Transform, retain, align

In this report, we explore our initial findings from the PwC Channel Islands’ Workforce Hopes and Fears Survey 2023: how AI is impacting workers, talent retention, and employee sentiments towards their employers action on climate change. If the ‘Great Resignation’ has taught employers anything, it’s to not take their workers for granted: yet many companies risk doing exactly that - whether it’s by not paying close enough attention to these areas or other pressing issues.

The Great Resignation appears to be over in the Channel Islands.

Workers across the islands say they intend to remain with their current employer for at least the next 12 months. Only 1 in 7 employees intend to jump ship anytime soon.

This contrasts starkly with the global trend where 1 in 4 say they plan to quit their job in the next 12 months (up from 1 in 5 in 2022). So is the worst of the talent crisis behind us in the Channel Islands? Far from it. Organisations must not become complacent and the shortage of key skills continues to dominate the leadership agenda in boardrooms across the islands.

If local firms want to deliver growth and transformation in a world of exponential innovation and technological disruption, business leaders must continuously evaluate the skills they need, their approach to retaining talent and the development of their existing workforce.

It has never been more important to engage and listen to the workforce, cultivate a people-centric environment, foster innovation and support what matters most to employees.

PwC Channel Islands is launching its data cut of the PwC Global Workforce Hopes and Fears Survey, drawing responses from 563 employees across Jersey, Guernsey and Alderney representing all industries and sectors. This includes comparing Channel Islands worker perspectives with nearly 54,000 employees around the world.

AI and the need for a transformation mindset

AI is driving exponential change across our society and businesses. PwC’s 26th Annual UK CEO survey found 77% of UK leaders are investing in deploying advanced technologies such as AI and cloud. Yet many employees are apparently oblivious to whether it will impact them.

PwC’s Upskilling the Channel Islands’ workforce for a digital world report (July 2020) reveals that around 30% of jobs across the Channel Islands are at risk between 2022 and 2035. Since publishing this prediction, the rate of change has accelerated rapidly due to recent developments in AI.

However, our Hopes and Fears survey results indicate a significant indication of a split workforce, and demonstrates that a large portion are unaware of the impact that technology deployments will have on the economy. This is pointing towards a lack of local knowledge and maturity towards the opportunities and risks of artificial intelligence, and may soon mean that Channel Islands’ organisations fall behind other jurisdictions.

The impacts of AI differs across sectors, therefore it is important to understand the unique makeup of the Channel Islands’ economy and how this contributes to the gap in workforce sentiment towards AI impacts. An example would be the manufacturing sector in Jersey; with PwC’s Upskilling the Channel Islands’ workforce for a digital world report predicting that 45% of manufacturing jobs are to be automated by 2035, however, this industry only accounts for 1% of our total employment locally.

Despite the mixed response to AI, the most common positive sentiment is that AI is believed to increase productivity and efficiency at work in the next five years, accounting for 29% of responses.

Employees entering the Channel Islands’ workforce are adapting to new ways of working. A larger share of younger generations selected statements indicating that there are benefits and positive impacts with regards to AI than the older generations. Specifically, 45% of Gen Z and Millennials indicated that they believe that AI will help to increase productivity and efficiency at work in the next five years, versus 22% of respondents from Gen X and older generations.

Workers are eager to learn and stay relevant, with 61% of Channel Islands respondents saying they actively seek opportunities to learn and develop new skills. Business leaders looking to retain and reskill their workforce in the face of a skills shortage and high recruitment costs are therefore pushing against an open door, with Financial Services Skills Commission and PwC research demonstrating that reskilling can save businesses up to £49,100 per employee, compared with recruiting someone new.

Empowering experienced employees, who understand the business they work in and boast critical human skills, by giving them technological know-how and permission to increase their productivity through innovation, may present a lifeline for organisations who worry they lack the talent to keep pace in a digital world.

It is imperative for businesses and Government to work together to define the future skills needed for our Islands, and to invest strategically to build economic stability. The skills needed will vary by industry, which require a flexible and adaptable approach, but will ultimately need a mix of digital and human skills, with a particular focus on the opportunities for increased automation and AI.

Retaining talent: now and for the future

There is a global constraint on skill and labour shortages, as highlighted by the PwC and the World Economic Forum action framework, published in May 2023. Talent retention is crucial, and the increasing need to focus on how future skills and generational expectations will evolve, and ensure jobs are resourced appropriately to manage workloads, is necessary in avoiding unwanted and expensive employee turnover.

Across the Channel Islands, 14% of employees say they are likely to change jobs in the next 12 months. Despite this being a positive news story, businesses must not become complacent. In a cost of living crisis and environment where “job-hopping” regularly produces higher salaries than loyalty, businesses must seriously consider their employee value proposition and a mapped out career pathway in order to retain their workforce.

Without this, the Channel Islands further risks losing emerging talent and future leaders to what they consider as more appealing organisations in other jurisdictions. This is further validated by findings from the recent Local Needs Assessment published by the Jersey Community Foundation in December 2022, which indicated that following a Jersey island-wide survey, 44% of responses were likely to leave the island within the next 5 years.

Business leaders and Government alike should be concerned by the risks of losing emerging talent and skilled workers. Globally, we already know that the need for specialist skills are rising, with the Channel Islands’ economy relying heavily on highly skilled workers, with 79% of respondents citing that their job requires specialist training and qualifications.

In the last 12 months, more than a third of Channel Islands’ respondents reported that they often or usually find their workloads unmanageable - 14% higher than the global figure. Moreover, 85% of them cited a lack of resources (e.g. staff shortages or unreasonable timelines) as a driver, with specialist employees 1.5 times more likely than non-specialists to experience unmanageable workloads. It is the highly skilled workers, who we rely on so heavily, that are finding themselves under pressure with unmanageable workloads.

Even though 75% of Channel Islands leaders believe they attract talented people by providing a good work-life balance and flexibility over working hours (Channel Islands Future of Work and Skills Survey 2022), specialist employees who possess skills that are difficult to attract and recruit for, clearly do not feel that employers are delivering on this promise.

Given the talent shortages within the Channel Islands, organisations should focus on upskilling others already within the business; through on-the-job learning, training and formal qualifications. By easing the burden on specialist employees, whilst providing development opportunities to others, overall engagement levels and the chances of retaining vital talent will soar.

Climate change action: are employers taking responsibility?

PwC’s Global Workforce Hopes and Fears Survey 2022 found that discussions about political and social issues are an everyday feature of the workplace, with the positive impacts of these conversations outweighing the negative. These discussions are helping employees understand each other and their values whilst creating a more open and inclusive work environment.

Channel Islands’ findings show that 81% of respondents felt their actions and behaviours at work are aligned with their company’s values and direction (21% higher than global results), which indicates that generally, personal values are matching up with organisational values locally.

Both Jersey and Guernsey have made net zero by 2050 commitments in line with the Paris Agreement, and the islands also need to be ready for the impacts of a changing climate. Employers should ensure that their pace of action on climate change aligns with workforce expectations. Indeed, as outlined in our previous Green Jobs Barometer for the Channel Islands 2022, 30% of staff already believe their work objectives include improving the environment.

Our latest findings confirm that, here in the Channel Islands, employees expect their employers to take action to address climate change, with 53% feeling that their employer has a responsibility to take action. This is 16% higher than the global figure, perhaps reflective of the continued high profile of environmental issues in local business debate, and the intention both Jersey and Guernsey have to become leading centres for sustainable finance.

This call to action by employees is supported by a significant proportion of Channel Islands’ business leaders (CEOs, Senior Executives and Management respondents), with 56% of them agreeing that taking action against climate change is the responsibility of employers.

However, employee satisfaction with organisations taking the right amount of action against climate change is overall only 28%, 10% lower than global, suggesting that Channel Islands’ organisations still have a way to go to make an impact with their workforce. Most significantly, 32% do not feel their employer is taking enough action.

Generationally, over a third of Gen Z and Millennial respondents felt that their company is not doing enough to address climate change. This could indicate a lack of alignment between company values and their future talent, and impatience at the pace of progress, with many companies still struggling with ambition to action gaps. Harnessed well, these respondents could be the changemakers and champions their employers need.

More broadly on ESG integration, and as explored by PwC UK in Exploring the S in the ESG, businesses will only be successful in delivering on ESG strategy, governance and purpose if they are able to understand their employees’ personal values first.

With future talent striving to work for organisations that have societal issues at their heart, organisations have an opportunity to refresh their ESG commitments and build this into a compelling employee value proposition that will obtain the buy-in from a multi-generational workforce and empower their people to enact change.

Concluding thoughts

Unlocking the full value of disruptive technologies requires a transformation-ready workforce, equipped with the right skills and mindset to identify, design and deliver change where it is most needed.

Business leaders must recognise the value of their existing workforce’s human skills, their values and needs, and the potential that can be realised by arming employees with the knowledge and permission to innovate with increasingly powerful yet intuitive technologies, and then work hard to retain those people by creating a rewarding, enriching career path.

Finally, employers can take heart from the loyalty that Channel Islands workers are indicating in terms of remaining in their current jobs. But businesses must be careful not to transfer the burden of resource constraints onto already stretched workers. This could lead to a resurgence in attrition rates if employees continue to feel their workloads are unmanageable, and/or severely impact the health and wellbeing of the workforce.

We will be releasing further findings from the Channel Islands Hopes and Fears Survey in Autumn 2023, which will include comparing some results with other jurisdictions.

¹ _{Chart 1 - Positive statements include AI creating opportunities to upskill, increase productivity and new jobs; Negative statements include the impact of AI on the nature of work, inconfidence in skills adoption and/or replacing of jobs; Neutral statements refer to AI having no and / or other impacts as well as people who really just don’t know what to expect. Respondents were able to select all options that apply and mix sentiments were evident. This calculation is the total % of all statements selected.}