New report reveals that despite 76% of HR Leaders reporting that their culture needs to change significantly over the next 3-5 years, only 50% of boards are committed to the culture change required to drive growth.
What progressive HR Leaders are prioritising in order to effectively deliver on business strategy in 2020 has been made clear and it’s no surprise that culture transformation is up there,” said Ben Bars, CEO of We Are Unity. “Whilst the past decade has already highlighted skill gaps, lack of prioritisation and strained leadership capabilities as critical business challenges; data suggests that there’s an exciting opportunity for HR Leaders to be a commercial business accelerator and lead the charge in developing the right performance culture going forward.”
People & Culture agency We Are Unity, in partnership with Macquarie Business School, surveyed 247 HR Leaders, from public, private and government organisations collectively representing 800,000 employees across Australia, to pinpoint what progressive organisations are doing right now to consistently deliver on their business strategies. They reveal the key insights and trends in their 2020 Progressive People and Culture Report.
Trending priorities for progressive HR leaders in 2020
Research identified three priorities that progressive HR Leaders are focussed on addressing in order to future proof their organisations:
Balanced tension between growth, reputation and governance.
There is an emerging tension between growth, reputation and governance that if not balanced could create significant negative impact for organisations, with 73% of HR Leaders reporting this tension as a genuine concern that is likely to put many boards and executives in conflict over the coming year. The current climate of distrust has meant boards are putting greater focus on risk, ethics, reputation, and compliance. Yet – we’re still finding that the executive level are incentivised on growth, innovation and self-disruption1.
Proactively designing a culture that supports innovation at the right pace.
To accelerate growth through innovation, organisations need to cultivate psychological safety – which means that leaders need to proactively create the cultural conditions that enable employees to take measured risks, challenge others and, be vulnerable2. Significant behavioural change requires radical reinvention from the inside out, and from the board level down, but the results can be dramatic. Research showed that psychologically safe environments are 33% more likely to achieve superior stock market performance than those that don’t, however only 18% of HR leaders surveyed felt their organisation was getting this right.
HR needs to build a reputation for business transformation.
When assessing the commercial impact and accumen of HR and their ability to influence the board, research highlighted that only a third of HR Leaders surveyed (32%) reported that they can directly relate the commercial impact of HR on business outcomes. Research also indicates that there is still an over-reliance on engagement survey data (49%) when making commercial culture decisions and meanwhile only 1 in 3 HR Leaders can demonstrate a link between engagement and business performance, with just 12% utilising predictive analytics to support decision making.
HR Leaders in Progressive Organisations still utilise measures of the employee experience, but also apply sophisticated analytics to ensure that any investment in the employee experience is likely to generate a tangible commercial outcome.
Bars added: “It’s clear from the findings of this year’s study that the HR function will need to be at the centre of any 2020 business strategy and that HR Leaders need to come armed with the skills and strategies to both build credibility and bridge the gap between the frontline and the board. With research showing that progressive organisations can outperform the market on total shareholder return (TSR) by 33%, are five times more likely to innovate at speed, two times more likely to drive superior growth and two times more likely to deliver superior service quality, we can safely predict that by 2025 we will see the commercial HR Leader front and centre of the transformation agenda”.