Reinvention of flexibility and workforce transformation top priority for Australian companies

Human Resources: The COVID-19 restrictions on travel and workplaces needing to operate at limited capacity has resulted in many Australian companies considering future workforce needs and/or restructuring as their top priority in 2021, according to a recent Mercer study of Human Resources (HR) leaders in Australia.

HR intends to focus on harnessing the power of data to inform workforce transformation, with 62% of HR leaders aiming at improving their analytics capabilities to support strategic workforce planning.

The survey revealed that the crises and injustices of 2020 have spurred a renewed impetus for 70% of Australian companies to make progress on their environmental, social and governance (ESG) agenda as workforces demand action from their employers.

“Empathising and delivering on the needs of stakeholders beyond shareholders emerged as a key trend in 2020 – and will no doubt persist,” said Ephraim Patrick, Partner at Mercer.

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“The catastrophic bushfires, global pandemic and the Black Lives Matter movement put a spotlight on an organisation’s responsibility beyond shareholder returns to the broader communities they serve. We anticipate workforces, as key stakeholders of organisations, will continue to hold their employers to account in 2021 on the issues of climate change, individuals’ health and financial wellbeing, gender equity and racial diversity,” he said.

More than one-third (35%) of those businesses evolving their ESG practices are tying metrics to the obligations of their executives, as well as executive pay, in most instances. In the area of Diversity, Equity and Inclusion, 42% are planning to improve pay equity analytics in 2021. Companies, however, must get beyond metrics and analytics and put sustainable futures at the heart of their transformation agenda. 

“We know that a company’s values and, more specifically, action on ESG is critical to attracting talent and investors. Companies that don’t make meaningful progress in this area will pay the price, losing not only the trust in their brand but also the confidence in their ability to future-proof,” Mr Patrick said.

Mercer’s survey found that organisations are striving for “flexibility on steroids”, having learned the importance of flexibility as key to not only surviving but thriving through crises. 

“Flexibility isn’t just about where people are working. It’s also about what work people are doing. As we saw during the pandemic and will no doubt see in crises to come, the ability to quickly redeploy people to where they’re needed most, fill the skills gaps that are needed to for the future, and work in virtual teams, is critical to securing a company’s future,” said Mr Patrick.

Interestingly, more than one-third (34%) of Australian companies are considering applying more flexibility in how they pay by using an approach where the demand for certain skills rather than jobs will determine remuneration. 

The report also revealed that Australian companies are lagging when it comes to meeting the needs of older, experienced workers via flexible career pathways. 

“The traditional concept of retirement is long gone and almost three-quarters of baby boomers globally plan to keep working past retirement. But, corporate Australia is not doing enough to support our retirees and pre-retirees with arrangements that suit their life stage,” said Mr Patrick.

“Four in five Australian organisations don’t offer phased retirement as an option to retain this vital cohort of workers. In addition to holding critical institutional knowledge, they are extremely valuable as mentors and foster collaboration, resilience and productivity.”