How to reinvent HR for a changing world

To keep up with automation, many organizations are striving to arm their workforce with digital skills. Not so fast, says HR industry analyst Josh Bersin—to truly becoming digital entities, organizations need to work toward becoming service companies.

That’s the message Bersin shared last week at IAMPHENOM, the annual conference of Phenom, which provides platforms to manage the talent experience. About 1,000 HR practitioners and leaders gathered for the event in Philadelphia, which was themed around the four audiences Phenom’s experience products are tailored to: candidates, recruiters, employees and managers.

All four segments are affected by automation, Bersin noted.

“We used to think about that in terms of employees needing digital skills; but becoming a digital company means means actually acting in a digital way, and that means becoming a service organization,” he said. “We’ve all become service workers—we’re all in the people business because, if everybody in the company doesn’t feel engaged, trained and aligned today, the company isn’t going to operate the way it used to.”

The Role of Managers

Ensuring employees are up to that challenge requires competent managers—but the role managers play is also transforming, Bersin said.

“We don’t work in hierarchical companies anymore,” he said, noting that his recent research found that 35% of companies said their workers operate in a network—up from 6% just five years ago. “You can call it agile, you can call it a network, you can call it teams—but we have to come to grips with it.”

Organizations are moving away from the concept of managers providing direct oversight over employees; modern “service companies” instead operate with the expectation that managers manage projects—and people manage themselves. Workers know their responsibilities, are eager to learn and innovate, and look to their managers for help and clarity—but not permission to make decisions, Bersin said.

That’s been an ongoing evolution in the last several decades, as leadership models moved from industrial to hierarchical to collaborative to teams and, now, to the trusted enterprise—rife with teamwork, data, high productivity and in-the-flow work.

Driving Development, Experience

The shifting role of managers goes hand in hand with evolving employee expectations, including around career development.

Jobs are changing, roles are changing and the concept of “climbing the corporate ladder” is becoming extinct—as employees aim to move around, rather than straight upward, which employers can take advantage of, Bersin said.

“Careers are now about finding people important development opportunities in the context of what the company wants to do,” he said.

A prime example is IBM, Bersin said, which recently conducted a companywide skills analysis and found 10,000 people who had the skills needed for positions it was looking to fill; similarly, a large bank that was struggling to hire AI engineers ultimately looked internally at employees with math degrees—including those working in marketing—who were offered reskilling opportunities to move into the new roles.

Leaders must also be cognizant of changing expectations for employee experience.

Many organizations are ramping up benefits in an effort to draw in and keep top talent; Dropbox, for instance, Bersin said, built a reputation for its innovative perks, including free breakfast, lunch and dinner by one of San Francisco’s most renowned chefs. But, after conducting focus groups with employees—and explaining that the company was spending 30% of wages on benefits—leaders found the benefits may not have been as impactful as they thought, he said. Workers were most eager for bonuses, more highly trained managers and better tools to make the work experience more productive.

“[Innovative benefits] are good tools to attract people, and they’re not bad things to have, but the real expectation is about the human experience at work,” Bersin said.

He encouraged HR leaders to keep in mind Maslow’s hierarchy: At the base level, meet employees’ physical and safety needs, but strive to meet the highest expectation: self-actualization—focused on personal growth, fueled by an alignment with the company’s mission and purpose.

In a recent study Bersin conducted with LinkedIn, employees were asked what most inspired them about their job—the highest percentage (26%) focused on the nature of the work itself.

“The right job,” Bersin said, “is twice as important as culture—and more than four times more important than money.”