Leaders preparing for tomorrow’s workforce know they face the twin challenges of producing growth and preparing for the new, often unknown opportunities the future will bring. The most astute leaders also know they must answer a deeper question: How can I deliver great performance by helping our people to thrive? This requires a clear vision for an uncertain world – one that sets out transparently the plans that allow people to take on new and augmented roles, and vitally, to create a compelling people experience. Most businesses still have work to do.
How we work, the importance of work in our lives and even what we mean by work are all being transformed
Technology is seen as the most radical driver of change, from artificial intelligence (AI) and automation to digital mobility and virtual collaboration – yet other trends could be just as decisive. The lines between our work and personal lives are shifting. Diversity and demands for equality are also reshaping the workplace. We are living longer, which means we will be asked to master more and different skills over time as the nature of work changes. And social and environmental pressures are creating demands for more flexible working conditions, as is the gig economy.
These changes are a source of anxiety and insecurity: we do not know how many or which jobs will be automated out of existence. What we do know is that there are opportunities to make working lives more productive, meaningful and fulfilling. Organisations will need to rebalance their workforces to focus more on a collaboration between technology and humans, and to harness human skills, such as creativity, empathy and ethics alongside digital skills. Companies that understand and act on these workforce changes now will not only have the skills but also the organisational motivation, innovation and adaptability to thrive.
So, how do organisations prepare for tomorrow, today? In our recent study Workforce of the future: The competing forces shaping 2030, we considered the implications of the possible ‘worlds’ that could develop and the ‘no regrets moves’ that organisations should take with a range of potential futures in mind.1 Our aim with this new study is to identify, in practical terms, what companies need to invest in today, no matter what the future holds.
We collaborated with Lynda Gratton, Professor of Management Practice at London Business School, to identify the most important organisational capabilities that businesses need to consider when preparing for tomorrow’s work, workers and workplaces, so they will be ready to take on the disruptive challenges ahead.
A global survey of more than 1,200 business and HR leaders from 79 countries gauged how important they believe these capabilities are for their future and whether they’re taking action today to build or even introduce them into their organisations. It’s clear that companies understand which capabilities are important for their future success. Nurturing ‘human skills’ ranked as the second most important capability after building trust. Organisations also understand the importance of using data analytics and of creating a working environment that keeps and attracts talent. But we also found that, by their own admission, they’re not doing enough to develop these capabilities. This gap, we believe, will put them at risk in the future when it comes to attracting, developing and retaining talent.
The action imperatives we identify to bridge this ‘at risk’ gap go beyond simply upskilling for technological change. They also address the challenges of creating ‘good work,’ a sense of purpose and the creation and delivery of a great people experience. Some organisations are already ahead of the curve. In this report, we examine the key actions that all forward-looking business leaders should be taking today to keep them competitive tomorrow.
Lynda Gratton, Professor of Management Practice at London Business School, on the imperatives that every HR director should be taking action on right now.
PwC specialists and guests at the 2018 Future of Work Conference answer the question “What will have the biggest impact on jobs in the next ten years?”
Key findings
Based on a survey of 1,246 business and HR leaders in 79 countries
People experience dividend is at risk
Although organisations know how important it is to create the right everyday experience at work – eight out of the top ten capabilities, ranked by importance, show this – they also say they’re failing to deliver. Thirteen of the top 20 ‘at risk’ capabilities relate to the people experience.
Untapped potential in data and analytics
Companies are struggling to use data and advanced analytics to make better decisions about the workforce. The top three ‘at risk’ capabilities all relate to workforce analytics and their use in improving the working environment and people’s behaviours.
Time to get HR and business leaders on the same page
HR leaders are more comfortable with their efforts to prepare the workforce of the future compared with non-HR leaders. In 42 of the 45 capabilities we asked about, a higher percentage of business leaders than HR leaders saw their organisation at risk.
‘Tech-savvy HR’ needs to step forward
HR’s ability to navigate the technology landscape is a top ‘at risk’ capability for organisations. But HR and other leaders don’t see it the same way: 41% of HR leaders are confident that their HR departments are up to speed in this area, but only a quarter of business leaders agree.
Missing out on good ideas and flexible talent
More than half (58%) of respondents say they have no capability to use open innovation and crowdsourced ideas from outside the business and less than 10% agree strongly that they can do this. Similar numbers of respondents say they have the desire but inability to make use of flexible talent – people who work off-site at times that suit them.
Doing right by their people
There’s good news: The capabilities that respondents rate as the most important – building trust, human skills and well-being – are the ones where they are taking most action. But there’s more for organisations to do: 55% have not taken action to create a clear narrative about the future of their workforce and automation.
People experience is at risk around the world
Top three ‘at risk’ capabilities by region
| 1st | 2nd | 3rd | |
|---|---|---|---|
| Global | Data-driven decisions We use insights from big data and advanced analytics in workforce decision making |
Skills gaps We use data analytics to predict and monitor skills gaps in our workforce |
Remove bias We use data analytics to de-bias hiring and rewards |
| Africa | Virtual working We actively support remote and virtual working for everyone whose job role allows for it |
Data-driven decisions We use insights from big data and advanced analytics in workforce decision making |
Work–life balance We attract talented people by providing a good work–life balance and flexibility over hours and working locations |
| Asia | Data-driven decisions We use insights from big data and advanced analytics in workforce decision making |
Flexible talent We are able to engage easily with flexible talent as and when they are needed |
Manageable workloads The workload is manageable enough at our company that employees are able to make full use of their vacation allowance and relax away from work pressures most evenings and weekends |
| Australasia | Skills gaps We use data analytics to predict and monitor skills gaps in our workforce |
Social network We have a robust virtual social platform and/or cloud technology that enables collaboration between employees |
Data-driven decisions We use insights from big data and advanced analytics in workforce decision making |
| Central and South America | Data-driven decisions We use insights from big data and advanced analytics in workforce decision making |
Skills gaps We use data analytics to predict and monitor skills gaps in our workforce |
Flexible talent We are able to engage easily with flexible talent as and when they are needed |
| Middle East | Manageable workloads The workload is manageable enough at our company that employees are able to make full use of their vacation allowance and relax away from work pressures most evenings and weekends |
Remove bias We use data analytics to de-bias hiring and rewards |
Work–life balance We attract talented people by providing a good work–life balance and flexibility over hours and working locations |
| North America | Manageable workloads The workload is manageable enough at our company that employees are able to make full use of their vacation allowance and relax away from work pressures most evenings and weekends |
Remove bias We use data analytics to de-bias hiring and rewards |
Tech-savvy HR Our HR leaders have a depth of understanding and insight into the technological landscape |
| Western Europe | Data-driven decisions We use insights from big data and advanced analytics in workforce decision making |
Adaptability Our talent practices and processes (e.g., rotations, secondments, learning and development opportunities) are designed to nurture employee agility and adaptability |
Tech-savvy HR Our HR leaders have a depth of understanding and insight into the technological landscape |
Building trust and taking action: the first steps
Societies now expect businesses to not only generate profits but also improve economic and social conditions within communities. In the area of trust, 83% of respondents think they’re delivering: they feel their organisations are trusted by society, customers and employees
CEOs agree. In the 2018 CEO survey, the majority (57%) said they’ve not experienced a decline in trust between the workforce and leadership.9 Greater disclosure of information on pay gaps and the representation of women and minority groups at senior levels is helping in this area. Transparency also applies to the effects of automation on the jobs and workers. Sixty-four percent of respondents said they are mapping areas of repeatable activity. But they need to be much clearer about how they are communicating what life in a new AI and data-enhanced world will look like – and to share this information in a sensitive way.
On the capabilities that respondents said were most important for future success – building trust, supporting human skills and employee well-being, there is some progress. But we would argue that though these are good first steps, they are only a start. All of the 45 capabilities that we identified have a role to play in the success of an organisation. It’s important to prioritise them based on sector and capacity, but it is also important to be aware of the gaps. It’s time to develop a strategy for what has to be done next.
91% of respondents see being an organisation trusted by society as important to their future
Gain insights from employees
For some organisations, the automation mapping process is a top-down exercise; others are inviting employees to contribute. We advocate the latter approach for greater inclusivity. For example, Aviva plc empowered 16,000 of its staff to identify elements of their role that could be automated so that they could be trained in a higher skill function.10 Here, the organisation is making inclusive automation decisions based on purpose and on embracing continuous learning to help workers remain employable. In the survey, organisations said they are acting on both of these capabilities today.
Incentivise development
Employees should also be incentivised to develop the skills that will enable them to add value and be employable in the future. This includes building soft skills alongside digital skills. More than three-quarters of respondents report that re-skilling, using continuous learning and effective incentives are high on the corporate agenda. The rise of learning platforms in organisations, enabling peer-to-peer information sharing and the ability to set up communities around content are some examples of what is happening now.
Tapping into diverse talent pools
Traditional talent practices can inadvertently filter out diversity and sideline older workers. Today, the need to access diverse talent pools is multiplied by a decline in new workers entering the workforce in most Western markets.
Organisations are looking to retain relationships with employees that leave, as they often return later, and 60% ranked having community outreach, internship and apprenticeship programmes to recruit people from less privileged and/ or more diverse backgrounds as very important. More than half said they were doing this already. The survey showed that 35% of respondents said it was very important to make hiring, engaging and retaining workers over the age of 60 a key part of their people strategy, and one-fifth said they were actively doing this.
A broader view of inclusivity
Today’s workers want to be included and feel they have ideas and experience to add to the business decisions within their organisation. Inclusivity beyond diversity is important, and how organisations make their workers feel they are involved and are helping to shape the future will be a key part of the people experience for tomorrow.
The question is no longer if, or even when, the workforce will be transformed. It’s happening now. The key point is how quickly business and HR leaders can gauge and respond to the implications and prepare their organisations for the future.
Bringing together the skills, technology and organisational foundations are just the beginning. The real differentiators are the ability to build trust and deliver the people experience that inspires commitment and ultimately maximises the organisation’s potential.
People understand that boring, repetitive tasks will be done by robots and that workers whose jobs disappear will need to learn new skills. But if leaders are not clear about their vision and strategy and don’t communicate what they plan to do, workers will lose confidence in the organisation and its future.
Our survey reveals encouraging progress but also potentially damaging gaps between understanding the problems and taking actions to solve them; these gaps must be addressed. The key starting point is collaboration between business and HR leaders to develop the big-ambition vision that identifies how to programmatically build the future-ready workforce. To move forward, it’s important to challenge what you are doing now to see if it is adding value and to act swiftly to change any programmes that are not. This will ensure that all valuable resources are tightly focused on activities that do, or will, have an impact. Acting on many of the points raised in this report also demands a level of experimentation, perhaps starting small in parts of the firm before scaling up to programmes.
It’s therefore important to normalise the concept of experimentation and piloting as we adapt to the future of work. Ultimately, preparing for the future requires action today. Companies that embrace the new realities, recognise the urgency and work with their employees to deal with change will have a powerful advantage.
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