Navigating through unchartered waters: How building an adaptable mindset is critical for the transition to an adaptable organization

Posted by Aparupa BhattacharyaJoshua Akman, Cameron Wilk and Katherine Curran on June 26, 2020.

In these unprecedented times, we are seeing clients taking stock of the short and long term effects of the “new normal.” We know that this new normal will be defined by more virtual work, more flexible work arrangements, and call for increased agility on the part of the organization and the individual. This is truly a fundamental shift. It means moving away from the tried and true hierarchical structure, profit-driven, and silo’d organization to one that is designed to enable agile, purpose-driven, network-based teams. We refer to this as an adaptable organization.

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Change your mindset about change


Posted by Chris Havrilla, on June 23, 2020.

The inspiration for our High-Impact Technology Strategy research was less about technology and more about solving a puzzle. Organizations spend big money on their HR technology and expect it to drive change and transform the HR function, the organization, and the overall workforce. But why weren’t they realizing the promise, outcomes, or value from their digital transformation? Why didn’t transformation occur? Our research shows the answer may be because organizations didn’t approach these factors like a puzzle.

With a puzzle, you have a picture, a vision of what you want to create. That picture displays how the pieces fit together and can be used as the basis for a strategy to accomplish the project. However, our initial High-Impact Technology Strategy findings1 shared that, in many organizations’ efforts, some of the puzzle pieces were missing. Less than one-third of surveyed organizations have an HR technology strategy and just over one-third have a blueprint2 of their HR technology landscape. Our subsequent research interviews reveal that the latter data point may be aspirational at best.

Those findings make the case for rethinking HR technology strategy, with collaboration between HR and IT to design and execute that strategy, which is anchored by business and people outcomes. They focus on the foundation—determining what you want to do and why, and who should be involved. It’s now time to address the how.

Related links

2020 Global Deloitte Human Capital Trends
Purpose. Potential. Perspective.

Research & Sensing
Learn more.

The need for systemic change

Our quantitative and qualitative research reveals the nature of change is changing—and where it isn’t changing, it must. Our article on our newest findings3 explains that change management must evolve beyond changing systems (e.g., technologies, components) to embody systemic change (e.g., how people work and how work gets done in conjunction with technology changes). Many organizations train their people how to use new or updated technology, but they don’t always make the leap of training people how to work differently given the new tools. This is another missing puzzle piece.

A critical finding in this article reveals high-performing organizations are significantly more effective than low performers at changing how people work in conjunction with technology (see Figure 1).

Figure 1: Organizational Effectiveness of Systemic Change in Conjunction with Technology Changes

2020-03-06-DandI-Blog-Figure-1-v2

Organizations that fill this void give their people the ability to operate in a different way; this is the connection point to make work better and easier for them.

Expanding effectiveness can help organizations improve how their HR technology is perceived. The 2019 Deloitte Global Human Capital Trends report shows that while 74 percent of organizations rate HR technology as important or very important, only 6 percent state that their HR technology is excellent.4

Fall in love with outcomes, not tech

Our newest findings reflect on dimensions of our Technology Strategy Framework5 that focus on design and simplification of data, technology, and work architectures. We’ve learned this is where many HR teams struggle to support and shape real transformation. Overcoming the complexities of existing architectures is considered particularly hard work. As such, teams are frequently unable to get support toward this work or they avoid it altogether—even though design is often the root of the problem.

While HR teams are aware that change and action are needed, they’re often uncertain on how to execute both. Oftentimes, HR teams feel the burden of owning all the responsibility yet lack the actual authority to drive change. They tend to fall in love with technology and the thought of a cool “easy” button for change. While difficult to execute, systemic change—changing structures, work, behaviors—leads to progress. Technology can be a catalyst for change, and you should start with knowing your:

  • Strategy: The what and the why of this journey (business and talent outcomes)
  • People: The who (all members of the organization, not just HR)
  • Data: What to capture (and what not to capture)
  • Information: What to provide (and what not to provide)
  • Processes: The how of “the work” (beyond job architecture) and the how of the journey (experience)

After this comes the technology, which enables the strategy, people, information, processes, and outcomes.

This new mindset and shift are about falling in love with outcomes, not technology. Our 2020 Human Capital Trends report shows that HR can extend its influence across the business by addressing outcomes in this manner. With new tools come new opportunities for workers to learn how to wield them effectively and comfortably to make work better and easier.

Take the next step

Deloitte’s Research & Sensing members can access Four Findings That Underscore the Role of Change in an HR Technology Strategy and the additional articles, tools, and resources from this research series. If you’re interested in becoming a member, please contact Burt Rea (brea@deloitte.com).

As part of our ongoing research effort, we’ll continue doing interviews to learn more and go deeper into this subject. Please contact chavrilla@deloitte.com to participate and share your story!

Chris Havrilla, Vice President, HR Technology Research Leader, Deloitte Consulting LLP

1Four Top Findings Make the Case for HR Technology Strategy, Deloitte Consulting LLP / Chris Havrilla, Erin Spencer, Charu Ratnu, and Jeff Mike, 2020.
2How to Create an HR Technology Blueprint, Deloitte Consulting LLP / Chris Havrilla, Erin Spencer, and Charu Ratnu, 2020.
3Four Findings That Underscore the Role of Change in an HR Technology Strategy, Deloitte Consulting LLP / Chris Havrilla, Erin Spencer, Charu Ratnu, and Jeff Mike, 2020.
4HR Cloud: A Launch Pad, Not a Destination” from 2019 Deloitte Global Human Capital Trends, Deloitte Consulting LLP / Erica Volini, Jeff Schwartz, Indranil Roy, Maren Hauptmann, Yves Van Durme, Brad Denny, and Josh Bersin, 2019 .
5Interactive Technology Strategy Framework, Deloitte Consulting LLP / Chris Havrilla, Erin Spencer, and Charu Ratnu, 2019.

IRS Guidance Permits Additional Flexibility for Mid-Year Election Changes in Cafeteria Plans

Posted by Robert Davis on June 19 , 2020.

The Internal Revenue Service has issued Notice 2020-29 to give employers additional flexibility to allow employees to make mid-year election changes with respect to health coverage, health flexible spending arrangements (health FSAs) and dependent care FSAs during the 2020 calendar year.  For FSAs with grace periods or plan years ending in 2020, the Notice also permits plans to let employees apply unused balances to expenses incurred during the remainder of 2020.


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A few key points:

  • The Notice gives employers the option to offer more mid-year election change opportunities, but it does not require them to do so.
  • Employers that want to take advantage of all or part of the Notice probably will need to amend their plan documents to do so.
  • The permitted changes are prospective only.  Plans may not allow employees to make retroactive changes.
  • As of now, the special rules only apply in 2020.

Background

At issue are IRC § 125 cafeteria plans, which employers offer so that employees can pay for certain benefits on a pre-tax basis.  These include the employee’s share of group health insurance premiums, and contributions to health and dependent care FSAs.  The general rule is that participants must make their elections before the plan year (usually the calendar year) begins, and may not change those elections once the plan year has started.  However, current Treasury Regulations (Treas. Reg. § 1.125-4) allow certain exceptions for changes to circumstance, such as the birth of a child, getting married or divorced, etc.

Over the last few months, many employees have experienced changes that have forced them to reconsider the elections they made last Fall for the 2020 plan year.  For example, the sudden unavailability of childcare and summer camps means employees may not incur enough expenses to use the money they are putting into dependent care FSAs.  Additionally, the temporary suspension of non-essential medical services potentially limits some employees’ abilities to use their health FSAs.  However, the current regulations generally do not allow mid-year changes for these situations.

Summary of Notice

In general, Notice 2020-29 provides the following relief relating to mid-year election changes for calendar year 2020:

  • With respect to employer-sponsored health coverage, employers can allow employees to make a prospective mid-year change to (a) add coverage, if the employee initially declined to elect employer-sponsored health coverage; (b) change plan options; or (c) drop coverage  if the employee attests in writing that s/he has enrolled, or immediately will enroll, in other health coverage.
  • With respect to a health FSA, employers can allow employees to revoke an election, make a new election, or decrease or increase an existing election on a prospective basis.
  • With respect to a dependent care FSA, employers can allow employees to revoke an election, make a new election, or decrease or increase an existing election on a prospective basis.

Additional relief is provided for calendar year health and dependent care FSAs with grace periods that ended in 2020, and for non-calendar year health and dependent care FSAs for plan years ending in 2020.  Specifically, the Notice permits employers to allow employees to apply any unused balances as of the end of the grace period or plan year to otherwise eligible expenses incurred through December 31, 2020. 

For example, assume a participant in a calendar year health FSA still had an unused balance of $100 when the plan’s grace period ended on March 15, 2020.  Under normal circumstances the participant would forfeit that $100.  Under the Notice, however, the employer now has the option of letting the employee use that $100 to pay for expenses incurred after March 15, but no later than December 31, 2020.

Robert Davis is a managing director at Deloitte Consulting LLP and leads the Washington Rewards Policy Center of Excellence.

An Analysis of Health Care Supply Chain’s Response to COVID-19

A Three-Part Series

Posted by Jeff Petry, Paul Kreder, Paul Atkins, Harika Nandikanti and Dane Jeong on June 10, 2020.

Part 3: How can we improve the health care supply chain?

The last two blogs have focused on two distinct aspects of health care supply chain’s response to the COVID-19 pandemic – including what went wrong and what went well. Both blogs were focused on learning what we could from the immediate past, so we can plan for a more efficient and effective response in the future. The culmination of this series on health care supply chain’s response to COVID-19 will focus on that goal – how do we take what we have seen so far such as needed risk management & demand forecasting, rapid innovation, and collaboration across public and private sectors and make significant improvements for the future.

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Building engaging onboarding experiences in the context of virtual work

Posted by Denise MoultonMackenzie Wilson, Matt Deruntz on June 5, 2020.

Facing significant workplace disruption, today’s organizations have had to quickly rethink their talent processes and practices. Top of mind for many of these organizations is how best to support remote work. One critical aspect of talent work is the design of virtual onboarding experiences. High-performing organizations1 understand the importance of addressing onboarding as a companywide, integrated initiative that promotes belonging and enables productivity.2 How can organizations use the “new normal” to reconceptualize the traditional onboarding experience to help individuals onboard virtually?

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Designing for Horizontal Collaboration in a Vertically Siloed Organization: Walking a Tightrope

computer2

Posted by TiffanyMcDowell, India Mullady on June 4, 2020.

Imagine the tall glass skyscrapers of New York City.  These pillars go dozens of stories in the air and inside them are thousands of individuals working towards common goals.  But what if you need to connect these towers?  How do you get the message across?  Do you dig a tunnel underneath and relay on hidden or informal backchannels? Do you hire a private helicopter to shuttle a few select individuals from tower to tower, requiring great coordination and continued expense?

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Surveillance vs. Sousveillance: Focus on Collaboration

computer2

Posted by TiffanyMcDowell, India Mullady on May 27, 2020.

You don’t need to scrutinize your employees to boost their productivity. Surveillance, or watching from above during COVID-19’s work from home spike could be interpreted as virtual micromanagement. The initial reaction of some organizations has been to require their employees to download software that tracks website visits, key strokes, or even takes photos via their cameras to ‘prove’ they are working. These efforts ranging from standard IT security to more extreme invasion of privacy has left some employees feeling angry, hurt, and distrustful of their organization1.

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See into the future: The crystal ball of people analytics, part two

Posted by Kathi Enderes, Zach Toof on May 21, 2020.

In part one of our blog series on people analytics, See into the Future: The Crystal Ball of People Analytics, we explored the use of leading versus lagging measures (to look beyond the past and toward future-oriented inputs and actions) and how to frame future-focused questions. Both actions allow organizations to sense future-of-work impacts such as automation, the open talent economy, and the virtual workplace. Now in part two, we’ll explore how a listening architecture can develop an ongoing and actionable approach to sensing the future.

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Harnessing Technology to Unlock the Power of Communities of Practice (COPs)

Posted by Raviv Elyashiv, Marion Burgheimer, Matan Rotmanon, May 20, 2020.

Communities of practice (CoPs) are groups of people who share knowledge on a specific subject, and they have always been a great way for organizations to share knowledge with and among colleagues. The COVID-19 crisis has shifted the way people work and forced many to work almost exclusively in virtual, remote workspaces, which has resulted in people becoming physically isolated from colleagues. As a result, the crisis has reinforced the strength of CoPs as a critical means of knowledge management within organizations.

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Views of Health care Supply Chain’s Response to COVID-19

A Three-Part Series: Part 2

Serious businesswoman working late at computer in office

Posted by Jeff PetryPaul Kreder, Paul Atkins, Harika Nandikanti, Dane Jeong, on May 15, 2020.

Views of Health care Supply Chain’s Response to COVID-19

A Three-Part Series

Part 2: What went right?
COVID-19 has disrupted and challenged health care supply chain in unprecedented ways. In our first blog of this series, we explored the multiple factors that contributed to health care supply chain’s general inability to adapt and respond effectively to this crisis. Despite the complexity of this challenge, there are some areas in which the collective response excelled. This blog will focus on three areas in which much of health care supply chain thrived: (1) rapidly responding to these challenges with innovative technology, (2) new devices and techniques to expand the utilization / increase the conservation of existing products, and (3) increased collaboration in the private and public sectors.

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