While concerns about technological innovations, the need for skills development and an aging workforce are prevalent, the most significant issue facing companies this year is the need for realignment among C-suite executives to focus on the evolving role of business in society.
In its 2018 Global Human Capital Trends report, “The Rise of the Social Enterprise”, Deloitte conducts an in-depth examination of how certain factors are impacting on human capital.
“In this new era, human capital is inextricably tied to social capital. This reality demands a fundamental pivot in how organisations do business today and how they prepare for the human capital challenges of the future,” says Pam Maharaj, Deloitte human capital leader for Africa.
“These societal challenges are even more pressing in South Africa as many communities face dire social and economic issues,” Maharaj says.
“According to the Stats SA Poverty Report, in 2015, 30,4-million South Africans were living below the poverty line and one in three people lived on less than R797 per month. It is now more important than ever for business organisations to intensify their efforts to have a positive impact on their employees, their employees’ communities and our country.”
The Deloitte 2018 Global Human Capital Trends report is one of the largest of its kind in the world with more than 11 000 executives from 124 countries participating in the global survey, including 354 South African business and HR leaders. The theme for this year, “The Rise of the Social Enterprise”, reflects the shift in the growing importance of social capital in shaping an organisation’s purpose, guiding its relationship with stakeholders and influencing its ultimate success or failure.
The 2018 Deloitte Human Capital Trends report highlights that behaving as a social enterprise and managing the external environment’s trends demands an unprecedented level of cross-functional vision, connectivity and collaboration from C-suite leaders. To do this, they must collaborate in what is called the “symphonic C-suite”, in which an organisation’s top executives play together interdependently as a team while also leading their own functional teams.
The South African results this year indicate that the hyper-connected workplace, people data and well-being are seen as most important. The top three trends in 2017, ranked by importance, were organisation of the future, employee experience and talent acquisition.
Filling society’s leadership vacuum
Increased transparency and heightened political awareness have drawn attention to business’ role as a driver of change in society.
A massive 88% of South African survey respondents cited citizenship and social impact as important with 47% stating they are not ready for this trend. Despite the link between social impact and companies’ financial performance, only 28% of respondents say citizenship is a top priority in corporate strategy.
Why is there a shift towards the rise of the social enterprise? Deloitte sees three powerful macro forces driving the urgency of this change. First, the power of the individual is growing, with millennials at the forefront. Second, businesses are being expected to fill a widening leadership vacuum in society. And third, technological change is having unforeseen impact on society even as it creates massive opportunities to achieve sustainable, inclusive growth.
Leveraging technology for sustainable growth
Ninety percent of South African respondents rate a hyper-connected workplace as important with 59% reporting that they are not ready for it. The overall findings show that most respondents use email and phone for personal, and professional communication, which is probably because they are familiar with these technologies.
The majority of respondents (76%) state that connected work tools have a positive impact on personal productivity with only 3% giving a negative response in this regard. Even though there are many new technologies available, only a small percentage of South African respondents consider using social messaging and online collaboration tools in the next three to five years.
People data and employee well-being
The rapid increase in data availability and the advent of powerful people analytics tools have generated opportunities for HR and organisations, but they are now also generating risks.
While more than half of the global survey respondents are actively managing the risk of employee perceptions of personal data use, and a similar proportion is managing the risk of legal liability, only a quarter is managing the impact on their consumer brand.
Nearly all South African respondents (90%) rate the trend of people data as important while 65 percent think they are not ready for it. Eight-one percent of respondents feel that IT and HR share the responsibility of ensuring the privacy and security of HR data.
As the line between work and life blurs further, employees are demanding that organisations expand their benefits offerings to include a wide range of programmes for physical, mental, financial and spiritual health.
With 81% of South African respondents’ rating well-being as important, 535 say that they are not ready for this trend.
The majority of respondents’ state that the employee wellness/work-life programmes currently in place in their organisation include wellness counselling, in-office wellness services, employee assistance programmes, mental health counselling, flexible work schedules, group wellness, or fitness activities.
The bottom line
Many South African C-suite leaders operate with very traditional mind-sets. As companies transform and digital organisational models emerge, C-suite leaders need to evolve as well. Achieving a “symphonic C-suite” in South Africa relies on overcoming several challenges and focusing on key aspects that facilitate collaboration.
A new generation of leaders will need to emerge that can manage across cultural, demographic and organisational boundaries.
In challenging economic and political times, strong leaders who are comfortable with complexity and ambiguity are needed to provide direction and solve complex problems. New leadership models are required to find, place and develop leaders to operate in this new reality.