Workforce Radar
To build the workforce of tomorrow, the time to act is now
Evolving your workforce over the next three years is vital. PwC’s inaugural Workforce Radar research report provides practical steps businesses can take to not just change with the times but lead that change.
We’ve spent the last year researching how business leaders and CHROs can use workforce levers in new ways to drive desired business outcomes. This included identifying five workforce signals — each of which can be acted upon by using certain levers, or actions that businesses can customize and expand. When used with intention, these levers can empower your C-suite and workforce to drive enterprise-wide transformation.
Transform your workforce
PwC's Workforce Radar Report
Signal 1: Taking both a talent magnet and talent factory approach
Talent factories are known for being places where people want to stay and build their careers. Talent magnets are attractive places to work that inspire people to join. But you don't have to choose. Think of it as a sliding scale. Organizations in growth mode, for instance, will need to focus on being a talent magnet. Organizations that are struggling to find emerging talent may need to look within to develop that talent as a talent factory.
Whatever you decide, you must be intentional based on your data and insights into your business. We found that while nearly all business and HR leaders are fairly confident that they're both talent magnets and talent factories, a far smaller percentage of employees agree. That reveals a disconnect between what companies are saying and what the workforce is experiencing.
Here are four levers that can help get your organization where you want to be on that sliding scale.
Signal 2: Devising a location strategy that appreciates over time
Rigid return-to-office mandates generally haven’t worked, but what does? You should devise a plan that marries the desired behaviors of your employees with the physical space you expect them to work in. For example, we found that hybrid workers are generally more satisfied than fully on-site and fully remote employees.
No matter where you land, the decisions will have tax implications that further complicate your location strategy. We’re seeing CHROs and CFOs collaborate to determine pros and cons of hiring in new taxing jurisdictions, developing fit-for-purpose remote work programs or relocating workforces to access specific skills and talent pools.
These levers can help you devise a flexible, sustainable and employee-first location strategy that can reduce your spending while improving the employee work experience
Signal 3: The intelligent enterprise
Among the biggest challenges executives face involve continuing to build out foundational technologies, training the workforce on new tech and achieving measurable value from investments in both. AI is fundamentally changing businesses — right down to how workers perform their jobs, skills needed, how industry dynamics will shift and what that means for a company’s ability to compete. To succeed, leaders should understand these changes as well as they know their own organizations.
HR leaders need to reap a return on massive human capital management (HCM) cloud investments. If they aren’t doing so, they need to remediate to enable the AI-powered intelligent enterprise. Over the coming three years, AI-powered workflows and talent intelligence will be differentiators that can help you access data and transform the way you make decisions to move forward more quickly.
Signal 4: Optimizing your workforce balance sheet
Our research indicates that senior leaders rarely grasp the total cost of their workforce and how they can optimize the cost basis beyond headcount reductions. Many companies, we’ve found, don’t even know the usage stats of their benefit offerings because so much of it is outsourced to third-party providers.
A workforce balance sheet approach can help your company free cash flow to return to the bottom line and reinvest in critical capabilities like AI. This promotes benefits from tax efficiencies, location/real estate costs and delivery efficiencies of HR/reward programs as much as it benefits employees. The important part comes from unlocking the intelligence of your spend and focusing on the key preferences of the workforce.
Some business leaders seem to understand this and are looking at doing a major reorganization of their operating model in the near term. That indicates more companies are moving beyond staff cuts to ways to improve worker productivity.
Key components of the workforce balance sheet look at both direct and indirect costs of HR.
Signal 5: Investing in building transformative leaders
Over the next three years, business leaders need to demonstrate their value from the top down. They need to take ownership of the kind of innovative leadership their organizations deserve to prepare for — and navigate through — massive shifts and coming change.
To deliver on any of the actions identified in Workforce Radar, organizations need to have leaders who are agile, resilient, innovative and empathetic. This isn’t something you get from sending executives on retreats. These levers can help you reimagine, recalibrate and, in some ways, reinvent how leaders can pursue their business strategies and objectives.
Use the Workforce Radar to accelerate your business outcomes
Even if your business could go back to pre-pandemic behaviors, it would be a mistake. There’s an extraordinary opportunity to embrace the future and shape your organization to achieve real business results.
The five signals and accompanying levers we’ve outlined here — and explored in detail in the report — are fundamental to any progress you envision over the next three years. Concentrate on where to focus and what to prioritize.
- Empower your talent strategy to deliver on your business strategy. Do you need to lean into being a talent magnet or a talent factory? Revamp your talent architecture for insights into the types of talent you have and need. Clarify expectations for professional growth and advancement, and make sure performance management rewards people for their contribution to business outcomes.
- Articulate a location strategy. Map the insights you’ve formed from your talent architecture to your geographic footprint and look for gaps. You may not have an anchor in the places where you can attract that talent. Account for the tax implications and compliance requirements, including locations where your employees work remotely.
- Make sure you’re getting ROI on your technology. Analyze where your current technology is providing the ROI you expected when you implemented it and, more importantly, where it's not. Visibility into your tech ROI is essential. You can't invest in any foundational technology — let alone new technologies like AI — without it. You can't lean into your talent magnet or talent factory side, and you won’t be able to innovate to stay relevant.
- Use your workforce balance sheet to analyze the total cost of your workforce. Identify the data categories that are relevant, like total cost of HR and labor mix, and who in your organization is responsible for collecting and analyzing that data. This is the only way you’ll start to understand where the money is going in each area and how you can spend less in one area to reinvest in another.
- Invest in your leaders. Companies will need to build internal trust, and that means developing your leadership muscle — communicating the reasoning behind strategic decisions and genuinely supporting all levels of workers through transformation.
About this report
Workforce Radar is based on research of companies, clients and data across the PwC network, including an April 2024 survey of more than 18,000 employees, 2,600 business leaders and 1,300 HR leaders. The lead authors of this research report include:
Anthony Abbatiello
Workforce Transformation Practice Leader, PwC US
Anthony leads the human capital consulting business for PwC and has spent three decades researching, leading and practicing across leadership, talent and human resources consulting.
Reid Carpenter
Global Leader, The Katzenbach Center for Leadership and Culture, PwC US
Reid leads PwC’s center of expertise focused on providing practical, innovative insights around culture and leadership for organizations.
Christopher Hannegan
Principal, Workforce Transformation, PwC US
Christopher is a leader of PwC’s leadership and culture offering as part of the Workforce Transformation practice. He has over 30 years of experience helping companies accelerate transformation through a focus on people.
Julia Lamm
Principal, Workforce Transformation, PwC US
Julia is a leader in PwC’s Workforce Transformation practice, focusing on financial services and helping clients address challenges related to workforce strategy and planning, talent transformation and change management/adoption.
Craig O’Donnell
Principal, Workforce Transformation, PwC US
Craig leads the commercial efforts for PwC’s HR and people-related practice areas. He has spent more than 30 years helping clients optimize their reward programs and general HR processes.
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