In this disruptive time, HR and Talent Acquisition must be perfectly aligned with organizations’ business strategies. However, recent research from Eightfold AI and 3Sixty Insights highlights a significant misalignment between the two. This misalignment creates challenges that impact everything from hiring to employee satisfaction and ultimately negatively impact long-term organizational success.
So, why is this misalignment happening, and what can HR leaders do to address it? Could AI help bridge the gap and drive better outcomes for both HR and the wider business?
My guest this week is Teresa Wykes, Senior Director of Talent-Centered Transformation at Eightfold AI. Teresa shares valuable insights from the research, and we explore some of the root causes of the misalignment and assess potential solutions to the problem.
In the interview, we discuss:
• Business strategy development. C-Suite collaboration and talent strategy alignment.
• The extent and causes of misalignment of HR with the business
• The implications of prioritizing an administrative culture over strategic initiatives
• The crucial difference between being data driven and data literate.
• How HR is deprioritizing the activities that could help them achieve their objectives.
• Solving the problem
• The new skills needed in HR and Talent Acquisition teams
• Dealing with resistance to change
• What does the future look like?
Access the full report here – Aligning the Path Forward: How to Bring HR and Business Strategy Together.
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Matt Alder [00:00:00]:
Support for this podcast comes from Eightfold AI. Eightfold AI’s market leading talent intelligence platform helps organizations retain top performers, upskill and reskill their workforce, recruit talent efficiently and reach diversity goals. Eightfold’s patented deep learning artificial intelligence platform is available in more than 155 countries and 24 languages, enabling cutting edge enterprises to transform their talent into a competitive advantage. For more information, visit Eightfold AI.
Matt Alder [00:00:57]:
Hi there. Welcome to episode 665 of Recruiting Future with me, Matt Alder. In this disruptive time, HR must be perfectly aligned with the business strategy of its organization. However, Recent research from EightfoldAI and 360 Insights highlights a significant misalignment between the two. This misalignment creates challenges that impact everything from hiring to employee satisfaction and ultimately negatively impact long term organizational success. So why is this misalignment happening and what can HR leaders do to address it? Could AI help bridge the gap and drive better outcomes for both HR and the wider business? My guest this week is Teresa Wykes, Senior Director of Talent Centered Transformation at Eightfold AI. Teresa shares valuable insights from the research and we explore some of the root causes of this misalignment and assess potential solutions to the problem.
Matt Alder [00:02:01]:
Hi Teresa and welcome to the podcast.
Teresa Wykes [00:02:03]:
Hi Matt, thank you for having me.
Matt Alder [00:02:05]:
An absolute pleasure to have you on the show. Please could you introduce yourself and tell us what you do?
Teresa Wykes [00:02:11]:
Sure. So my name’s Theresa. Teresa Wykes and I joined Eightfold AI earlier this year. EightfoldAI is a talent intelligence platform that companies use to allow them to hire. And develop their talent through automation and AI driven insights. And I’m part of the Talent Center Transformation team. What we do is work with organisations to support them through various aspects of their decision to partner with us. So that’s things like moving from a transactional to a strategic talent approach or becoming a skills based organization or using talent intelligence and everything that that entails.
Matt Alder [00:02:48]:
Eightfold have recently published. It’s a really interesting report. It’s picking up on what you were saying about being strategic. It looks at really what we can only describe is the misalignment between HR and the strategy of the business. I mean it’s a really interesting read. I mean how bad is that problem. And what are the implications of HR talent acquisition being so misaligned with the overall business’s strategy?
Teresa Wykes [00:03:13]:
Well, I’m glad you found it interesting, Matt. So yeah, so first of all, let me just give a couple of bits of context to the survey, just, just to sort of clarify why we, why we get involved in this. So a survey like this will tell us quite a lot about the maturity of the HR market. And then in turn, that tells us a lot of things about HR sentiment towards AI and their propensity to look at new technology for their businesses. And it also tells us where they might be on their skills journey, for example. And we partnered with 360 so that we could be more objective. Sorry about that. And, you know, given our customers are mostly HR people, we really wanted to understand their alignment to their businesses, as we are discussing here today. So the survey gives us data that’s current, that’s obviously quite powerful. And I think, you know, it’s a given that at the moment the environment is uncertain and we all need to be dynamic and agile, et cetera. But what we really wanted was to look at what’s creating those changes so that we can think about how to make leadership better and how to optimize our workforces. And, you know, Eightfold, we, we want to be thought leaders, so we want to be at the vanguard of those conversations. You know, and it’s, you’ll know this, it’s a very lively time, especially right now and over the last couple of years as HR is redesigning itself. So I think, I think broadly speaking, the survey’s given us the opportunity to create a lot of inward reflection for HR about what the priorities should be. But getting into it, and to return to your question, and in terms of how bad the problem is, well, if we start with some numbers, so only 18%, that’s 1 in 5 of HR leaders, and we had a sample of 500 for this survey told us that they are fully aligned with the business, and that’s based on how they integrate across three key areas. So that’s business strategy development, C suite collaboration and talent strategy alignment. And then if we break that data down a little bit More, just to illustrate, 52% said that they regularly collaborate with the C suite, so that would suggest a more proactive kind of driving approach to relationship management. Still only half, though, that are actually regularly collaborating with the C suite. And then 38% say that they occasionally collaborate, so that’s probably a more reactive cohort there. And interestingly, 44% of the survey respondees said that their talent strategy was fully aligned to business objectives, 43% said mostly aligned, and that’s less than half. I think that’s rather interesting, slightly daunting, because, you know, if you think talent is probably the most accountable part of HR because it is so measurable, so not brilliant, you know, for less than half to be aligned to the business.
But I think, you know, in terms of how serious that is, well, obviously downstream it’s going to have effects on the efficacy of any talent strategy, the overall organization and general business needs. You know, 69% of the respondents said that they were a bit worried about their ability to keep up with the pace of change in their company and also alongside that, keeping up with the HR needs of their employees. And obviously that’s not great because the longer HR remains misaligned, that’s going to get worse. So we are going to cover some more of that later. At the same time, though, we looked at employee satisfaction, I think these two go hand in hand. And that employee satisfaction in this survey came out at 61%. So, you know, very well documented that low employee satisfaction will negatively impact performance. Then if you’re not happy for work, you look elsewhere. And we found in our survey that actually 82% of all employees admitted to looking for a new job in the last 12 to 18 months. And, you know, no surprise, paying culture with the leading drivers for that. And then another misalignment, these employee numbers, you know, juxtapose the three out of four HR leaders in the survey who report that they had what it takes to help employees grow in their role, yet they still struggle with staffing challenges. So I think there’s something there, quite big, about the fact that current HR and corporate initiatives are a bit out of step with what employees need and want, and they’re thinking with their feet. So, yeah, that’s a sort of overview of the negativity of this situation.
Matt Alder [00:08:04]:
Yeah, I mean, there are some quite scary numbers there in terms of how bad some of that sort of misalignment is. And as you say, the implications are pretty serious. What do you think’s causing this? Because, you know, I’m sure that, you know, no one does this on purpose. So what do you think some of the root causes behind it?
Teresa Wykes [00:08:21]:
There’s a lot of. There’s a lot of noise at the moment about what HR should be, what talent should be, how it’s changed, et cetera. I think for HR and business alignment, it has to come back to communication and how HR is working with other departments. I think it also raises the question of to what extent HR ensures that they are actually properly understanding the company’s. Strategic goals and how they go about that. It might also be something about maintaining an administrative culture rather than aspiring to represent strategic initiatives. And I think there’s a big one as well about the language that’s used to communicate with the business. You know, I think HR needs to look at whether it is data literate as opposed to being data driven, which is something different. Is HR using data that’s good? Is it relevant? How is that data being used to inform decisions? It’s probably HR’s job to be the ones who own the understanding of the talent market, not the business. So how they use this knowledge is very, very important, and I think that might tell you whether the business perceives HR as a purely transactional or compliance focused function rather than a true strategic partner in driving business success you know, and HR often gets sidelined because they hired the wrong people badge. It’s up to HR to make sure that the business has the right idea in the first place.
And that’s down to how they set expectations through data and, you know, reality checking. I think there’s often a, you know, the business only knows what they know, whereas HR has actually got access to the whole of the market so why would they not, you know, use that information to coach and you know, set, set the truth of what’s actually out there. So I think, yeah, big piece there about relationships, aptitude to be aligned to the business. You know, does HR know how to be aligned to the business in the first place? You know, I think sometimes it’s not happening because people don’t know how to do it rather than they’re just not doing it or they’re focusing on something different. And I do think as well, Matt, there might be something as well about the way that we’re working at the moment you know, it’s not so much about, well, I mean, whichever side of the fence you sit on about remote working or return to office, it’s definitely got consequences for how not only relationships are built and maintained, but how information gets communicated and passed around teams and I think I’d also say that, you know, HR does tend to focus on short term wins or maybe, you know, incremental steps towards a result. And that then gets reflected in the way it gets measured on short term factors. Whereas I think taking a more strategic view will just give HR more to work with and is more aligned with perhaps where the business is going.
Matt Alder [00:11:18]:
A really interesting section of the report illustrates that HR is actually deprioritizing areas and activities that could actually help them achieve their objectives. Take us through what’s happening there.
Teresa Wykes [00:11:29]:
That’s right. So we asked a set of questions around the relative importance that HR leaders are giving to various topics so they ranked understanding their workforce’s skills and capabilities as the second most crucial factor. The first most crucial factor was retaining top performers. However, our survey said that gaining a better understanding of the skills makeup of their talent networks was actually last on their priority list for the next 12 to 18 months. So just to give you a bit more detail here, because I think it is interesting. So top business priorities for HR leaders are recruiting better candidates to the talent pool, lowering turnover and identifying high potentials to promote internally. And again, not surprisingly, recruitment marketing platforms consistently rank as a top investment, especially amongst those who are quite advanced with their AI deployment. At the same time, HR leaders said their bottom three organizational priorities were speeding up the hiring process, analysing workforce data and better understanding the skills makeup. So straight away there’s a disconnect there because the bottom three priorities would actually help address the top three priorities. So, you know, something’s not getting its act together. There’s, and I think, you know, one in five, that’s 20% of HR leaders saying they have little to no insight into the skills makeup of their workforce. The correct skills data is just not being looked at. And what that means is that their hiring practices are actually not backed up by anything tactical or anything strategic, hence misalignment.
Matt Alder [00:13:20]:
Just to go back to something you were talking about earlier and just dig a little bit deeper into that employee satisfaction issue, because that’s such a, such a big thing. I mean, you know, what other insights did you kind of get around, around that and the causes of it?
Teresa Wykes [00:13:34]:
This survey, employee satisfaction came out 61%. And, you know, there’s all sorts of Internet rabbit holes you can go down to, to benchmark that. But in terms of implications of that figure, incidentally, Gallup estimated an $8.9 trillion shortfall on productivity coming out of, which is, which is pretty massive. So that’s actually a 9% loss of productivity through people not showing up to work. I don’t mean literally not showing up, I mean, you know, in, in an engaged way, you know, and if you’re disengaged, you’re also not going to be inclined to grow or develop yourself proactively which is, which is further wastage. So, you know, it does have, it does have quite serious consequences. But, you know, in our survey, the quoted causes were fairly standard. Inadequate money, poor work, life balance and lack of career development are significant concerns. We did find that people who have a shorter length of service, so lower tenure has the lowest satisfaction and women are less satisfied than men. And then if we look at what the HR leaders have to say about that, well, half of those leaders that we surveyed said that gaining a better understanding of their talent network was a priority. So as well as recruiting better people and retaining top employees. But then, you know, the survey does indicate that the execution of addressing these priorities is actually quite hurtful to the employee’s perception of them and their overall execution. You know, and I think HR just needs to catch up a bit with employee needs. And, you know, that culture of where the employer tells you what you’re all about and what you need, it’s a bit out now. I think the company priority is, you know, is making sure that you retain the right people.
But I don’t think that intention is getting through to the workforce because they’re nearly all looking for a new job, and I think as well, there’s, you know, there just needs to be a bit more nuance and attention to detail around some of this things like, you know, generational diversity in terms of needs and expectations, because we are going to start seeing a lot of shortfalls directly related to generational cohorts and their skills. And that gets expressed in different attitudes towards work and indicators of engagement across different generations. If you’re part of the younger generation, you’re probably more interested in the meaning that your work gives you, whereas if you’Re older, it might be more about benefits. So it’s getting closer to your workforce treating them as people with needs and wants, just being, having a bit more of a kind of service culture, I think, both to your, to your workforce but also, also to your business.
Matt Alder [00:16:29]:
Absolutely. So let’s kind of sort of look at this in the, look at this as a whole, I suppose, in terms of the, you know, the misalignment and, and everything that’s, that’s going on. And I don’t think any of this will be a surprise to anyone listening because I think you can probably, they probably all experienced aspects of this. What, what’s the, what’s the solution? I mean, is this, is this something that AI and technology could, could solve? And if so, how, how, how, how might it do that?
Teresa Wykes [00:16:56]:
I think it can, Matt—I think, first of all, sometimes it’s better to rely on the talent you already have rather than looking outside, and if organizations don’t know what skills they need for the future, there are ways to assess that; a good plan and good technology can support a great hiring experience for both hiring leaders and the talent themselves, meeting expectations through increased awareness, better data, and investing in the right areas, though that takes effort and capital, and while greater attention to detail is necessary, some basics also need to be revisited, which might lead to identifying a different set of skills required for HR alignment, possibly through natural transitions from other parts of the business into HR, something we’re already seeing, while also ensuring HR and talent professionals are involved early in conversations, have the confidence to insist on being part of discussions, manage expectations around delivery, and make timely plans to ensure the company has the right people in place to achieve business goals; AI can certainly help by providing a comprehensive view of the talent life cycle, allowing organizations to plan strategically rather than reactively, predict future talent needs and current skills gaps, challenge incorrect assumptions about external talent availability, identify employees ready for upskilling or reskilling to enhance engagement and cost efficiency, empower teams to find new opportunities or projects, and ultimately drive productivity and alignment with commercial goals through talent intelligence and workforce analytics, which still have a long way to go but are a strong starting point for leveraging technology to address these challenges.
Matt Alder [00:21:14]:
That definitely makes a lot of sense. What do you think the future looks like? What do you hope the future looks like? What might technology make it possible to do in say, five years time?
Teresa Wykes [00:21:24]:
I reckon if we did the survey again in a few years, the questions would probably look a bit different given the pace of change, especially this year, and the outcomes would likely shift as well, alongside the emergence of a new set of KPIs for HR, talent acquisition, and talent management, some of which are already evolving; in practical terms, we’re probably looking at questions around increased automation, and if that truly takes off, the key thing to watch is whether HR embraces the opportunity to be strategic and has the capability to do so effectively, alongside improvements in tailored interfaces for a better user experience, which might lead to questions about how people interact with technology versus the aspects of their work that AI won’t support, and, though not my original idea, I agree that a greater part of HR’s remit could involve owning the relationship employees have with AI and ensuring that dynamic functions effectively, which, of course, has significant implications for daily work.
Matt Alder [00:22:45]:
So lastly where can people find a full copy of the report?
Teresa Wykes [00:22:49]:
So the full survey report is on our website. Eightfold AI. Everything is there to read. Full survey report, yeah. Should be interesting and relevant for many people.
Matt Alder [00:23:00]:
Absolutely. Teresa, thank you very much for talking to me.
Teresa Wykes [00:23:03]:
Thanks, Matt.
Matt Alder [00:23:05]:
My thanks to Teresa. You can follow this podcast on Apple Podcasts on Spotify or wherever you get your podcasts. You can search all the past episodes at recruitingfuture.com on that site. You can also subscribe to our weekly newsletter Recruiting Future Feast and get the inside track on everything that’s coming up on the show. This is the last episode of recruiting future for 2024 and I want to thank everyone who’s listened, shared, been interviewed or sponsored. I’ll be back next year and I hope you’ll join me.
