How The World of Work Is Changing
The world of work is changing at a faster pace than ever. Nobody knows exactly what the future of work will look like. Yet there are stable trends that help to predict how we will work in the coming decades. An easily accessible model describing tomorrow’s today is hinting at six trends:
The model was originally published by CEB. It is clearer than other predictions of what HR will look like in the future. And is much in line with or innovation & digitalization research findings. Let’s look at the six trends one by one.
Data (over-) abundance and inaccessibility
There is more data available than ever. The sheer amount of data publicly accessible has grown at quite incomprehensible speed. Some widely discussed data illustrates the growing volume of data:
- More data has been created in the past two years than in the entire previous human history.
- The data produced every two days matches the amount in all of history prior to 2003.
- 31 million messages shared and 3 million videos watched on Facebook every minute.
- Every minute up to 300 hours of video are uploaded to YouTube alone.
Volume matters. But how will this relate to the workplace? Two other interesting statistics on how data is used, without us even knowing: Digital marketing companies measuring consumer ‘sentiment’ analyze 12 terabytes of Twitter tweets every day (an equivalent of 10,000 running meters of books on a shelf). Yet, there is much, much more to come. Currently only 0.5% of all data is analyzed at all. So in the future of work, we will see data becoming the underleveraged asset class No. 1, with lots of innovation and invention being generated by insights from data.
Automation of knowledge work via machine intelligence
Machine intelligence has evolved to a point where machines can not only automate manual labor – as was the case when robots took over our production plants. The big trend dominating the future workplace will be the automation of knowledge work. In return that means machines will at least influence, if not take decisions and thus take over an additional part of human labor. A good example to illustrate this trend is the Google car. Driving a car basically means constantly taking decisions: When do I stop? When do I accelerate, do I grant the right of way to a bike standing at a crossroad on the wrong side of the lane? The Google car has done its first 1 million miles with 11 accidents only, none of which was serious. Apply such an intelligent system to many of the decision processes in companies, and you can extrapolate the impact automation will have. Just imagine third level technical support for the IT system of a Fortune 500 company completely run by a machine. Or – much closer to today’s reality – customer service centers with a completely automated first and second level support.
Empowerment of Individuals via Mobile and Social Technology
We all experience mobile and social technology as users. The important notion in the context of the future of work is that this technology will empower individuals. After an era of standardization and harmonization it promises the possibility to treat each employee individually. Digital marketing is probably the fitting analogy. For ten years, companies have been analyzing the digitals trails their customers leave in social networks. They build models to bring to light their current wants and needs and they can even predict their future wants and needs. Consequently, of course, they offer their products and services accordingly. Or, in other words: A consumer goods company might claim to know from digital marketing which of their customers is pregnant long before their respective parents would.
Let’s replace some terms: Consumers by employees and products by HR services. Then the diagnosis would read: Companies will analyze the digital trails of their employees to understand their wants and needs and predict their future work behavior. They will align their HR services accordingly. They will be able to predict skills from what people are writing about. Employers will give jobs to those with the highest probability to succeed. Heads of companies will listen to sentiments and opinions of employees when designing corporate policies, and also when building individual development plans for managers. They will use in-process feedback (similar to a ‘like’ on Facebook) to improve performance evaluation.
For many, ‘consumerization of HR’ sounds fascinating and threatening at the same time. The big question: Where does the data come from? Data protection laws restrict the access of companies to private data of their employees. Some of the sources companies are using today to track digital trails of employees are their own collaboration platforms, internal expert blogs and knowledge databases, like Sharepoints, etc. One way to access Twitter and Facebook accounts is an opt-in approach: Employees willingly give access, so companies can best ‘serve them’. This of course requires a high level of trust. Companies are setting up Codes of Conduct to build trust and be transparent in respect to what they will – and will not – do with employee data and why. We will see how the data privacy and ethics discussion will play out, how quickly laws will be adapted to a changing perception of data privacy needs. If a global standard is to be implemented over time it most certainly will allow companies to treat their global workforce equally.
Larger, More Complex Organizations
Unbelievable but true: Companies will continue to grow in size and complexity. Over the past 50 years (with very few exceptions) the smallest Fortune 500 company of a given year was bigger than the one in the previous year. And this trend will not break in the near future. Hence we will see more complex organization structures evolve. Multi-dimensional matrix organizations will be the norm. Complexity changes the work environment dramatically. An important one is a behavioral aspect: Decision making will be all about influencing others. Before taking a decision, a manager will need to influence a growing number of stakeholders of that decision, in a matrix organization very often without having the ‘power of the direct line’. Hence, people with influencing skills will be successful in the future.
Generational Shifts In Employee Motivations
With currently three very different generations at work (Baby Boomers, Generation X and Generation Y – aka. ‘Millennials’) and a fourth (Generation Z) entering the job market in the early 2020’s, the management of these workforce segments should be differentiated as well. The generation with which companies are struggling the most is Generation Y. Many ‘Millennials’ myths have been created. A recent McKinsey blog quotes an anthropologist: ‘Because all the peoples of the world are part of one electronically based, intercommunicating network, young people everywhere share a kind of experience that none of the elders ever had.’ Here comes the surprise: It’s a quote from 1970 (!). Hence, the sensation that it’s always the succeeding generation which is the most threatening has been consistent for decades. Yet, it helps to consider some facts when painting a picture of the future workplace:
- Millenials have higher expectations regarding pay, promotion and development.
- Millenials use mobile technology much more than the older portion of workforce.
- Millenials show a lower intent to stay with the company.
- Millenials like to hop experience (but not necessarily employers).
- Mllenials want to compete with others, relative performance is important to them.
- Millenials are better connected inside and outside the company.
- Millenials do not rely on their co-workers as they do not trust their input.
There are two typical responses to the challenges deriving from these facts: (1) Large organizations are re-creating their employment value propositions to suit the new generation. (2) Companies are investing in the ‘workplace of the future’, creating a fitting work environment for Generation Y.
Networked, searchable, on-demand expertise
The example of Joe, a fictional networked, searchable, on-demand expert, is a great illustration of this trend (taken from a recent research by Andrew Karpie):
In a future work environment, an large portion of a big company’s workforce is organized like Joe – not by position filled by the most suitable candidate, but by a virtual pool of internal and external experts deployed in projects. McKinsey Global Institute produced a great piece of research in June 2015 when it looked at the opportunities of this modern way of organizing work. From a macro-economic perspective, this new way of work will be beneficial for 540 million workers around the globe by 2025, adding 2.7 trillion USD or 2.0% to the global GDP, increasing employment by 72 million full-time equivalent positions. On a micro-economic level, work productivity of companies will increase by 9% – at a 7% lower cost base. In our post about the digital agenda of HR, we consider packetized Joe the third pillar of any digital agenda of an HR function.
Although these six trends are universal and stable for the next 5 to 10 years, getting prepared for them will be a very individual challenge for each company: They will hit industries and regions differently. And the hit will differ in sequence and impact.