New Mercer study spotlights four talent trends for 2020

Leading global employers are supporting their workforce foster healthy lifestyles, financial wellness and reskill in light of AI and new technology, according to a study by Mercer.

Blackboard with what's next written up in chalk

Ruth Holmes

30 March 2020

With government and employer responses to the COVID-19 pandemic accenting personal wellbeing as never before, Mercer’s 2020 Global Talent Trends study identifies what it believes are the four trends leaders can harness to “win with empathy” now and post-pandemic for international organisations and those with globally mobile employees.With the current global health crises potentially set to accelerate these themes, Mercer’s survey of 7,300+ c-suite executives, HR leaders and employees in 34 countries finds that employers are navigating uncertainty with an amplified focus on the health, financial wellbeing and careers of their employees. This is putting HR in the frontline of driving organisational change.

COVID-19 catalysing workplace changes

The COVID-19 pandemic and subsequent uncertainty are “accelerating changes in the way organisations around the world are working and will continue to work into the future,” says Mercer. With wage growth predicted to be stagnant by 63% of HR leaders surveyed and 34% of employees expecting their jobs to be replaced in three years, purpose and employee engagement are set to be key, says the consultancy.

People-centred approaches to managing uncertainty

“Balancing economics and empathy in all people decisions is important, even more so now as we face questions, concerns and the uncertainty of a global pandemic,” said Ilya Bonic, President, Career and Head of Strategy at Mercer. “Organisations need to have a financial model and cultural mindset that enables them to prepare for and invest in the future.”“This rethinking of purpose and priorities is vital across the organisation, but especially for HR,” continued Ilya Bonic. “The findings from this year’s study make it clear that transformation of the HR function is a key component to creating a sustainable organisation.”

Four global talent trends for 2020

Mercer’s study identifies four trends for 2020:

1. Future focus

With a new mandate for business, 85% of executives agree that the organisation’s purpose should extend beyond shareholder primacy. Yet only 35% of companies deliver on this today.One in three employees say they would prefer to work for an employer that shows responsibility towards all stakeholders, beyond just shareholders and investors.Much of an organisation’s success depends on whether it can support its talent to grow and shape a sustainable business, says Mercer. Over two-thirds of executives (68%) want to focus more on environmental, social and governance (ESG) goals.For employees, 61% of employees trust their employer to prepare them for the future of work. However, 63% feel at risk of burnout.Career pipelines also have tightened as 72% of experienced workers say they plan to work past retirement age. Just over half (55%) of Gen Xers say opportunities to advance are limited because of longevity in the workplace.Better management of older workers is part of creating shared value, believes Mercer. More than three-quarters (78%) of employees want long-term financial planning, yet just 23% of companies say they provide financial education for employees today.“Organisations that successfully navigate the turbulent times ahead will be those who champion empathy to maximise returns for all shareholders, employees and society alike,” said Laura McKim, Partner and UK Career Business Leader at Mercer.For managers and employers with a global and globally mobile workforce, employees’ most-valued career support is personal and professional growth opportunities (73%) across most regions.In Asia, knowing what skills will become important or obsolete in the future tops the list (71%), while in Africa employees value managers who can have useful career conversations no matter their life stage (72%). The UK is aligned to the global trend in that 70% of employees feel that their company gives them the space to learn and grow, both professionally and personally.Together, these data suggest the important role workplace and career coaching can have in supporting employees meet their professional goals.

2. Race to reskill

Reskilling is the talent investment most capable of driving business success. Almost every respondent organisation (99%) is embarking on transformation and reporting significant skill gaps.Workforce capability and lack of future skills was the top reason transformations failed. Although 78% of employees globally say they are ready to learn new skills, 38% claim they do not have enough time for training.Moreover, just 34% of HR leaders are investing in workforce learning and reskilling as part of their strategy to prepare for the future of work and 40% do not know what skills their workforce has today.“Job requirements are changing and the responsibility for upskilling, reskilling and redeployment needs to be shared between employers and employees,” said Lisa Lyons, UK Leadership and Workforce Transformation Practice Lead at Mercer.“Where organisations see less demand for certain skills and increased demand for others, they should look to identify people with transferable skills and provide reskilling opportunities.”Across regions, employees say innovation will be the top in-demand skill in the next 12 months. HR leaders in North America and Latin America agree with their employees. The United Kingdom follows this trend, with employees and HR leaders agreeing that innovation is a top priority. Elsewhere, however, HR leaders put digital marketing (Africa, Europe, Middle East, Pacific) and data visualisation at the top (Asia).

3. Sense with science

Advances in machine learning continue to permeate across industries and ways of life. The use of predictive analytics has nearly quadrupled in five years (from 10% in 2016 to 39% today). Yet, only:

43% of organisations use metrics to identify employees likely to leave
41% know when critical talent is likely to retire
18% know the impact of pay strategies on performance
15% can determine if it is better to buy/build/borrow employees
12% are using analytics to correct inequities and prevent them recurring.

Other forms of employee engagement data gathering are on the rise too. Six in ten (62%) companies use pulse surveys and 33% plan to invest in this in 2020.While machines outperform humans at tasks related to scale and speed, humans outpace machines at sense-checking and judgement, which are critical elements of ethical decision-making.Two-thirds (67%) of HR leaders are confident they can ensure AI is not institutionalising bias, ethics codes about the collection. However, the application and implications of people analytics are still in their infancy.Talent assessment is equally an area where human intuition is needed along with the digital assessments – only one in two employees (52%) report a positive assessment experience. “The availability of data and capability of analytics has increased but with great data comes great responsibility, the challenge is for organisations to use it effectively to inform strategy through ethical means. The challenge for companies lies in balancing the protection of personal data and the interrogation of this data to drive strategic decision making,” said Laura McKim, Partner and UK Career Business Leader at Mercer.Across regions, disconnects exist between the analytics the C-suite prioritises and those HR leaders provide. In the Pacific, 53% of HR leaders provide analytics on the C-suite’s second top priority as to why one team is high performing and another struggles. Yet, only 39% are providing analytics on the top priority around key drivers of engagement.In mature markets, like the United Kingdom, only 49% are using analytics to identify the key drivers of pay inequities – the C-suite’s top priority.

4. Energising the employee experience

Delivering on the employee experience is HR’s top priority: 58% of organisations are redesigning to become more people-centric. Yet, only 27% of executives believe employee experience will yield a business return. There is also a mismatch between the 61% of employees who trust their employer to look after their well-being; and the 48% of executives who rank it as a top workforce concern and 29% of HR leaders that a health and well-being strategy. This is not an area to be missed, says Mercer, as employees whose company is focused on employee health and well-being are four times more likely to be energised.Energised employees are essential to realise organisations’ transformation agenda: they are more likely to stay, more resilient and more ready to reskill. HR transformation is high on organisations’ agenda and delivering on the employee experience requires HR to step out of its functional silos.However, only 40% of HR leaders say they have an integrated people strategy. “Interactions with employees matter, but often our focus on HR process and efficiency creates an unappealing candidate and employee experience,” said Laura McKim. “Organisations that approach the employee experience in the same way they would the customer experience, where a premium is placed on employee interactions and system and process design comes second, will have better success in engaging employees.“Never more than now has placing employees’ interests at the heart of our businesses been more timely or important.” Improving the employee experience tops HR’s future of work priorities in Europe, North America and the Middle East, with the UK aligning with this trend. Asia and Pacific put transforming talent practices (recruitment, performance management and succession) in the top spot.