Creating People Advantage 2023

NOVEMBER 16, 2023

By Jens Baier, Vinciane Beauchene, Julie Bedard, Jean-Michel Caye, Philipp Kolo, Fang Ruan, Alexander Alonso, Anthony Ariganello, Kai Helfritz, Bob Morton, Lucas van Wees, Wilson Wong, and Jorge Jáuregui Morales

The goal is to help people management leaders identify the most urgent priorities in order to improve not only their own function’s performance but also the performance of the entire company. That kind of prioritization is always important, but in the current poly-crisis environment, it has become an imperative.

Key Highlights

This year’s analysis includes the following key highlights:

• Talent Gaps. Many companies do not have all the talent they need. Talent gaps and shortages represent the top business challenge that companies face, cited by 72% of respondents.
• Divided Attention. Companies are better at responding to pressing external factors (such as shifts in supply necessitated by the war in Ukraine) but less able to look ahead and focus on the people management priorities critical for success in the future. Respondents are stronger in topics that were critical during the pandemic—such as employee health and safety, more flexible work models, and policy management—although these are no longer their biggest priorities.
• Lagging Digitization. Digitization remains a crucial area for people managers, but digital capabilities (including HR IT architecture, operation, and cloud software) continue to lag in many organizations, making this topic an increasingly urgent priority.
• Core Priorities. Although each company must build the capabilities most relevant to its unique context, virtually all companies need to emphasize strategic workforce planning, talent acquisition, upskilling and reskilling, digitization, and accompanying change management and leadership behaviors.
• AI on the Rise. AI is gaining traction among people managers, but the vast majority of organizations are still at the earliest stages of adoption. First movers that have started to implement AI-based solutions are seeing tremendous benefits across a range of use cases in people management.

Recommendations for People Management Leaders

Our findings point to five recommendations for people management leaders to adopt in dealing with challenging times in 2023 and beyond.

Leverage data to accurately plan for talent supply and demand. Strategic workforce planning is a perennial challenge for most organizations. Although the core principles are not new, the urgency to act has increased, and the availability of data-driven insights has changed the competitive landscape.

Get better­ at talent acquisition. In a market where specialized talent is in short supply, digital technology can help companies differentiate themselves on the basis of the experience they offer applicants, leading to better success rates in recruiting and hiring new employees.

Invest in upskilling and reskilling the current workforce. Developing new skills in your existing workforce is far more cost-effective than hiring new people. Moreover, ever-changing technology confront companies with the need to continually refresh their workforce’s skills and capabilities.

Unlock value through AI. Generative AI has the potential to revolutionize self-service processes, boost productivity, personalize customer experiences, and build data-driven talent ecosystems. First movers are already capturing value with use cases along the entire HR value chain.

Focus on change management and organizational development. In the realm of leadership behaviors, change management, and organizational development, it is imperative not to underestimate the transformative potential—and pitfalls—of change. With this in mind, organizations are focusing more on the behaviors of entire leadership teams than of individuals.

Download the full report for a more detailed discussion of this year’s findings and recommendations.