Human Capital Trends for 2016
One of the reasons why I want to pursue post-MBA employment at a management consulting firm is because they’re the definition of thought leaders. To help their consultants and clients stay on top of industry trends, firms such as Deloitte and McKinsey & Company are constantly gathering information and conducting research for their in-house publications: the Deloitte University Press and the McKinsey Quarterly. Each year, Deloitte produces a report on key developments in human capital for the upcoming year. I recently read their report for 2016 and wanted to share some of the points I found most interesting.
According to nine out of ten executives surveyed for Deloitte’s 2016 report, “organizational design” is the most important human capital issue this year. Coined by Deloitte as “the rise of teams,” organizations are shifting to a decentralized structure that relies on a bevy of customer, product, market, and mission-driven small groups. Supported by sociological research, this trend follows the Dunbar Effect, which argues that people can’t communicate effectively with more than 150 people. The thought is that by not dividing an organization by function, leadership will be able to focus more on long run planning, not micromanagement.
If management is less concerned with the day-to-day, the freedom this gives to their employees to make and set their own goals — within the greater corporate strategy, of course — does wonders for their level of engagement. It also can help an organization share information better. Modeled after the US military’s “Information and Operations Center,” Deloitte recommends that at the center of this new structure be a forum where a liaison from each team meets regularly to discuss the issues their team is facing and to learn from other teams’ successes and failures.
Another great way to share information is by encouraging people to work across teams on a short-term or, via a job rotational program, a long-term basis. Doing so also increases employee engagement. Deloitte notes that with more than half of the workforce from the millennial generation, it’s necessary to create a work environment around what their values: meaningful work and dynamic career opportunities. Lastly, Deloitte feels that the “rise of the teams” is here to stay because it helps address the flawed system of performance management. No longer is “did you make your manager happy,” the outcome, but instead “does your team want to work with you again.”
Moving on, the area that ranked first last year was “culture and engagement.” According to Deloitte’s research, it’s still a top issue among executives. I think their definition of these two intertwined, yet separate issues is superb: “culture describe ‘the way things work around here,’ while engagement describes ‘how people feel about the way things work around here.’” Also of note is the rise of “design thinking” in this year’s report. To help employees cope with their “always connected” work lives, HR departments are being asked to innovate and structure their processes to reduce the stress placed on employees while they’re being managed, supported, and trained.
