The Corona pandemic acts as a catalyst for the transformation of DACH companies


Zurich, February 25, 2021


The COVID-19 pandemic and volatile markets have left deep scars on the world of work. According to Mercer's Global Talent Trends 2021 study, the focus of HR leaders in the DACH region (Germany, Austria and Switzerland) has shifted. In addition to organizational agility and the practical implementation of flexible working, the focus is also on targeted reskilling, binding requirements for D&I, improving the employee experience, and a broader view of corporate responsibility and sustainable change.


Change is multidimensional

The effective transformation of work requires harmonizing structures (methods, competencies, processes and tools) with corporate culture (values and leadership). 59 percent of HR leaders surveyed have set this as a goal, while 24 percent have already begun.


"Real change needs an even stronger alignment of HR concepts with business strategy. Successful transformation must also take into account all design dimensions, i.e. the entire field of tension of change from culture to technology ", says Michael Eger, Partner HR Transformation at Mercer Central Europe and author of the DACH edition of Global Talent Trends.


Shaping the Future Workforce

No less than a quarter of DACH companies surveyed (25 percent) say their transformation plans include significant workforce change. Moreover, the intense multidimensional change is also reflected in the companies' assessment of the biggest challenges of transformation. According to HR professionals, these include: too many priorities distracting employees (51 percent), insufficient use of new technologies (37 percent), budget constraints (35 percent), and lack of staff and future-relevant skills (31 percent).


While reskilling for critical audiences is a priority in DACH companies' transformation plans (43 percent), only 33 percent of companies capture information about employees' current skills and competencies, and only 10 percent of HR professionals surveyed said they have implemented competency-based talent strategies such as skills management or pay-for-skills.


More focus on diversity and flexibility

"Given the sudden focus on out-of-office work that became necessary in 2020, in some cases without experience, it is no surprise that DACH companies' transformation plans for 2021 focus on further optimizing workplace flexibility in all its facets (49 percent), followed by expanding talent strategies and learning concepts (45 percent) against the backdrop of further increasing reskilling needs (43 percent)," Eger points out.


When it comes to priorities for the HR function, empowering employees for remote work in the short term is top of the agenda. "Unfortunately, what often gets lost in the discussion is how to create more flexibility, even after Covid-19, and what the long-term concepts are for that," adds Eger. He sees the issues that follow from #2 to #4 in the priority list as the true future issues for HR transformation. "Accelerating the digital transformation of HR, redesigning the HR operating model for more flexibility, and redesigning HR processes for a decentralized and hybrid work experience are the more sustainable drivers of the new world of work."


"The Covid pandemic was eye-opening for companies and their employees alike: home office works! Quite quickly, however, it became clear that it's not that simple. Many issues need to be re-thought and re-defined - from corporate culture to wellbeing and benefits to diversity. Too quickly, important issues fall by the wayside in a time of work-at-home. The Employee Value Proposition (EVP) must be adapted to the new normal. The Employee Experience must now extend into the employee's home, for example through the right benefits and digital tools," says Stephan Pieronczyk, Partner and Rewards Leader Central Europe at Mercer.


Pandemic increases focus on sustainability and shared social responsibility /ESG

Long-term sustainable companies have sustainable goals that take into account a multi-stakeholder approach. Linking ESG (environmental, social and governance) goals to the company's core value proposition and embedding ESG metrics into executive scorecards are just two of the approaches that are evident among DACH companies in 2021.


"If companies see ESG as more than just a resurgent trendy topic and really manage to link it to business strategy and HR transformation, it can create an approach that ensures long-term success and is also crisis-proof - true people sustainability," Eger said.

  • One-third (30 percent) of the companies surveyed in the DACH region say that inclusive management with empathy has become more important for future competitiveness.
  • Global developments around D&I (diversity & inclusion) have increased the urgency for improved analytics on pay equity (31 percent) and health trends (16 percent) in DACH.
  • One of the biggest opportunities in sustainability strategies is to focus investments such as retirement portfolios more on sustainability - something only 5 percent of DACH companies are doing today.
  • Only one-fifth of companies (20 percent) are focusing on AI-driven stimuli that encourage employees to increase their health, wealth and career opportunities, positively impacting the employee experience.

Looking ahead

To accelerate progress on these trends, organizations must consider several key priorities. These include developing a sustainability strategy; establishing clear organizational responsibilities for skills and competencies; binding targets for diversity, equality and inclusion; the promise and practical implementation of flexible working; and prioritizing health and well-being.

"In the future, HR and HR IT initiatives will be more targeted to support business growth. HR leaders must act as strategic partners to the top management on the workforce implications of difficult business decisions, while addressing employee concerns in an empathetic and transparent manner. The successful crisis management of many HR organizations has made people more aware of the role HR can play. The ability to lead with empathy and enable the organization to benefit from diverse perspectives and ideas can make 2021 a year of productive recovery and reinvention," concludes Eger. 



About the Mercer Global Talent Trends Study

The sixth edition of Mercer's Global Talent Trends (2021) study includes insights from more than 7,300 executives, HR professionals and employees and, for the first time, offers in-depth companion editions for 23 regions in 44 countries. To download the global report, please click here.  For the DACH edition of Global Talent Trends 2020-2021, 55 HR leaders from Germany, Austria and Switzerland provided insights into their priorities for the coming year. It also highlights best practices from two leading German companies. You can find the DACH report here.


About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of over $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit Follow Mercer on Twitter @MercerSwiss.