Over the past couple of years, a set of critical global forces have been reshaping how, where and why people work; at PwC we call them ADAPT. Now the COVID-19 pandemic has turbo-charged those trends. Technology, diversity and social awareness have all increased in importance. The result is a new world of work to which organisations – not least private and family businesses – must adapt to remain relevant and competitive.
We believe the implications for private and family businesses are especially profound. Why? Because these organisations’ biggest strength is often their loyal workforce, reflecting the care and personal commitment shown to their employees. A two-way trust that has been built up, often over generations. This makes it absolutely critical to ensure any changes impacting the workforce are planned and executed in the right way.
However the sheer scale of the transition to the new world of work can make it daunting, especially for a private business with limited resources. However, the pandemic has accelerated the drive and execution of people-related change.
So, as you take your people with you on the journey to your future workforce, how will you navigate the route?
We’ve identified five areas to focus on:
1. Map out your workforce of the future
The first pillar starts with asking some tough questions. Is your current workforce right for the work that you need to do to be successful in the future? This Harvard Business Review article1 highlights the important difference for a business between digitising and digital transformation; the latter being about creating real long term advantage not just staying afloat. Our recent Family Business Survey 2021 reported that only 39% of family businesses say their digital capabilities are strong, and only 19% say that their digital journey is complete.
To really succeed with digital transformation, businesses have to reimagine their organisation and their workforce. Will the mix of skills and capabilities you have today meet your needs going forward? If not, how will you build, borrow or buy those skill sets?
The good news is that PwC’s New World. New Skills report highlights, employees are keen to undertake lifelong learning for a more digital world of work. And our Hopes and Fears 2021 research finds that 29% of family business employees think technological developments will significantly improve their job prospects, against just 17% of non-family business workers.
1 Leinwand, P., Mani, M.M., (2021), ‘Digitizing isn’t the same as digital transformation, Accessed at: https://hbr.org/2021/03/digitizing-isnt-the-same-as-digital-transformation
2. Update your value proposition for employees’ changing needs
What is the “deal” you’re offering your people? Has it changed as a result of the pandemic and what does it need to look like in order to deliver successfully in the future? As employees’ needs and expectations change, the value proposition to attract and retain them changes too. Your future vision for the business should include the removal of costly, outdated practices, reflect the flexibility desired and the creation of a working environment and experience that helps people feel engaged, driven and included. How will you achieve these different priorities?
3. Work out what virtual working will look like for you
The initial switch to home-working happened at speed. But it’s now time to advance from immediate responses to a sustainable model of virtual or hybrid working for the long term. This means understanding and planning for new – often hybrid – working patterns and office use, including understanding where roles can be most effective. Significantly, our Hopes and Fears survey finds that 66% of family business employees think there are elements of their work they could do from home, compared to 55% of other workers. But whatever changes are made, top-down edicts won’t work: it’s vital to engage with employees and take their views into account. This is even more the case when needing to engage those workers who must be site-based against those that can operate more flexibly.
4. Realign employee reward with your real sources of value
As restrictions ease there are many immediate priorities to address, ranging from bringing people back from furlough, to reopening offices, to reviewing funding arrangements. While these are important, it’s vital they don’t divert your attention from the longer-term imperatives of adapting your operating model to the post-pandemic world. And equally important is rethinking your future workforce, and doing this with your values and purpose at the very centre of your thinking.
5. Reset performance management and incentives
For many private businesses, the events of the past year have provided a great opportunity to press the reset button on the whole reward package but specifically on incentives - focussing on how to set targets and determining what performance should be rewarded. The changes usually include a greater focus on recognition, both financial and non-financial but also raises questions around the role of performance management in a virtual working environment. For example, our experience both with clients and across our PwC network shows that immediate peer-to-peer recognition for colleagues who go the extra mile are really effective in driving engagement and productivity. It demonstrates that the business places a high value on behaviours that support its direction of travel, including those with non-financial outcomes.
No time to lose
As restrictions ease there are many immediate priorities to address, ranging from bringing people back from furlough, to reopening offices, to reviewing funding arrangements. While these are important, it’s vital they don’t divert your attention from the longer-term imperatives of adapting your operating model to the post-pandemic world. And equally important is rethinking your future workforce, and doing this with your values and purpose at the very centre of your thinking.
There’s no one-size-fits all solution to these issues, meaning there’s a risk they might be put in the “too difficult” box and left for later. They shouldn’t. Start laying plans today, and engage with your people to see how they envision the future of work for themselves and your business.
Contact us
Dr. Peter Bartels
Partner, Global Entrepreneurial & Private Business Leader, PwC Germany
Tel: +49 40 6378-2170