Strengthening the human-centric core of Industry 5.0

Conclusion

Emerging from the pandemic, organisations are confronting new risks and challenges. Yet most executives are confident in their organisation’s growth potential. And they see growth coming largely from within, driven by innovation, human capital and digital transformation. Looking inward for solutions, to what human ingenuity can contribute, is the guiding principle of Industry 5.0.

In order to realise growth potential or maintain organisational value, organisations will need to address internal challenges. Again, the human element is crucial. Most executives remain in doubt over having the right talent to align with strategy. Further, the pandemic either exposed or created other serious internal risks, including employee burnout and the need for different executive skill sets.

Talent-related investments favour leadership development, as well as hiring new leadership talent. The drive to grow through innovation and digital transformation is contributing to a spike in demand for technology leaders. This is followed by marketing & sales, while HR has leapt from seventh in 2021 to fourth. There is also a need for stronger ESG-DEI capabilities, particularly at board level, which would expand access to human ingenuity.

Greater importance is now being placed on uniquely human ‘soft skills’ as well, which resonates with the human-centric approach of Industry 5.0. Our respondents emphasise skill in inspiring teams, driving change, empathy, and attracting/retaining talent.

The need to strengthen executive and board talent is broadly acknowledged. And with people now at the heart and the forefront of business, we have entered a very hot talent market. Recruitment and retention challenges have never been higher, and organisations plan to recruit more executives and interim managers than last year.

The resilience shown through the pandemic was exceptional. Organisations have learned much about people and their essential value. The challenge now is to continue to ensure organisations have the right skills across the workforce, at leadership level, and on the board. Driven by technology, we are moving in faster business cycles. This means staying ahead by constantly evaluating what organisations and people need.

There is, however, a lack of consensus between different leadership functions regarding which types of executive talent need to be strengthened. Against daunting risks and challenges, executive teams and boards will need to collaborate and coordinate. A clear-eyed assessment could be in order.

Methodology & demographics

The  survey was distributed to senior executives worldwide from April 11, 2022 to May 27, 2022. A total of 640 complete responses comprised of 32% from Europe, 32% from North America, 18% from Asia-Pacific, and 16% from South America. Respondents include 27% board/president/CEOs, 21% SVP, division or country head executives, 11% heads of operations, 10% heads of human resources, with a remainder of executives across multiple functions including finance, marketing and technology. By organisation, 36% from private/independent, 24% are from publicly quoted, 17% from private/family-owned, 12% from social enterprise, with the remainder from  start-up or private equity backed. Industrial sector accounts for 28% of responses, followed by 14% within both consumer & retail and professional services, and 11% from both technology/media/telecoms and healthcare & life sciences, with the remainder of responses from financial services, academic, social impact, and private equity. These data are therefore indicative only throughout the report, due to lower responses in these sectors.