Key trends that will shape the future of the world of work
We are currently experiencing the greatest workplace disruption in generations, and the pace will not slow down in 2023. The nature of work is undergoing major transformations driven by technological change, societal shifts, ecological transitions, and the impact of the Covid-19 pandemic. As organizations bounce back from this pandemic and seek to redesign their human processes and work practices, they have the opportunity to create a happier and more productive work environment.
Companies are restructuring for efficiency
The changing industry landscape and shifting business models have prompted corporations to restructure for greater relevance and competitiveness. Companies such as General Electric have split up, while others have responded with mergers, such as the Tata Group. Holding companies that have managed to avoid job cuts, such as Alphabet, are calling for increased employee productivity.
Across all sectors, irrespective of the approach taken, the focus on profitability requires companies to hire and retain employees who have the skills and competencies to contribute rapidly and directly to the company's bottom line.
Skills rather than potential: the new currency in the job market
Driven by short- and medium-term performance, employers are increasingly shifting their focus from candidates with 'potential' to candidates with 'experience-backed' skills. Among the selection criteria, know-how is taking precedence over academic qualifications. Work-integrated learning approaches, such as internships and apprenticeships, are gaining widespread support as they best prepare graduates for success.
Increased automation and digitalization of work, as well as diversification of the workforce and evolving business practices, will require many employees to learn new skills. The World Economic Forum's 2020 Future of Jobs report predicts that the skills required to fill existing jobs are set to change by an average of 40% between 2020 and 2025. Companies estimate that more than half of their employees will need to upgrade their current skills and/or acquire new ones.
To this end, we must adopt a ‘mindset of lifelong learning’ with the goal of developing skills that are readily transferable to a wide range of industries to ensure access to a variety of opportunities over time. Faced with this daunting challenge, perhaps the wisest approach is to focus our learning efforts on ‘just enough, just-in-time, and just-for-me’ and abandon perfectionism. As an example of how to acquire digital skills, Tsedal Neeley argues in her book "The Digital Mindset" that most people will be able to acquire decent digital skills by following the "30% rule", the minimum threshold of competence to independently understand and benefit from the digital tools that make up the world we live in.
Increased flexibility of the workforce – bringing work to people
Workspace is a combination of physical location and work norms and practices that an organization has adopted. There are basically two approaches: bringing people to work or bringing work to people. Since the early days of industrialization, bringing people to work has been the rule, with the creation of massive factories and industrial centers where people gather to work.
Over the past few decades, driven by technological innovations, we have seen a steady, albeit modest shift toward the implementation of remote and flexible work policies. For example, prior to the pandemic, approximately 5% of U.S. employees worked remotely and 27% of employers offered flexible work schedules; today, these numbers are 40% and 88%, respectively.
In the wake of the pandemic, which severely limited the ability of companies to bring their employees to work, accelerated digitalization of work processes made it possible to introduce more flexible, remote or hybrid work arrangements. Both remote and hybrid work are likely to persist for a sizeable minority of the workforce. The Gartner CFO survey suggests that remote work may become a permanent feature for 74% of companies. Almost half plan to cut back on workspace use over the long term. Additionally, the 4-day work week is gaining popularity, with 79% of business leaders open to the idea, something a number of organizations piloted during the pandemic.
The upside of a geographically dispersed workforce is that companies have the ability to recruit from a broader talent pool across borders, allowing for greater diversity and ultimately, increased competitive advantage.
The downside of a dispersed workforce is that employees may feel more removed from the organization and that their interaction with management may be limited by distance. It is therefore essential that leaders redouble their efforts to clarify goals and roles, explaining why they matter, so that employees can find meaning in the collective purpose. That's because employees may lack visibility on how they impact the collective goal because they only see their small piece of the puzzle. Thus, it’s critical to ensure that they clearly see the connection between what they can accomplish on a daily basis and the collective goal.
A work culture that encourages collaboration of empowered teams
The former top-down hierarchical governance model is giving way to ‘flatter’ structural models or networks, designed to promote collaborative result-based work by empowered teams.
This is known as the 'holacratic model', in which authority, decision-making and accountability for results are shared by a team of self-organizing individuals. Performance management no longer focuses on the output of individual employees, but rather on that of autonomous, cross-functional teams. These team-centric empowerment and performance management strategies are intended to enable organizations to respond and adapt with greater agility to an ever-changing global business environment.
Fairness and equity will be defining issues for organizations
Questions of fairness and equity are emerging in new ways. Although remote and hybrid work may be beneficial for work-life balance, they may create new dimensions of inequality since they are not accessible to all workers.
Only 37 % of jobs in the United States and the European Union can be done entirely from home, and the percentage is even lower in developing economies, according to The World Economic Forum's 2020 Future of Jobs report. For example, jobs that require on-site work or specialized machines, such as conducting CT scans, need to be done in person.
Remote work has the potential to widen the gender pay gap and decrease the level of diversity in leadership teams, according to Gartner research. In fact, to a large extent, women, people of color and other disadvantaged groups prefer to work from home compared to white men.
Therefore, without intervention, underrepresented talent could be excluded from critical conversations, career opportunities, and other networks that promote career growth.
Discussions, about diversity, equity, and inclusion (DEI), have become hot buttons in society. In fact, HBR’s analysis of S&P500 earnings calls shows that the frequency with which CEOs bring up issues of equity, fairness and inclusion has increased by 658% since 2018.
The combination of longer life expectancy and the profound disruption of skill sets and career paths by technology means that each one of us will need to develop the ability to adapt quickly to a changing environment.
I think we have only scratched the surface of the question of the future of work, particularly in the United States, that is, whether work should take up as much time as it does? In a previous post [The Culture of Overwork], we discussed the idea advocated in the 1930s by economist John Maynard Keynes that the work week could be reduced to 15 hours in the 21st century as a result of increased economic productivity driving up living standards by 4 to 8 times. Although this idea did not materialize, the debate over a shorter workweek has been rekindled.
In the words of Adam Grant of the Wharton Business School; “Every experiment I have seen on reducing work hours suggests that people are equally or even more productive. I'd much rather have people do 6 focused hours a day or 4 focused days a week than 8 distracted hours or 5 unmotivated days."