3 takeaways from Deloitte's 2018 Human Capital Trends Report
3 warnings for your business
Why you can't afford to ignore Deloitte's Human Capital Trends report
Each year, Deloitte releases its Global Human Capital Trends report (closely followed by the Deloitte Millennial Survey 2018 which we'll also look at in this post). It’s a wealth of insights for those in the HR field, but increasingly it is being referenced by business leaders of all disciplines. That makes sense, because until AI replaces humans it’s people that influence businesses, those working within them and the wider society they impact.
The survey polled over 11,000 business and HR leaders (the largest of its kind in the world), and it delivers a strong message around the rise of social enterprise. Here’s Deloitte Australia’s Human Capital Leader, David Brown’s opinion:
"A fundamental change is underway. Society’s expectations of business are changing. The focus is now clearly on business’ role in society as a driver of change, just look at the role they played in the marriage equality debate in Australia late last year."
Historically, we’ve looked to the government to address societal imbalance - business was there to just make a profit and give us jobs. Today, politicians are trusted less than ever while 78% (of those surveyed in the 2017 Cone CSR Report) want companies to address important social justice issues:
“Organizations today are increasingly judged on the basis of their relationships with their workers, their customers, and their communities, as well as their impact on society at large—transforming them from business enterprises into social enterprises.”
They've distilled much of their research in this video:
What does this mean for businesses in Australia, and beyond?
Here are some snippets from Deloitte’s report that we felt were worth highlighting, with our translation into simple action points:
The growth of social enterprise is not a fad
“65 percent of CEOs rated “inclusive growth” as a top-three strategic concern, more than three times greater than the proportion citing “shareholder value.”
CSR, corporate sustainability and community engagement are topics you’ll hear about a lot more this year - and not because it’s a new concept or trending hashtag - this growth is actually a correction as modern corporations rush to catch up with society’s expectations. The quicker enlightened businesses can prove their purpose to their customers and employees, the quicker they’ll win market share.
Ignore Millennials at your peril
You'll have heard this mantra before, but the evidence has never been so compelling:
“86 percent of millennials think that business success should be measured in terms of more than just financial performance.”
“The social enterprise must evaluate its actions based on its impact on society, not just the bottom line. As stakeholder expectations rise, an inauthentic or uneven commitment to citizenship can quickly damage a company’s reputation, undermine its sales, and limit its ability to attract talent. '”
You’d better have a solid social sustainability program in place, not only that, you must be able to demonstrate how it positively impacts the community. Millennials are sceptical and merely paying lip service will backfire disastrously. A point backed up with this quote:
“Companies that appear aloof, tone-deaf, or disengaged face harsh headlines, negative attention on social media, and tough questions from a range of stakeholders.”
Deloitte's Millennial Report this year underlines this with a sobering statistic:
"Millennials' opinion of business’ motivation and ethics is at its lowest level in four years. The percentage of Australian millennials who say business has a positive impact on society has dropped from 72% in 2017 to 45% in 2018."
Read that last quote again. If you can't see the threat - and opportunity - for your business I can guarantee your competitors will. David Hill, Deloitte Australia's COO, states what you already know:
"...companies need to orientate their business toward profit with purpose; and be proactive about making a positive impact in society. This is key to attracting and retaining millennials.”
Australian Millennials are more pessimistic than the global average, which in part explains why they're actually more concerned with company culture than salary.
Put your money where your mouth is
“84% of Australian survey respondents cite corporate citizenship as important or very important”
“...only 23% of Australian respondents say social responsibility is a top priority reflected in their corporate strategy”
Until recently it’s been fairly easy for companies to put off planning their philanthropic programs. Citing how valued their communities are or showing photos of a volunteer day in their annual report just won’t cut it today.
However, thinking of this investment as an onerous obligation is the wrong approach! A well considered social responsibility program can, and should, deliver a financially positive return on investment - especially for companies who embrace it vigorously and earn market leadership as a result.
We can help your business get in the 23%