2020 promises to be an exciting year. As we hurl headlong into a new decade, the intertwining forces of technology, economics, politics and shifting demographics will usher in a host of new opportunities (and challenges) for businesses to grasp.
From the C-suite to street sweepers, the world of work is changing beyond recognition.
Disruption is the new norm. New job categories, roles and even industries have seemingly appeared out of nowhere. At the same time, some traditional vocations have been unable to stay afloat amid the choppy waters of rapid change. For every Airbnb or Netflix that inspires us to innovate, there’s also a Thomas Cook or Blockbuster that makes us throw caution to the wind.
As any leader will no doubt testify, fierce competition for talent and a widening skills gap also contribute to this volatile climate of disruption. So too does the changing nature of work. The modern employee will not simply be satisfied with a paycheck and perks such as health insurance; above all, they want engagement, purpose and value.
More than ever before, businesses must adapt and remain agile to attract talent in uncertain markets. With technology expanding at a rate that feels almost impossible to keep up with, HR and talent acquisition professionals need to harness the latest technologies and anticipate the next major talent and HR trends lurking around the corner.
The trends that are poised to shake up the global talent market in 2020 and beyond may come as a surprise. Some may already be implemented within your organisation. But one thing’s for sure: success is dependent upon understanding these ongoing trends and futureproofing your business accordingly.
The rise of Millennials + Gen Z
Not since the Baby Boomers entered the workforce in the late 1960s and early 1970s has business seen a demographic shift as seismic as the one currently taking place in workplaces across the globe.
Millennials, roughly born between 1981 and 1995, have been prominent in the workforce since the mid-2000s, while Gen Z — born between 1996 and 2010 — are starting to make their mark.
Though several commentators have erroneously predicted that Millennials will make up 75% of the global talent pool in 2025 (a figure which HR expert Anita Lettink helpfully debunks in this article), they already make up a still sizeable one-third of the workforce. With Gen Z factored into the equation, these two generations will soon form the majority in an average workplace.
Both of these generational cohorts have been instrumental in the major disruptions that have defined 21st-century business; from established Silicon Valley upstarts like Mark Zuckerberg to the Instagram entrepreneurs of today. No wonder that Millennials are turning traditional leadership on its head.
Typically, Millennials and their Gen Z colleagues are tech-savvy, people-orientated, hyperconnected and value flexibility above traditional perks like pay. As digital natives, they expect to work in the same way they navigate the world around them: online.
Unlike older generations, they do not expect to stay with one organisation for their entire careers. Having come of age during times of economic uncertainty and sociopolitical upheaval, they anticipate a career characterised by professional nomadism. As businesses seek to remain agile, job stability is not something to be taken for granted, which partly explains why younger employees crave security and belonging in the workplace.
Moving forward, businesses need to acknowledge that their best and brightest may up sticks within one or two years of joining. To help curb job-hopping and boost retention, leaders need to foster cultures that meet the needs of their people — from a market-appropriate salary all the way to self-actualisation. Fine-tuning a holistic employee experience that works for all is key.
One word of warning, though. While it’s important to build for the future and accommodate Gen Zers who are joining the workforce, it’s equally important to ensure that the experience, skills and insights of older employees are not undervalued. Any truly representational workforce should be able to call on multigenerational expertise — from sage Vietnam War veterans in their 60s to wide-eyed interns fresh out of high school.
Remote work and permanent flexibility
The days of the rigid 9-to-5 schedule are long gone. Business leaders no longer see presenteeism and productivity as two sides of the same coin. As the startup disruptors of the early 21st century have shown, being duty-bound to your desk for 40 hours a week simply doesn’t make sense. Since 2005, the number of people who work from home has increased by 140% (Global Workplace Analytics) — and this figure is set to soar even higher in the 2020s.
The workforce is young, ambitious and hungry for working arrangements that offer flexibility. According to Qualtrics, 76% of Millennials would take a pay cut to work for a company that offered flexible working hours.
Meanwhile, data from SmallBizGenius suggests that 40% of people feel the greatest benefit of remote work is the flexible schedule. An Owl Labs study also found that 16% of companies already hire exclusively remote workers. By 2028, Upwork predicts that 73% of all companies will hire remote workers.
Not everyone has caught onto the trend, however. Globally, 44% of companies do not allow remote working at all (Owl Labs). This may prove to be the undoing of many businesses.
With the workforce getting younger and more tune in with flexible working practices, it won’t be long until the traditional 9-to-5 is consigned to the pages of corporate history alongside fax machines and telephone directories.
“Work-life balance” is an overused term that has been doing the rounds for years. But while many pundits and business experts have been quick to celebrate the merits of separating work from everything else, the concept will become redundant in the workplace of the future.
By framing the relationship between work and life as a balancing act, the term connotes that they are polar opposites. Of course, this doesn’t mirror reality. Providing we get eight hours of sleep a night, this means there are 112 waking hours every week. Given that the average person in the UK works roughly 37 to 40 hours a week, a full third of our conscious time is spent on the job.
In today’s always-on, hyperconnected world, keeping work and life at arm’s length is a futile endeavour. Work has a huge impact on our personal lives, and the reverse is also true. Instead of separating our personal and professional lives, people increasingly want to integrate the two.
In this sense, the concept of work-life integration takes a holistic approach to talent management which aims to provide purpose and fulfilment to employee’s lives. If people are encouraged to bring their idiosyncratic personalities and ideas to the workplace, they are more likely to be productively engaged.
The idea of a “digital detox” is one prominent example of how the principles of work-life integration are being used to improve employee wellbeing. As an ever-greater chunk of the workforce relies on tech to perform their role, the challenge becomes ensuring that people don’t use it too much. Every now and then, we all need a welcome break from Outlook.
Business is taking note: since 2017, French companies with more than 50 employees are required by law to guarantee workers the “right to disconnect” from technology when they leave the office at night. The likelihood is that we'll see similar schemes across the globe as the decade progresses.
Harnessing tech strategically
Thanks to the ongoing technological innovation of the Fourth Industrial Revolution, ubiquitous brands like Amazon, Uber and Deliveroo have already changed the face of customer experience. Now, artificial intelligence (AI), machine learning (ML) and other emerging technologies are increasingly being deployed to revolutionise employee experience.
The convergence of employee experience and tech is an interesting trend. As mentioned earlier, salary and location is not the be-all and end-all for the modern job seeker. People yearn for a culture of innovation, as the brain drain to major tech hubs like Silicon Valley demonstrates. The hard truth is this: companies that fail to strategically deploy technology will simply not attract the talent they need.
For senior leaders, how to best utilise technology is never far from boardroom conversation. Moore’s Law asserts that computational power doubles every two years, so businesses need to be on their toes to keep tabs on this exponential change and maintain a competitive advantage. According to PwC, AI could contribute US$15.7 trillion to the global economy by 2030. Innovation is no longer a luxury; it’s a competitive necessity.
Broadly speaking, here are some of the ways that talent is set to be transformed by technology in 2020.
Digital devices in the Internet of Things (IoT) and Industrial Internet of Things (IIoT) are able to gather vast amounts of data — data that is being put to use by companies looking to gain competitive insights in their field. In talent management, this data-driven approach has proven vital for training and developing existing talent, as well as for digitising learning and development (L&D) programmes.
While big data has been leveraged in some areas of the workforce solutions industry, there are still plenty of areas that stand to benefit from AI, such as using predictive analytics to forecast future hiring needs. Employee data points are also becoming ever more varied — from social media activity to emotion recognition technology — giving business leaders more scope to understand the wants and desires of their people.
2020 will see the further automation of processes as companies utilise the problem-solving power of tech to boost productivity. Data insights from automation can help businesses streamline internal processes such as onboarding, timesheet management and exit interviews.
Successful digital transformation is impossible without first ironing out longstanding inefficiencies, however. According to a Celonis survey, 44% of senior leaders admit they don’t know where to start when developing their transformation strategy.
For automation to properly improve productivity, reduce labour cost and increase ROI — improving scalability and adaptability to market demand — a strategic approach to digitisation is needed.
For years, businesses have been quick to jump on the digitisation bandwagon by investing in a host of digital tools for employees to use. Instead of optimising workflows, this has often compounded confusion. As a recent Avanade survey conducted with YouGov found, only 39% of UK professionals have embraced communication technologies such as Skype or Workplace by Facebook.
Clearly, the challenge for businesses is not just rolling out new digital platforms, but convincing employees to use them. Quite often, there are just too many digital tools for people to keep track of. The trend towards further integration can help simplify matters.
With integrated collaboration platforms such as MS Teams, businesses can consolidate workflows and tools — strengthen employee experience and candidate attraction in the process. Moreover, further integration enables businesses to keep up in an increasingly globalised world. Instead of being out of the loop, remote workers and colleagues/partners in different geographies can receive real-time project updates via a platform that avoids the pitfalls of traditional email communications.
A more blended workforce
How we work has shifted dramatically in the last decade. Though full-time manufacturing jobs have seen a steep decline, self-employment, part-time work and contractors all continue to rise year-on-year. With a growing contingent workforce and the rise of the gig economy, the current labour market is more diverse than ever.
Work is becoming transitory and transactional. According to Intuit, contingent workers will exceed 40% of the US labour market in 2020. With global interconnectivity causing greater market volatility, businesses cannot afford to manage a sufficiently diverse range of skills to cover all the bases. Managers are growing more cautious around making permanent hires and instead look to bring in more temporary labour.
In the 2020s, the way companies structure their businesses and manage their staff will undergo change, too. The challenge will shift from staff management to partnership management — of suppliers, joint ventures and outsourced arrangements.
Work is increasingly done by people brought in specifically to perform one task, so businesses need to consider their workforce more holistically. This involves adapting their talent acquisition, sourcing, measurement, performance and engagement strategies. At the same time, employees will be viewed more as partners than staff, resulting in increasingly flat corporate structures where people’s roles and responsibilities are fluid.
In response to the expanding contingent workforce, contingent RPO has become the talent solution of choice for businesses looking to stay abreast of labour market trends.
Contingent RPO brings new elements to an MSP solution — including employer branding, direct sourcing and employer value propositions (EVP). With the contingent talent market becoming increasingly competitive, businesses need to use the strength of their brand to attract and engage contractors and temporary workers. Contingent RPO may prove to be the solution in this regard — helping businesses to find the best talent while also reducing costs.
Conclusion: will this be the year we finally address global skills shortages?
That business is changing at a rapid clip is clear for all to see. In the 2020s, the labour market will increasingly be divided between humans, machines and algorithms. As technologies develop at breakneck speed, the skills needed to augment them will also evolve.
According to the World Economic Forum, at least 133 million new roles generated as a result of this new division of labour may emerge globally by 2022. This means the already huge demand for STEM skills such as programming and edge computing will continue to increase. But with the rise of a more mobile and global workforce, the stark skills gap that already underpins the labour market is set to widen even further.
And when we find ourselves in a situation whereby digital natives are entering the talent pool after graduation without the skills that employers are looking for, it’s time for us to collectively rethink talent management.
2020 represents an opportunity for us all to bridge this widening skills chasm and help young people make their first steps onto the career ladder. Following on from the trends we examined, some talent acquisition strategies to achieve this include:
- Knowledge sharing between generations. Millennials and Gen Z are curious, independent and tech-savvy, but this is no guarantee of getting a foot in the door. Likewise, Baby Boomer and Generation X employees can often feel like they are being left behind as the technological treadmill continues to churn out new skills. By setting up initiatives to share expertise between generations, businesses can give people the opportunity to adapt and evolve their existing skills — helping them traverse future uncertainty with more confidence.
- Educating the workforce of the future. We all understand the importance of on-the-job training. Given the skills shortage, it’s much more than a noble endeavour. But from a strategic standpoint, upskilling existing employees isn’t enough to consolidate an organisation’s long-term workforce. By actively getting involved with schools and universities to encourage today’s students to develop the skills of tomorrow, businesses will not only create important connections in their talent acquisition and community outreach efforts but will also directly benefit the wider economy.
- Changing our collective mindset. Whether we like it or not, the business world is constantly in flux. For leaders, the choice is simple: embrace the ongoing trends, or remain stubborn and see our competitors leave us lagging perilously behind. Of course, there’s no silver bullet. But by demonstrating social awareness, enhancing employee engagement and adopting the latest tech — and building inclusive business strategies around these trends — companies can foster a two-way process that inspires people rather than demoralising them.
Moving into the 2020s, the global talent market represents something of a paradox. While it has never been so unstable, it has also never offered so much opportunity for positive change. In attracting and retaining talent, forward-thinking businesses are moving away from the traditional view of employees as commodities. Instead, employees are increasingly being celebrated for their worth as thinking, feeling individuals. And long may this trend continue.
The future of work is certainly upon us. By finding the right balance between creativity, collaboration and strategic thinking, we can close the skills gap. We can make the 2020s a future that works for all.