided.
3 Poor leadership = Poor HX

No single person is likely to have a larger impact on shaping HX than an employee’s
immediate supervisor. In Trait 2 of this report we present findings that show a
considerable deficit in leadership skills, from providing clear direction to coaching.
We must up the quality of leadership in our organizations and help leaders realize the
moment-by-moment impact they will have on human experiences.
4 HR’s New Role: HX Manager

While new titles may not be required, HR will need to play a lead role in designing,
implementing and measuring the impact of HX. Many organizations have created a
new role called “Customer Experience Manager” with the accountability and authority to
cross silos to optimize their customer’s experiences. A similar shift makes perfect sense
for HR but will require new sets of skills and new ways of thinking about employees.
Conclusion:
New Beginnings
I t is customary to finish a research report with a conclusion. For this report, however,
we are closing with “new beginnings.” That’s partly a reference to the fact that this
report will be periodically updated as new research is conducted. But it’s also a
reference to the fact that the HR profession itself is at a critical juncture during which
it’s embarking on new beginnings.
Never has the quality of talent mattered more to the success of our organizations. This
reports provides a starting point for HR professionals who wish to better understand the
ongoing transformation of the HR function.
Each section of this report includes specific top takeaways. Here we offer several
broad insights that might help set HR on its future path.
Start by gaining a solid grasp of business transformation and its impact on the
workforce
Fueled largely by digital advancements, business models and work paradigms
are rapidly changing. Bureaucracies are giving way to structures that put decision
making power where it belongs: in the hands of highly empowered front-line teams.
But to make this system work, employees must have the right skills, motivations and
resources, and HR is largely responsible for making sure they have what they need.
Overhaul HR systems where needed

HR professionals tend to see a lot of room for the improvement of today’s talent
management systems. They need to take a fresh look at the systems they use to
attract, develop and retain our workforces. Find the best systems for your organization.
Work with colleagues and vendors to select and then get the most out of those
systems. They are the tools of HR’s trade. HR will also need to continually evaluate the
payoff of such technologies, shedding ones that are not meeting expectations.
90 The DNA of Human Capital: Trends Report 2019 • Conclusion
Balance intuition with data-driven insights
A combination of artificial intelligence and analytics will help HR to become

considerably better at its job over time. HR professionals must learn more about AI
and analytics, including how they can best be leveraged. Although human judgment
will still take precedence in the field of HR, the decisions you make and the effort you
invest should more and more be guided by data. Predictive analytics will be especially
important as a tool to help HR make the right talent choices for the future.
Step up or step off
The team you have today probably lacks some of the skills needed to thrive in
tomorrow’s HR function. Deploy your expertise at talent planning. Apply it to your HR
staff, carefully thinking through success profiles for the future and where there are
major gaps. Close these gaps. You’ll need to develop and hone the skill sets of your
HR team, of course, and you’ll likely need to hire new team members with skills that
complement those of current staff. Paramount skills will include strategic thinking,
analytic capabilities, and high-tech proficiencies.
We wish our HR colleagues the best of luck as they reinvent the HR function. If we at
HR.com can ever be of assistance to you, please feel free to contact us. Our mandate
is to help you do your job better.
HR Research Institute
Driven by HR.com, the world’s largest Human Resources

professionals social network, the HR Research Institute not only
offers a unique community of HR Marketer peers but also delivers a
key part of our mandate, that of inspiring and educating today’s HR
professionals.
Over the past three years, the HR Research Institute has produced
more than 85 exclusive primary research and state of the industry
reports based upon surveys of thousands of HR professionals. HR
Research Institute Reports and Infographics are available online,
and always free, at www.hr.com/featuredresearch
To learn more about this research and to book speaking

engagements, contact
Debbie McGrath
CEO and Chief Instigator, HR.com
dmgrath@hr.com

The - DNA - of Human - Capital - Trends - Report - 2019 - Full - Research - Report PDF

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

The - DNA - of Human - Capital - Trends - Report - 2019 - Full - Research - Report PDF

Hochgeladen von

Copyright:

Verfügbare Formate

The DNA of Human Capital:

Trends Report 2019

— The HR Research Institute Team

Forget tangible assets. They are yesterday’s news.

About this report

The Nouveau Workforce: Leadership: Learning & Development:

Performance Management: Talent Analytics: Talent Acquisition:

Diversity and Inclusion: Human Engagement: HR and Workforce Technologies:

The HR Function: Workforce Planning: The Human Experience:

The Nouveau Workforce:

Finding 1 Networked smart technologies are a driving

For our Workforce 2020 research, we asked participants to indicate

Networks are changing business models, organizational

Past industrial revolutions have left behind a residue of traditional ways of

Another HR.com study, An Overview of Today’s Organizational Structures,

Finding 3 New technologies and expanding networks require new skills

Finding 4 Analytical thinking will be an increasingly essential skill

Survey Question: Compared to today, by 2020 what worker capabilities

Analytical thinking: applying information to solve problems

Systems thinking: understanding of linkages

Networking: interacting with others

Finding 6 Organizations must prepare in order to thrive

1 Consider adopting a flatter, more networked organizational

2 Work with senior leaders to develop future-focused skills

3 Blend skills development with smart technologies

4 Stay on top of disruptive trends

5 Nurture insights, not just knowledge

Finding 1 Good leaders remain scarce

In fact, only 20% of HR professionals give a high rating to their organizations’

Finding 2 Most HR professionals view the competencies of their leaders

Strong leaders master key leadership competencies. Yet, as shown in the

Coaching is of particular concern, partly because leaders are seen as so

Leadership competency effectiveness

Survey Question: To what degree are the following statements true

Only 35% They are viewed as trustworthy 35%

trustworthy They provide clear direction 24%

They are good at coaching others 17%

Finding 3 Poor leadership is the top barrier to better employee

Employee engagement remains a problem in most organizations, and poor

Moreover, as shown in the figure below, we found major differences of the

Impact of leadership competencies on engagement

Survey Statement: Rate your organizational leaders on the following

Communicate clear expectations to employees 70%

Recognize superior contributions 70%

Take time to listen 68%

In well-led organizations, leadership development is most

Impact of leadership practices on organizational success

Please rate the following statements as true or false, as they pertain to

1 Create a longer-term leadership strategy

2 Select the best

3 Move from guesswork to data-driven decisions

4 Turn every leader into effective coach

5 Strive for gender diversity at every leadership level

Finding 1 L&D still has a long way to go to achieve excellence

Finding 2 Learning is increasingly delivered via multiple

Finding 3 L&D departments are moving slowly when it comes to new

Finding 4 Personalized learning could take a major leap forward

HR and L&D professionals indicate personalized learning leads to higher

A lack of resources represents the biggest obstacle to

Top Barriers to Personalized Learning

Survey Question: What obstacles do you face in delivering personalized

Not enough resources 64%

Difficulty delivering personalized