HR’s Role in the Rise of the Social Enterprise

Human capital management is undergoing a profound change – the emergence of social capital as a key value driver for organizations is transforming how HR engages and interacts with both internal and external stakeholders to create a social enterprise.  

The 2018 Deloitte Global Human Capital Trends reportOpens a new window reveals a fascinating trend: The rise of the social enterprise. Skills gaps, demographic changes in the workforce, the current socio-political environment, and the large-scale impact of technological disruption have compelled organizations and business leaders to acknowledge the significance of social capital in long-term business success.

65 percent of CEOs surveyed, rated “inclusive growth” as a top strategic concern, more than three times greater than the proportion citing “shareholder value.” It is apparent now that businesses must take on a bigger role in the society and engage meaningfully with not only customers and employees, but also with local communities, regulators, and other stakeholders.

Jeff Mike, VP and Head of Research Ideation at Bersin, DeloitteOpens a new window , says, “The rise of the social enterprise means that businesses are increasingly expected to recognize that their organizations affect a much wider set of stakeholders than before, including customers, investors, communities, society in general and of course the workers in those companies. Addressing the complex set of challenges and opportunities presented by serving this wider set of stakeholders requires innovation and cross-functional collaboration throughout the organization. This starts at the top with what we call the ‘Symphonic C-Suite,’ whereby executives no longer operate in silos and hierarchies. Instead, they build agile networks of teams that can rapidly bring expertise and solutions to engage disruptions in the organization and throughout its environment.”

What is a Social Enterprise?

Deloitte defines a social enterprise as “an organization whose mission combines revenue growth and profitmaking with the need to respect and support its environment and stakeholder network. This includes listening to, investing in, and actively managing the trends that are shaping today’s world. It is an organization that shoulders its responsibility to be a good citizen (both inside and outside the organization), serving as a role model for its peers and promoting a high degree of collaboration at every level of the organization.”

In other words, a social enterprise is an organization that is responsive to the changes taking place inside and outside its confines to create a value chain that delivers on the expectations and demands of all its stakeholders.

With Millennials emerging as the largest demographicOpens a new window in the workforce, their beliefs, concerns, and expectations will have a lasting impact on how businesses operate. While baby-boomers thrived in a stable socio-economic environment, Millennials are increasingly worried about the emerging polarization in politics, their future financial well-being, and the impact of technology on the society. The report notes that “people today have less trust in their political and social institutions that they have in years; many expect business leaders to fill the gap.”

As employees, customers, and other stakeholders look to businesses to fill a widening leadership vacuum, organizations must begin investing in their social ecosystem. In the hyper-connected world, we live in, employees’ interactions with the outside world can provide organizations with critical information on the larger trends shaping their social ecosystem. Jeff believes this is where HR can play a pivotal role, he says, “Three important roles for HR in the social enterprise include being a player-coach in the Symphonic C-Suite, cultivating innovation and collaboration in the organization’s workplaces and culture, and developing future-ready leaders ready to excel at innovation, collaboration, and the social enterprise. Perhaps the most important capability for these roles is HR leadership that can bring a compelling vision for the social enterprise to the Symphonic C-Suite and influence other executives to operate successfully in this new paradigm.” 

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HR’s Role in the Social Enterprise

HR will be a critical driver of businesses’ shift to a social enterprise. Starting with employees, HR will play a central role in all of the seven aspects that will bring about this transformation. Here’s a glimpse of HR’s role in the social enterprise:

1. Build a culture of continuous learning: The very definition of a career as a mere occupation has changed. In the social enterprise, careers will a series of developmental experiences, offering employees the opportunity to learn new skills. HR will play a key role in designing learning programs that equip their workforce with the skills of the future.
2. Develop practices for continuous performance management: With productivity becoming the central tenet of human capital management, organizations are turning to performance management practices that help achieve business objectives. As performance management becomes a continuous process, HR teams must leverage HR technology solutions to leverage performance management into the natural flow of work.
3. Engage with emerging workforce models: With the changing composition of the workforce, organizations must extend their talent management approaches to workers across the ecosystem. This means HR needs to get involved in all decisions regarding contingent workers, contractors, and freelancers. HR must provide these workers with clear performance goals, secure communications systems, and offer training and support to drive productivity.
4. Offer personalized rewards: Even as organizations acknowledge the significance of match performance with rewards, most are yet to develop a concrete roadmap for execution. By deploying continuous listening solutions, HR teams can determine rewards that employees truly value. Providing personalized rewards also helps employees understand where they stand in terms of performance, and how they stand to benefit from their contribution to the business.
5. Accommodate older workers: As the talent landscape becomes more competitive, organizations must value and leverage their older workers to drive competitive advantageOpens a new window . The older generation represents a proven, committed, and diverse set of workers who can become a valuable resource for training and mentoring. 
   “Over the past decades, an increasing focus on user- and human-centered design has been unleashing some of the most powerful, disruptive and adaptable technologies ever seen, including smartphones and voice-user interfaces. HR can demand that their technology providers include the specific needs of older workers in this user- and human-centered design to drive greater adoption across multiple generations. As social enterprises themselves, many leading HR technology providers are becoming more proficient at responding to the increasing needs and expectations of their customers and stakeholders and will quickly follow suit with regards to older workers. As the half-life of “hard” skills continues to shrink, including older workers in the design of assistive and learning technologies can help address the need for continuous reskilling without having to train on the more costly and elusive ‘soft’ skills such as problem-solving, critical thinking and market proficiency,” says Jeff.
6. Employee well-being: While employee well-being strategies are not new to the workplace, well-being programs today cover a whole gamut of health, social and emotional well-being initiatives. Today it is essential for organizations to expand the scope of well-being programs to go beyond health and well-being to improving business performance.
7. People Data: As HR’s reliance on people analytics increases, there is a growing concern about data security, transparency, and associated risks. HR must collaborate with IT and legal teams to identify potential data risks and frame policies around the use and protection of employee data. HR will also need to engage employees as informed stakeholders who understand and support the benefits of people data for their work and careers.
    

The rise of the social enterprise compels organizations and HR to build social capital by engaging with all stakeholders in the ecosystem, preparing for external trends, and instilling a deeper sense of purpose and mission throughout the organization. In the future of work, human capital will be intricately tied to social capital which demands a fundamental rethink of current HR processes, activities, and strategies.