In 2024, the landscape of HR is set to revolve around a vital trend: "Organizational Transformation".
This proactive strategy is more than a response to an evolving business world—it's an anticipation of changes, tackling challenges like increased geopolitical tensions, fragile supply chains, rising inflation, and Environmental, Social, and Governance (ESG) issues head-on.
In our recently published HR Outlook 2024, our research shows that HR leaders are not just seeking stability, but are keen on driving progress.
Organizational transformation isn't just an option, but a necessity for sustained progress and resilience.
“HR leaders need to take the front role seat in driving organizational changes, including answering critical questions like "How do we ensure our workforce is future-ready?". This means shifting from a mostly reactive role to a mainly strategic role. This also means having greater courage to own HR's voice in the boardroom, particularly when it comes to people strategies.”
— Dorothy Yiu, CEO International & Co-founder at EngageRocket
HR’s Role in Navigating Change
Mercer’s 2023 Global Talent Trends Report highlights a significant shift: 41% of C-suite executives recognize the pandemic as a catalyst for fundamental business transformation, encompassing work, workforce, and workplace dynamics.
This transformation signifies that HR's role in leading organizational change is more critical than ever. HR professionals are tasked with not just adapting to changes but also spearheading strategies for effective organizational transformation.
“Organizational transformation is no longer a reactive response to external circumstances; it has become a proactive strategy embraced by forward-thinking organizations to navigate macro shocks and drive long-term success. By actively pursuing transformation, organizations can proactively shape their future and stay ahead of the curve."
— Hannah Lennon, Senior Associate - Talent Solutions Consulting at Mercer
Key Insights and Statistics
Our research reveals pivotal data points:
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Nearly half (45%) of HR leaders place "organizational transformation" as their top priority for 2024, indicating a shift towards proactive organizational restructuring strategies.
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About 40% of employees find their company’s key processes ineffective, signaling the need for an overhaul in organizational processes and systems.
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More than one-third (37%) of employees feel their teams lack innovative behaviors. This spotlights the urgency for fostering innovation in organizational transformation.
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1 in 2 (45%) HR leaders rank “organizational transformation” as the No. 1 priority for their organization in 2024
Source: EngageRocket's Research 2023
The Transformation Deficit Challenge
Gartner's research indicates a worrying trend: a decline in employee support for organizational changes—from 74% in 2016 to just 38% recently. Gartner also noted that many employees are experiencing change fatigue, and managers lack the necessary tools. 77% of HR leaders said their employees feel fatigued, and 82% added that their managers aren’t equipped to lead change.
This "transformation deficit" in HR underscores the need for HR leaders to develop effective and people-centric transformation strategies, mobilize workforces, and rethink processes to better navigate future macro shocks.
“Change is hard, but when you provide a clear business rationale for the change and inspire others around where you are going, this helps get people aligned and even motivated to be part of the change."
— Jill Zimmerman, EVP, Chief People Officer at Hilco Global
2024 Focus Areas
1. Leverage Workforce Restructuring:
HR leaders can leverage workforce restructuring as a key tool for driving successful organizational transformation in 2024. This involves establishing new teams, and departments, and reporting relationships so that they can better achieve organizational goals. The COVID-19 period showed the importance of getting (and staying) lean, and this has to be part of any transformation roadmap in 2024.
HR leaders can assist in restructuring for a more lean and efficient organization by eliminating redundancies and streamlining processes.
2. Empower Employees and Foster Innovation:
To tackle the problem of slow innovation highlighted in EngageRocket’s data, companies need to give employees more freedom to come up with ideas, share feedback, and take initiative.
HR can help by empowering employees to take ownership of their ideas and promoting collaboration across different teams. Creating a safe and open culture for feedback is also crucial in fostering a culture of innovative thinking and agile responsiveness within the organization.
3. Embark On Job Redesign:
Job redesign is an initiative that helps organizations discover a more efficient and productive blend of tasks within a job role. While the concept of job redesign isn't novel, job redesign is crucial in keeping roles relevant and attractive, focusing on sustaining long-term competitiveness and agility in the face of disruptions.
HR can adopt a systematic approach to redesign and reimagine how jobs are performed, existing or new. This approach is rooted in the four key facets of organizational strategy and structure, processes and tasks, technology, and people.
4. Expanding the Transformation Vision:
To deepen the impact of organizational transformation, companies must look beyond traditional boundaries. This includes embracing digital transformation, fostering a culture that supports continuous learning, and integrating advanced analytics into decision-making processes. Digital tools and AI can play a pivotal role in streamlining processes and enhancing employee experiences.
5. Technological Integration and Data-Driven HR:
Harnessing the power of technology and data analytics is key to successful organizational transformation. By leveraging data, HR can make more informed decisions, predict future trends, and measure the effectiveness of their strategies. This includes the use of HR analytics tools, employee feedback systems, and predictive modeling.
“As organizations transition from a regional to a national scope or embrace phases of growth, a strategic focus should be placed on personnel placement, ensuring that talented individuals play pivotal roles in fostering organizational development. Recent developments at Pine Gate Renewables have involved the addition of top-tier leadership. This transformation has prompted a thorough reassessment of our organizational structure, emphasizing change and development. When it comes to change management, it's not just about making one change; it's a continuous process. Both the company and the industry are evolving."
— Eric Shangle, Senior Vice President People & Culture at Pine Gate Renewables
“The enduring challenge of the hospitality industry lies in its labor-intensive and siloed organizational structure, a fact that cannot be overlooked in the post-pandemic era. Job redesign is imperative to make roles more appealing to local talents and mitigate recruitment shortages. PPHG’s vision includes having higher-caliber employees, with more development opportunities and enhanced compensation and benefits. For example, we are considering a shift from hourly pay to a performance-based model for certain job categories, and increasing flexibility and benefits for our employees."
— Andreas Sungaimin, Senior Vice President, People & Culture at Pan Pacific Hotels Group
Conclusion
The journey toward organizational transformation in HR for 2024 is pivotal and multi-faceted. HR leaders must be the architects of this change, strategically mobilizing workforces, rethinking processes, and ensuring the organization stays resilient and adaptable to future macro shocks.
Embracing technological advancements, empowering employees fostering an innovative workforce, and leveraging workforce restructuring and job redesign are key to this transformation. In 2024, the clarion call for HR is clear: embrace transformation for enduring success and resilience.
💡 Read the full highlights or trends and recommendations for the year ahead in the HR 2024 Outlook below:
