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Why a growth mindset can drive HR innovation, despite cost-center concerns

Jason Averbook, Mercer
Jason Averbook
With a career that spans over two decades in HR and technology, Jason Averbook is senior partner and the Global Leader of HR Transformation at Mercer, where he also is a leading figure in the firm's global generative AI strategy and services. He is the author of two books on the future of HR and HR technology. From 2018 to 2023, Averbook was co-founder/CEO of Leapgen, a company committed to shaping the future workplace. He also serves as an adjunct professor at universities worldwide, has held senior roles at industry giants such as PeopleSoft and Ceridian and is frequently quoted by top media outlets.

The digital revolution has transformed the business landscape, and the HR domain is no exception. As we all navigate the complexities of this new era, HR leaders need to embrace and reinforce a growth mindset to drive innovation and adapt to the evolving needs of the “now of work.” However, this is particularly challenging for HR departments, which are often viewed as cost centers and face constant scrutiny around spend.

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HR departments can no longer afford to remain stagnant. The traditional, transactional approach to HR is giving way to a more dynamic, interactive model that prioritizes human-centered design, engagement and overall employee experience. As futurist Alvin Toffler famously said, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” This statement underscores the critical importance of a growth mindset in driving HR innovation.

The ongoing challenge of being a cost center

HR departments often face a unique challenge in driving innovation due to their perception as cost centers. This means that HR initiatives are frequently scrutinized for their impact on the bottom line, and any investments in new technologies or programs must be justified in terms of ROI. This constant pressure to minimize costs can make it difficult for HR leaders to secure the resources necessary to drive innovation.

However, it is essential to recognize that investing in HR innovation is not a luxury but a necessity. This requires HR to measure itself not by looking inward but by carefully examining the impact it is making on work. By embracing a growth mindset and focusing on initiatives that drive employee engagement, productivity and retention, HR leaders can demonstrate the strategic value of their function and secure the support needed to drive meaningful change.

5 ‘pulse’ checks to evaluate your innovation

To gauge if an HR department is innovating quickly enough to keep pace with the digital transformation, here are five pulse checks:

  • Strategic alignment: Regularly assess how HR initiatives contribute to the organization’s broader objectives. Innovative HR functions align their strategies with the company’s vision, driving toward common goals with a unified purpose.
  • Employee engagement and experience: An innovative HR department seeks to understand and improve its employees’ day-to-day experiences, recognizing that a satisfied, engaged workforce is key to demonstrating “value.”
  • Learning and development adaptability: Evaluate the organization’s learning culture. Are employees encouraged to develop new skills and adapt? Is there a framework in place to support continuous professional growth? HR innovation thrives in an environment where learning is both valued and facilitated.
  • Technology adoption and integration: Monitor the adoption rates of new HR technologies and their integration into existing processes and journeys. Innovative HR departments leverage technology to amplify, rather than replace, the human elements of their operations.
  • Feedback loops and agile responses: Establish mechanisms for continuous feedback and ensure there is a process in place to act on comments quickly. Innovative HR is responsive and makes iterative changes based on real-time data and feedback.

Enabling a growth mindset for innovation

A growth mindset, as defined by psychologist Carol Dweck, is the belief that one’s abilities and intelligence can be developed through dedication and hard work. In the context of HR, a growth mindset empowers professionals to embrace challenges, learn from failures and continuously seek opportunities for improvement. By “inviting” a culture of learning and adaptability, HR leaders can position their organizations to thrive in the face of digital disruption, even in the face of cost pressures.

Learn how HR professionals worldwide are embracing a growth mindset at HRE’s upcoming HR Technology Europe, May 2-3, in Amsterdam. Click here to register.

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To cultivate a growth mindset within their teams and across the organization, there are three key things I always talk to leaders about:

  • Empower employees to take risks.
  • Encourage diverse perspectives.
  • Provide opportunities for continuous learning and development.

By creating a culture that values growth and innovation, HR leaders will allow for the full potential of their function and therefore drive meaningful change by design.

The future of HR innovation

As we look to the future of HR innovation, a growth mindset will be the key differentiator between organizations that thrive and those that struggle. By embracing change, fostering a culture of learning and harnessing the power of technology, HR leaders can position their organizations to navigate the complexities of the digital age with agility and resilience, even while they battle ongoing efficiency and cost questions.

In the words of Bill Gates, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.” The future of HR can be bright—or not—and with a growth mindset at the core, we will show the value of the function inherently.