Human Capital Management and the Changing Nature of Work

The nature of how organizations operate is changing and it has accelerated on two fronts—from the pandemic and increasingly urgent calls for diversity in the workplace. However, how the workforce is managed and compensated has not kept pace with these changes.

A report from WomenCorporateDirectors Foundation (WCD) and Pearl Meyer warns of the risks associated with this disconnect and offers a roadmap for boards to help organizations transform their approach to human capital management.

The report, which was researched and written with the input of 24 commissioners from leading public corporate boards and governance-focused industry and academia, identifies three areas that represent transformational opportunities for both boards and management teams to undertake.

“Three key areas have been identified where boards and management can work together to bring needed change: employee engagement, organizational structure and process, and leadership,” said David Swinford, president and CEO of Pearl Meyer. “Now more than ever, we need transformative leaders who can engage a highly diverse workforce in new ways. The compensation committee, with its increasing responsibility for leadership development in addition to rewards and incentives, has a significant role to play in this evolution.”

The three areas the report identified are:

• The Changing and Disengaged Workforce: Organizations are asked to create a sense of purpose and help balance work/life demands, build an environment of continuous learning, and actively forecast the workforce skills and characteristics for the future.
• Outdated Organizational Structure and Processes: Near-term solutions include actively moving away from command-and-control style models toward a more collaborative environment, leveraging the push for flexibility to create a fit-for-purpose workforce, and selectively and strategically deploy technology that builds efficiency.
• A Stagnant Leadership Profile: Directors and senior managers can renew their commitment to succession planning and leadership development, looking long-term beyond just the C-suite and cultivating a diverse executive talent pool with unique experiences, skills, and attributes necessary to enact business strategy.

The report also notes the role of the workforce is evolving and that employee expectations of the companies they work for have become stronger and employees have much greater influence.