From Day One

5 Priorities for 2025: How HR Leaders Plan to Meet a New Wave of Change

In 2025, HR will be at yet another inflection point. With high levels of employee detachment, anxiety about the arrival of AI, and a huge demand for new skills, corporate CEOs are saying to their chief people officers (CPOs): We need you to fix these things. And by the way, restructure how your own HR operations run–and keep spirits high too!It’s a lot, but chief HR officers are gearing up for another wave of change, even after the incessant disruption in the five years since the pandemic arrived. The consulting firm Heidrick & Struggles interviewed 70 chief people officers around the world about what it takes to do the job. Jennifer Wilson, the co-head of the global HR-officers practice at the firm, wasn’t surprised by the substance of their findings—artificial intelligence, generational changes, and the need to adapt to a stream of curveballs are all priorities they expected to find. What surprised her is the urgency that CPOs expressed, and the evidence that CEOs are leaning so heavily on them for answers. CPOs are super-connectors, the report says, with demands on their attention coming from all sides. As a result, “progressive organizations are playing with their HR functional models,” Wilson said.From Day One spoke to HR leaders and the consultants who work with them about their plans for the new year. Among the myriad responsibilities on their plate, what will they focus on in 2025? This is what they told us they plan to do.Renew the Focus on Company CultureSpeculation about the future of work once conjured images of workers zipping around the office on hoverboards, said Dan Kaplan, senior partner at consulting firm Korn Ferry. Now, futurists train their focus on culture. “It should be the guiding light for companies,” he said, but “they’ve gotten away from that.”The percentage of U.S. workers who say they’re thriving in life has hit a record low: Just 50% of workers Gallup surveyed in 2024 are feeling good about their current life and future prospects, a figure that has declined in the past decade. Gallup also found that employees are detached from their jobs. The chief culprit: rapid organizational changes and the persistent uncertainty around flexible work schedules. If CPOs are still fighting with their CEOs and boards about workers returning to office in 2025, “then you’ve lost,” Kaplan said. The HR leaders who will win are those that can push executives closer to their employees, and inspire them to deliver.Elaine Becraft, the SVP of HR at global medical-tech company Siemens Healthineers, believes that company culture must connect workers to each other and to the mission of the business. Long gone are the days of clocking in and clocking out to collect a paycheck. In 2025, she’s going to focus on holistic employee care.Workers need a new relationship with their employers, and that responsibility has been handed to HR. “There is a recognition that the workforce overall is tired,” said Wilson at Heidrick & Struggles. “We’ve been through a lot over the last few years. The nature of work is changing. Mental health issues in the western world are more prominent than they’ve been in the past, and that’s really become a reality for chief people officers.”Get to the Next Steps on AIArtificial intelligence is unavoidable, but there’s a gap between expectations by CEOs and the actual embrace of AI by workers. “So far, employee adoption of AI in the workplace is lagging behind the hype,” Gallup reports. If your company isn’t an early adopter, it’s probably trying to catch up. Among the innovators is media agency VML, where the global head of organizational development, Loren Blandon, is prioritizing AI upskilling. “In our industry, it’s really critical that we position ourselves as a leader in integrative use, application, adoption, and innovation of AI. We need people fully embracing and using it,” she told From Day One.How do you get world-class creatives to adopt technology that poses an immediate threat to their jobs? “You have to show them that it’s going to amplify their work,” Blandon said. “Then you get them to understand that whether you accept this or not, it’s coming, and it’s in your best interest to start using it rather than fighting yourself into being obsolete.” She’s found that many who dig in their heels just haven’t experimented with AI yet. But when you invite them in and show them how to play, the wheels start turning, and suddenly it’s cool.Ninety-one percent of early-adopting firms report positive results with AI, including increased productivity and cost-savings, according to a report from the Institute for Corporate Productivity, or i4cp. And companies that operationalize AI will outpace their peers.Workforce concerns about AI will continue, with employees anxious about their being displaced or replaced. “That has landed in the CPO’s lap,” said Wilson. HR executives are responsible for equipping the workforce with AI skills, but with no precedents for use, it’s still not always clear when, where, how, or why they’re meant to apply those skills–at least not yet. Of course, HR has its own misgivings about AI encroaching on its territory, and CPOs will have to quell concerns from their own teams at the same time they upskill their colleagues.Invest in the Skills-Based WorkforceForget the traditional concept of a job. It’s a skills-based world now, with much more malleable definitions of roles and projects. And “until companies shift their cultures, efforts to scale skills-based marketplaces will stall,” i4cp’s report says.In a skills-based workforce, employees flow from one assignment to the next, pick up skills in fractional roles, dip into new teams with temporary projects, and volunteer their expertise in new departments. Ideally, all work is promotable and company tenure is no longer a deciding factor. There’s a large share of the workforce that may be attracted to the fluidity of skills-based work. Sixty-five percent of workers feel stuck in their current roles, according to a Glassdoor survey, a situation that can breed resentment. “It used to be that you stepped into a defined job with tasks, and that was your role all the time. Now it’s more project-based,” said VML’s Blandon. For one team you might be the brand leader, and for another you’re the project manager. “I think jobs need to be fundamentally redesigned to tap into people’s ‘gig desires.’ They want to bring more skill sets to the table. They want to explore more things, and I think we can be savvy in leveraging that.”Maintain a Commitment to DEI, But Change the LanguageDespite recent high-profile changes in diversity, equity, and inclusion (DEI) programs by the likes of Walmart and Ford in the face of anti-DEI activists, the overall corporate commitment to DEI’s principles isn’t dead. “Activists are overstating the surface-level changes many companies are making to get rid of the heat,” CNN reported this week based on a review of company policies. “Nearly all the largest companies in America still say they are committed to promoting DEI.”Companies are motivated to persist with the principles of DEI because, in an increasingly diverse population, it has been proven to be good for the bottom line, as well as employee retention and motivation. That said, companies still want to avoid the political flak, so they have shifted the emphasis of their language, focusing more on inclusion and belonging. The values have already been operationalized and, in some cases, leaders have asserted that they have not abandoned those values, but are waiting to see what the temperature will be under a second Trump Administration before speaking out more.How can HR make sure thier companies evolve their practices, and not just the labels? The NeuroLeadership Institute’s DEI Impact Case recommends three actions that organizations can take to maintain their investments in DEI, no matter what they’re calling it, as Fast Company reports: “prioritize diversity by aligning it with specific business goals, habituate inclusion through targeted learning and performance tools that integrate it into daily practices, and systemize equity by examining policies and procedures to embed and sustain fairness throughout.”Reshape Organizational StructuresThe new skills-based economy is shaking up corporate structures, and companies are “delayering” their organizations, removing expensive middle managers believed by some to stymie productivity, while companies are also trying to teach managers to be more effective. Blandon says we’re due. “When was the last time we truly thought about reframing that? Manager, subordinate. It hasn’t been really tweaked in a long time, and people are questioning it.”Some companies are delayering to usher in the next generation of executives. Baby Boomers in the C-suite are retiring, and “you’ve got to get that next layer ready,” Wilson said. As vacancies open en masse, “how do you make sure that you don’t have business disruption from that newness?”Kaplan hopes that a shallow hierarchy will shrink the distance between the CEO and the rank and file–and motivate the workforce. “The CEO should be the most inspiring leader in the company,” he said, and by bringing workers closer to their leader, they may feel more connected to the company.At many comppanies, the HR department is getting a reorganization of its own. The traditional “centers of excellence” model, in which HR segments specialize in narrow disciplines, is on its way out, and a cross-functional model, in which HR teams are multi-skilled and capable of working with all departments, is gaining popularity. People ops no longer waits for requests, but goes problem-solving on its own. “We’re seeing agile teams form and disband for specific organizational issues,” said Wilson.Experiments abound. Some companies have moved all administrative tasks to a general shared-services center, leaving HR to “focus entirely on talent, leadership, succession, bench strength, organizational design, and [organizational development].” And, according to Wilson, this could be “a smart way to get HR out of the administrative chains that it’s been under for so many years.”Maybe it’s time for HR and people operations to get a new name? “Talent operations,” Wilson suggested, but then paused. Even that suggests the team is doing more admin than it really does, and the discipline continues to grow. “Maybe talent advisors?” Whatever the name, she said, it should demonstrate that talent is at the center of its responsibilities.“We’re like the lookout on a boat,” Becraft said about her team at Siemens Healthineers. “We see issues, challenges, and opportunities coming toward the company, and it’s our responsibility to bring those to the right people and make sure they understand what’s going on out there.”Emily McCrary-Ruiz-Esparza is a freelance journalist and From Day One contributing editor who writes about work, the job market, and women’s experiences in the workplace. Her work has appeared in the Economist, the BBC, The Washington Post, Quartz, Business Insider, and Fast Company.(Featured image: Photo by Kobus Louw/iStock by Getty Images)

By Bill Saporito | December 14, 2024

The Roots of the Rage Against the Healthcare Machine

Most of us, sad to say, realized last week that we can comprehend the anger that drove 26-year-old Luigi Mangione—a privileged Penn grad and tech whiz—to allegedly murder Brian Thompson, the CEO of UnitedHealthcare, as the executive walked alone to an annual investors meeting in Manhattan.UnitedHealthcare, part of United Healthcare Group, which ranks No. 4 on the Fortune 500, is what’s known in the industry as a payer. That’s a term that might enrage a lot of people, especially anyone whose claim has been turned down for any of seemingly a million reasons and therefore is on the hook for medical costs. The payers are even using AI to process claims and make denials, taking humanity out of the process of caring for humans. Doctors say they are fed up with fighting insurance companies about providing needed medical treatments to their patients. In a manifesto found in his backpack after he was arrested, Mangione proclaimed: “These parasites had it coming.”The source of the shooter’s motivation is complicated. A product of a wealthy, well-connected Maryland family, a computer-engineering graduate with a master’s from Penn, he was social, and loved playing computer games and designing them. But he also suffered from spinal problems and severe pain that had led to spinal-fusion surgery. His reading list included anti-corporate tomes, including Unabomber Ted Kaczynski’s screed. Six months prior to the shooting, he cut himself off from family and friends. They begged him to get in touch but he apparently went someplace very dark instead. He emerged a murderer, police say.The coldblooded killing of a corporate executive triggered a similarly coldblooded wave of public vitriol directed toward Thompson and his company. Yelp reviews from hell itself. Wanted posters with pictures of health-insurance executives began popping up on Manhattan lamp posts.We know the drivers of this heartlessness toward Thompson and his peers. Healthcare bills are a leading cause of personal bankruptcy. And our money does not buy healthiness, which Mangione noted in papers found in his backpack. The U.S. spends more per capita on healthcare than any other nation, yet in medical outcomes we are not even in the top 10. In a recent Gallup poll, the segment of Americans who rated healthcare quality as “good” or “excellent” dropped 10 percentage points since 2020, to 44%. Not surprisingly, respondents rated healthcare insurance coverage even worse: 28% rate coverage as excellent or good as opposed to 41% in 2012, the high point, says Gallup.One winner in all of this: UHG, which earned a net profit of about $6 billion. That was in the third quarter alone.The vicious response to Mangione’s alleged actions reflects both the state of social media and the state of corporate America. The former allows anonymous individuals to display the most vile aspects of human nature—and then amplifies them. The latter reflects industry concentration that leaves consumers with fewer choices, and to some degree, powerless and voiceless. And angry about it.That’s true whether you are buying eggs or chickens in the supermarket—and remember that food-price inflation helped drive voters to Donald Trump—cell-phone service or health insurance. The McDonald’s in Altoona, Pa., where Mangione was arrested after an employee called the cops on him was flooded with negative reviews, as if a fast-food chain was part of the corporate conspiracy to suppress consumer discontent. Et tu, Mickie D?The UnitedHealthcare headquarters in Minnetonka, Minn., lowered its flags to half-staff last week honor of CEO Brian Thompson, who was fatally shot outside a hotel in Manhattan. (Kerem Yücel/Minnesota Public Radio via AP)Mangione spoke for many of these disenfranchised consumers, and in the worst possible way. You know this feeling of being seemingly without options. I’ve witnessed it at airports, when an angry, disgruntled—and clueless—passenger loudly informs a gate agent that “I’ll never fly this airline again.” Fat chance. You will, in fact, fly this airline again or you can drive across the country because Delta, United, American and Southwest control 80% of domestic airline traffic.This frustration is one reason that assaults on airline employees skyrocketed in the “revenge travel” period that followed the Covid pandemic. People were jammed into full flights, hit with multiple charges for seat selection, checked bags, early boarding, or whatever else the carriers could dream up. Is it any wonder that a number of them lost their shit? The problem, once limited to an occasional belligerent drunk, became so acute that the Federal Aviation Administration had to crack down on the growing number of miscreants, in some cases fining passengers $36,000 for attacking airline personnel.The frustration is everywhere and employees are feeling it. Recently I showed up at my local Hertz station in Manhattan to pick up my rental reservation; there were no cars. So I started getting agitated—and I am now practiced at this because this wasn’t the first time Hertz came up short. I was in mid-harangue when the agent pleaded: “I’m just a minion; it’s not my fault.” Fair enough. “But who else am I going to yell at?” I asked her. We’d both been through this before. Hertz had hung us both out to dry. The shooting is also a grim new chapter in our heavily armed society. We’re all too familiar with workplace shootings—going postal–in which a disgruntled employee or former employees take lethal umbrage on his boss and co-workers for whatever bad treatment or perceived slights they might have endured. But now it is seemingly the customers who are raging for revenge.This corporate assassination is raising the risks for everyone, from customer-facing employees to the big boss. But the CEOs will be able double down on their security; the front-line people will be more or less on their own. UHG’s employees, who number about 440,000, tend to like the company they work for. Until last week, the headquarters team labored in relative anonymity in Minnetonka, Minn. Now many of them feel they are under siege, likened to criminal accomplices working for a nefarious company. As one employee said. “[W]e all do the best we can to do a good job in the system we are in.”UnitedHealth, and other health insurers, have argued for years that consumers are well-served, and satisfied, by the current system. They probably have customer surveys that endorse this view. So do airlines. So what? Clearly the status quo is unsustainable. The anger that UHG’s system has generated has done what few issues in America can do: united Democrats and Republicans. Bipartisan legislation was introduced this week to break up some of the largest healthcare conglomerates by selling off their highly profitable pharmacy-benefit managers (PBMs), the drug middlemen often blamed for high prescription prices. The three biggest ones—CVS Health’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx—control 80% of prescriptions in the U.S. “Critics complain that the conglomerates use their size and leverage to steer patients toward their own pharmacies, increasing costs for employers and government programs while driving independent pharmacies out of business,” the New York Times pointed out. Consider that the first round.This week I happened to have a lunch scheduled with the CEO of a healthcare-related tech startup, the source for a story I’m working on. He showed up without any security, and he didn’t plan to engage any. His company isn’t a “payer.” In fact, it helps corporate clients push back against the payers to lower their employee healthcare-insurance costs. Payers such as UHG hate me, the CEO told me, because he was attacking their profit machine. And Americans, as we now know, hate the payers even more.Bill Saporito is an editor at large at Inc. magazine whose work has also appeared in the New York Times and Washington Post. Previously, he worked as an assistant managing editor at Time magazine and as a senior editor at Fortune. He has written for From Day One on the power gap among labor unions, the myth of the “woke” corporation, and the perils of getting technology and people misaligned.Featured photo, top: alleged murderer Luigi Mangione is escorted into a Pennsylvania courthouse this week (AP Photo/Gary M. Baranec)

Bridging the Gap: Empowering and Supporting Women in Leadership

Women hold just 28% of C-suite roles according to a 2023 Women in the Workplace Report. This is a record high, yet still far from equal representation. So why aren't there more? During an executive panel session at From Day One’s Brooklyn conference, leaders discussed the best pathway forward, built on trust, understanding, and respect.We’re now at a pivotal moment to make a change for women’s representation in the workplace. “We’re at a breaking point because AI is what everyone's talking about. [Women] are three times less likely to put their hand up for proactive training as it relates to AI. Only 20% of leaders in AI are women,” said Anita Jivani, global head of innovation at Avanade. “We know in about 10 years, 90% of jobs are going to be impacted by AI. If that’s the case, and we’re not playing around personally and professionally as women in this space, we’re already lagging.”But while AI is certainly at the forefront of everyone’s minds, there’s more to the leadership gap than technology alone. “There are some really deeply entrenched and systemic reasons why there aren’t more women in the C suite, and one of those is gender bias and stereotypes,” said Lisa Moore, chief people officer at Yahoo. Even young people are still holding on to outdated notions of what an executive should look like. “There are a lot of different strands to a leadership skill set today, and they don’t all look like one thing.”Covid shed a light on the workload gender gap—both in the workplace and at home. “Since the pandemic, productivity has increased notably every year for women leaders,” said Laura Lomeli Russert, head of executive engagement at BetterUp. “With that increase, what else might have increased? Burnout.” But that has not been the case for men, as they still don’t hold as many housework responsibilities as women. Combine this with the fact that women feel that they must maintain high productivity to get to the next level of their careers, and exhaustion takes hold.Preventative and Proactive ToolsOrganizations can take steps to support women in their career growth while allowing them the flexibility to maintain a healthy work-life balance. Possible tools include employee resource groups, mental health support, and career coaching. It’s on HR to make sure that the tools are easy to access and understand. “Are you providing the right tools, and are they easily found by anyone in that company?” said Matt Jackson, GM, VP of Americas, Unmind.“AI has the potential to democratize access to resources or anything that is otherwise unavailable to people right now, across all genders,” he said. Jackson also refers to a longstanding homogenous leadership layer at the top of many companies that may be a barrier to focusing on “soft” offerings like mental health support. Coaching those male executives on compassionate leadership can make a difference.Executive panelists spoke about ways to support women in leadership rolesRemote work options have allowed workers the flexibility they need to accomplish their household tasks during working hours, so that they have leisure time leftover at the end of the day. But with return-to-office mandates coming down fast and fierce, the threat of burnout is on the rise.“We know from data that any underrepresented group in the workplace expresses a preference to be able to exercise flexibility and work-from-home with some degree of discretion for them,” Moore said. “One unconscious bias we have is that being in an office makes you more productive. That is categorically false.”You might feel more engaged in-person, Moore says, but ultimately, the sweeping decision is hurting women and underrepresented groups, who lose the ability to manage their own time and “be themselves” in their space of choice.It’s not just biases that come down to gender or racial identity, says Antoinette Handler, deputy chief HR officer and chief people officer, Americas at Dentsu, noting that as an introvert she thrives in a lower-pressure work-from-home set up. “It’s also a bias about different ways of working, your different personality styles, your different leadership styles,” she said.But striking the right balance is important, panelists noted, citing the loneliness epidemic and lack of engagement that has plagued workers since the pandemic. Most agreed hybrid work (but not a full RTO mandate) can help strike the right balance, even if in-person gatherings happen only quarterly.Amping Up Your Benefits OfferingsFor companies that do mandate at least a partial return to office, adjusting their benefits program can help offset some of the loss of flexibility felt by women employees. “Offering better childcare could be a great solution for that,” Lomeli Russert said. “That might actually make parents excited about going back to work!”Organizations also need to be flexible in offering resources to an aging and changing workforce. “The whole leadership structure is going to change. Half of middle management will be people who started onboarding during Covid. They don’t even understand the concept of working in-person. The next generation [is] more oriented toward values, and they care about skills more than what Ivy League school you went to. It’s a totally different game,” Jivani said. One way to maintain flexibility is to stop talking in absolutes. “Companywide mandates are too broad. The day-to-day is more important,” Jivani said. “Happiness and retention are tied to your ability to connect to your manager.”Gen Z’s focus on health and wellness also means HR needs to take company culture and support resources seriously to nurture the next generation of leaders. “People entering the workforce now have a much higher expectation of the culture that you create and that you provide for them,” Jackson said. “For so long, we’ve been able to ignore that, because driving people to the point of burnout has led to hitting numbers that you need to hit. But now we have a big enough generation coming in who says, ‘No, I don’t like that. I don’t want that. I’m going to go elsewhere.’”Lowering the PressureManagers, many of whom are women in the sandwich generation, in charge of childcare and elder care at home, are especially feeling the crunch in today’s workforce. “They're told to manage stakeholder expectations of the executives [and] at the same time, pass down messages that they don’t necessarily believe in,” Jivani said. “I think the best investment we could do is invest more in managers,” she said.Companies should provide managers with the time and the training to develop the skills they need to thrive. “It’s not a coincidence that a lot of women leave the workplace at that management level,” Jivani said. Many women at that mid-level also struggle when returning to the workforce after parental leave. “How can a company and managers create a positive experience of reintegration into an employee's job?” asked moderator Emma Hinchliffe, senior writer and author of MPW daily newsletter at Fortune. Extending the length and flexibility of parental leave offerings is one way to lower the pressure.“You’re expected to carry a human for nine months and work up until the point you give birth, but get back to the office after 12 weeks or we’re not paying you? That’s absurd,” Jackson said. He suggests a method called the “20% contract,” where managers and new mothers discuss what doing just 20% of one’s former job might look like, and allowing the mother to slowly work her way back up to giving 100% when she’s ready. It all comes down to trust and respect.Creating a welcoming environment where women leaders feel fully supported takes time, planning, and nuance. Simply put, Lomeli Russert said, “We all have a lot of work to do.”Katie Chambers is a freelance writer and award-winning communications executive with a lifelong commitment to supporting artists and advocating for inclusion. Her work has been seen in HuffPost and several printed essay collections, among others, and she has appeared on Cheddar News, iWomanTV, On New Jersey, and CBS New York.

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