13 April 2022

What is keeping HR people up at night? An expert shares some insights

Submitted by Bronwyn
What is keeping HR people up at night? An expert shares some insights

Feedback from the latest 21st Century Coffee and Conversations session.

21st Century hosted another very successful Coffee and Conversations session at the end of February.  These sessions started as a way to connect with our clients during lockdown, are hosted every two months, and have become extremely beneficial networking and collaboration opportunities. The focus of the latest session was on the trends that we are seeing across all of our businesses: Remuneration and Reward; Organisational Design; Change Management; People & Talent and Analytics.

The session started with a discussion around “the great resignation’ that we are seeing in some developed countries.  It seemed quite a dichotomy discussing organisations struggling to retain employees when we have one of the highest unemployment rates in the world.  The latest numbers are 34,9% unemployed (46,6% using the more accurate, expanded definition) and a frightening 66,5% youth unemployment.  We also touched on the fact that SA has approximately 155 000 fewer jobs than 14 years ago (Q1 2008). During the same period, the population of working age (15 to 64 years old) grew by approximately 8.2 million people.  That being said, organisations are grappling with retaining executive and highly specialised employees.  This is due to a combination of a shrinking talent pool and employees choosing emigration or “semi-gration” options which has been largely facilitated by hybrid working as a result of COVID. 

Remuneration and Reward:

We are noticing that increases have been pretty flat and the gap to CPI has got smaller as organisations try and balance keeping up with inflation and affordability.  On the plus side, the prevalence of salary freezes is definitely decreasing.

More and more organisations are incorporating Environment, Social and Governance (ESG) measures into their variable pay schemes, with the bigger prevalence on social measures, and environmental measures growing in use.  This is consistent with a broader trend that we are seeing of organisations moving from Shareholderism to Stakeholderism which includes being accountable to not only shareholders but employees, supply chain and the community as well.

We then moved on to some potential compliance changes: King IV has largely been adopted by most organisations in South Africa and principle 14 which relates to fair, responsible and transparent remuneration is guiding responsible remuneration design.  King V is also currently being drafted. There is a draft companies amendment bill that proposes a couple of changes that will fundamentally affect the way we design and report on pay in organisations.  The proposals that could have the greatest impact in the remuneration space are that the votes on the remuneration policy and the implementation reports be changed from a non-binding to a binding vote and that there needs to be consistent disclosure of wage gaps within organisations, alongside proposals of tough consequences for Remco members should a “no” vote be the result. Parties have been invited to comment on these proposed amendments, and we wait to hear the outcome.

Organisational Design:

We debated whether organisations are prepared to challenge their pre-Covid strategies and operating models.  The general feeling was that many organisations are operating under strategies that have become largely irrelevant and that business and operating models are not agile enough to cope with this rapidly changing environment that we operate in.

We further discussed the impact that hybrid working policies are having on organisational structures with the impact being felt both in the physical structures, with even some of our larger corporatised employers opting for splits as high as 60/40 remote and on-site and on reporting structures as teams navigate a far more agile and dynamic future.

Change Management:

We started this conversation by discussing the huge uptick in organisations wanting to run culture surveys to test how changing work conditions have impacted corporate culture and the employee value propositions.  The trend that we are seeing is that organisations are wanting to do a “temperature test” more regularly and are considering using technology solutions outside of the usual anonymous survey tools to facilitate more regular communication. 

We also shared a study showing that organisations implementing new projects are more than twice as likely to succeed if they couple that with a well thought out change management process.

Diversity and Inclusion is also high up on HR practitioner agendas and we discussed how D&I was influencing decisions and effecting real change in organisations.  The positive change that we are seeing is that there is a move from a compliance driven approach to D&I to organisations embracing the benefits of having a fully inclusive and diverse culture.

People and Talent:

As our clients are primarily HR practitioners, this element of the session elicited the most discussion as the topics see-sawed from attraction and retention to vaccination policies.

The conversations started with us sharing our experience on how organisations are navigating the hybrid future and how they are starting to firm up on their practices and policies in this regard.  The experience of many of our clients is that some employees are returning with a sense of entitlement to work remotely or are exhibiting resentful behaviours which is impacting on performance.  Again, a big opportunity for change management interventions.

We also detailed some of the trends we are seeing in EVP studies:

Emphasis on inclusion, equity and fairness within EVP’sFlexibility and choice of where and when people workFairness in remuneration practicesInclusion of employee wellbeing – mental, physical and financial – in engagement measuresCreating opportunities for Internal mobility beyond traditional linear career pathsDealing with the diverse needs of a multigenerational workforceThe perceived social impact that organisations have in the context of ESG being a strategic business priorityThe issue of compulsory vaccinations or not and how to implement this consistently and fairly without discriminating and/or landing up in the CCMA also seems to be a big issue for some clients, especially if it impacts on their ability to deliver a service to key clients.

We also discussed performance management in the new world of work and alluded to a recent Gartner survey where 64% of managers replied that in-office employees were higher performers than those who choose to work remotely and that the in-office employees were 76% more likely to be promoted which sparked a debate on fairness and the importance of getting it right.  The learnings were that managers need to improve their communication skills and heighten their awareness around engagement flags amongst employees.

Finally, skills development was discussed and it was noted that we are in a phase where we need to move beyond upskilling (being skilled for your job) and reskilling (growth opportunities). Organisations are starting to assess adaptability and learning agility given the speed at which change is happening.  We have certainly noticed an increase in demand for coaching and mentoring as part of the talent journey.

Analytics:

Our final business area is a relatively new concept in the HR space and we started by spelling out our vision for the Analytics company and how we see analytics being able to provide valuable strategic information to HR executives.  HR sits on the most important data in any organisation.  Imagine a future where an HR director can pull smart analytics from payroll, job descriptions, performance management systems, organisational structures, talent grids and the like and use that data to run predictive analytics for presentation at exco meetings – a direct link between people data and business strategy!

In our experience, South Africa isn’t quite there yet but we are certainly able to run descriptive people analytics and use that data to show HR information in a completely different, impactful way.  Once we get to a point where we can seamlessly run one central database in the organisation, the number of predictive models that we can implement will only be limited by the number of problems that need to be solved.  There was much excitement about what the future of HR could look like in terms of contribution to the business.

In closing, we are looking forward to many more successful Coffee and Conversation sessions and encourage anyone looking to be a part of this no obligation HR community of like-minded peers to reach out and join us for more robust discussions, all conducted in a friendly, relaxed atmosphere.

Author: Craig Raath, Executive Director at 21st Century

About 21st Century:

21st Century, a level 2 BBBEE company, is one of the largest Remuneration and HR consultancies in Africa, with a team of more than 60 skilled specialists, servicing over 1700 clients – including non-profit organisations, unlisted companies, government, parastatals and over two-thirds of the companies listed on the JSE. 21st Century offers bespoke business and strategy planning services, operating model and organisational design, creative reward practice modelling, change, stakeholder and culture management, training courses and comprehensive human capital and talent plans. These are all underpinned by our analytic and survey capability tailored to the African environment. 21st Century continues to offer solutions via a combination of virtual channels and on-site presence. 

21st Century has expanded its services to offer a full turnkey sustainable business and remuneration service. Beyond remuneration and reward consulting, 21st Century offers local analytics for business advantage; remuneration and HR training; change management services; talent and people solutions; and end-to-end organisational design and development.


Issued By: The Lime Envelope
On Behalf Of: 21st Century
For Media Information: Bronwyn Levy
Telephone: 076 078 1723
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