Changing Workplace And Workforce Expectations Business Essay
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Published: Mon, 5 Dec 2016
The key objective of this literature review is to provide a general survey of relevant theories, academic approaches, available studies and analysis on forecasted shifts in science, technology, communications, geopolitics, and economics between today and 2030 and the impact these factors will have on corporate workforce, employment models and the role of a leader in organization and leadership competencies. The horizon line for strategic planning and forecasts in most cases typically ranges from three months to five years. Trying to imagine what the world of business will be like 20 years from now is a challenging and noble goal but a researcher is exposed to several risks. One of them is to be too futuristic and end up with a science fiction which would have a little correspondence to the objective reality. The importance of the literature search is to avoid this trap and ground the dissertation on realistic, reliable and reasonable facts and evidences.
It will also support the designing of research methodology and developing relevant questionnaire for conducting interviews with IBM and non IBM top management and executives.
The scope of literature research
The business is entering a new era in history undergoing serious changes caused by globalization, economic rise of new regions, dramatic shifts in demographics, science, technology, communications and geopolitics. The research community and leading multinational companies have already embarked on a series of forward-looking discussions to consider the macro trends driving business change in the decades to come, and the implications that will result for business and leaders who will drive the future success. The forecasts and researches done in this area cover such topics as:
changing workplace and workforce expectations
new employment models and employee engagement instruments that would help business navigate in the future
potential leadership styles needed in an organization with new and emerging employment relationships
roles and accountabilities a leader of the future will have and potential challenges the leader need to be prepared for
The Changing World
There are many factors in the environment that affect the organizations and the decisions of the leaders of each organization. Huczynski and Buchanan (2007) argue that “the world out there” influences “the world in there” (Figure 1).
Internal organization structures, processes and behaviors
External environment factor, trends and developments
Figure 1 The external environment – external environment organization link
There are different environmental scanning techniques to analyze the changing external environment. To build the vision of the future and understand the big picture of the macro-environmental influences PESTLE analysis concept (Figure 2) will be used. “A PESTLE analysis is often used as a generic ‘orientation’ tool, finding out where an organization or product is in the context of what is happening outside that will at some point affect what is happening inside an organization” (CIPD, 2010).
Figure 1. PESTLE Analysis
Most of the researchers agree that by 2025 there will be a global multi-polar system with rise of China, India and some others. Power will be more dispersed with the newer players bringing new rules of the game while risks will increase that the traditional Western alliances will weaken (“Global Trends 2025: Transformed World”, 2008). USA will remain the provider of global security (FreeWorldAcademy, 2005) but will have to share the power with other new players. Researches expect China becomes a democratic country in 2030 and gain more political power. Some experts also expect greater Asian regionalism by 2025, which may lead to establishment of new “quasi-blocks”: North America, Europe and East Asia and new wave of political and economical competition (Global Trends 2025: Transformed World”, 2008).
The potential for conflict and instability is expected to increase in Middle East and North Africa. At the same time McKinsey Global Institute predicts the acceleration of Africa’s growth where government actions will manage to end political conflicts and improve business climate (McKinsey Global Institute, 2010).
It’s also expected that global negotiations between regional blocks and national governments on major issues for the planet, such as biodiversity, natural resources, energy policy and trade regulation will increase and possible result in establishment of new alliances and communities.
Driven by higher world population, competition for natural resources, pollution levels Green will become fundamental geo-political and business imperative for the planet.
By 2030 the world will become “flatter” with an expanded base of financial power where barriers to the flow of goods, capital or knowledge will be almost removed (“A View of the World in 2030”, ACCA, 2010) which will more regulation on a global level. It’s also expected that the global power will shift to emerging markets. This statement confirms Goldman Sachs Group Inc. that the market value of emerging-market stocks may grow more to $80 trillion in two decades, overtaking developed nations, as China becomes the world’s largest stock market (Bloomberg, 2010). Multiple centers of economic power will be distributed around the globe and organizations/countries will need to be culturally adaptable to compete in global markets
Figure 2. demonstrates forecasted transition of GDP by 2030.
Figure 2. Transition of GDP 2030 (Cabinet Office, Government of Japan, 2010)
The transfer of global wealth and economic power roughly from West to East, is the most discussable topic in most of the reports and forecasts. This shift can be explained by several reasons :
– increases in oil and commodity prices generated big profits for the Gulf states and Russia
– lower costs combined with government policies have shifted the focus of manufacturing and some service industries to Asia
– power will shift to the places with political and economic stability (“Global Trends 2025”, 2008)
The world GNI will also undergo the evolution and regional repartition. As indicated on Figure 3. it is expected to reach 94,290 $Billion in 2030 comparing to 39,305 $Billion in 2004.
World GNI 39,305 94,290
Population 6,480 8,200
World income per capita 6,065 11,500
Figure 3. World GNI 2004 & 2030 (Cabinet Office, Government of Japan, 2010)
This economic trend implies an average growth rate of 3.4% over 26 years. Compared to the population growth rate 1%, it means that the world income per capita will increase by 2.4% per year over the period
Asia becomes a strong visible player in the regional GNI repartition (Figure 4).
Figure 4. Evolution of the main economic zone in % of the world GNI (Cabinet Office, Government of Japan, 2010)
Asia’s emerging consumers are likely to assume the traditional role of the US and European middle classes as global consumers, and to play a key role in rebalancing the world’s economy. Estimated $4.3 trillion in annual expenditures in 2008 becomes $32 trillion in 2030 and comprise about 43% of worldwide consumption (“2030 GDP Forecast, Future growth of Asian Countries”, Cabinet Office, Government of Japan, 2010)
Several researches and reports expect the rising BRIC powers which might collectively generate the original G-7’s share of global GDP by 2040-2050 (“Global Trends 2025”, 2008). Meanwhile other sources suggest that new business opportunities will significantly rise in so-called BIICS-Brazil, India, Indonesia, China, and South Africa-shaping up to be business hot spots for many years to come (“Working Beyond Borders: Insights from the Global Chief Human Resources Officer Study”, IBM, 2010).
But the truly new business frontier is named Africa where a group of countries already demonstrated ability to improve macroeconomic conditions, privatised state-owned enterprises, increased openness of trade and lowered corporate taxes, strengthened regulatory and legal systems, provided critical physical and social infrastructure(McKinsey Global Institute, 2010). The rate of return on foreign investment is currently higher than in any other developing region. These factors make this region very attractive for further business development and investments. According to Paul Nunes, Executive Research Fellow at the Accenture Institute for High Performance: “Businesses not planning and acting now [to get into Africa] will miss the boat – as many did when it came to China.”
Researchers forecast the standards of living will have risen by 2030. Number of high income people will increase by 8%, number of low income will decrease by 14% but inequalities will remain (“Global Trends 2025”, 2008).
In essence, the economic world will look different than the world today. There will be multiple centers of economic powers, new players will mount the economic and political scene creating new business opportunities, overall, globalized and multi-polar world which will require organizations to re-think their strategies and re-shape their businesses to take full advantage of new opportunities and prosper.
The next 20 years will be characterized by serious and inevitable demographic changes and shifts and their economic, political and social impacts will be enormous. Researchers highlight key demographics marked trends of years to come.
World population will increase to 8.2 billion by 2030 with the largest increase projected in Asia and Africa and less than 3% will occur in Europe, USA, Canada, Japan (“Global Trends 2025”, 2008)
Figure.. Population shifts will continue
Africa will have the world’s largest working-age population. In 2008 the continent had more than 500 million working-age people and by 2040 it’s forecasted to exceed 1.1 bln (Figure, 6). It’s an open question whether Africa will be able to educate it’s workforce to make it serious engine for business world.
Figure 6. Working-age population 1950-2040 (McKinsey Global Institute, 2010)
Longevity will increase significantly almost everywhere and the number of people aged 80 years or over will grow (Figure). Coming decades will be defined by the largest demographic group ever seen. By 2030 at least 3 generations having different mindset, background, expectations and attitudes will meet together in one society and work together for the same employers.
Source: U.S. Census Bureau, Population Division
people will be more individualistic and will forge lifestyles based on their own needs rather than social expectations
norm will be to work much of the time from home or in small community hubs to avoid carbon costs and charge of lenghthy commutes
more people will work as freelancers and “neo-nomads” expecting more autonomy and freedom
power will shift where there is political and economic stability
Most of researchers emphasize the role of technology in fostering the innovation and bringing about change. Technology will be all-prevasive and universal serving as a key driver for economic and social shifts. L. Gratton (2011) suggests that technology will influence workforce and workplace in many ways the way people communicate with each other, their expectations and even their views on morality and human nature
The internet “Cloud” will deliver low-cost computing services and enable the shift from working as an isolated individual to working collaboratively in a joined world regardless country and time zone of staying (McKinsey and Company, 2010). People across the world will be able to access enormous information including digitalized knowledge. Increased capacity to combine and connect know-how, share knowledge, information and best practices spending significantly less time to send and receive information will lead to people being more interconnected, united by new communities and networks (IBM, 2010). More than 5 bln people will be connected to mobile services (The Economist, 2011) and overall speed of live will rise. The other change which is expected to influence the workforce is massive crowd of computers replacing people in a number of jobs.
Forcing the economic growth and social transformation technology will continue to reshape consumer needs, requirements, access to information, choice and interactivity models and demand companies to tap the power of technology to improve their competitive advantage (McKinsey and Company, 2010).
The expected changes to happen in the world will place a pressure on labor regulation to force their activities in accommodating a networked, open and competitive world. The worldwide focus on growth will require companies to fundamentally rethink how they manage human resources and overcome barriers. Based on IBM 2010 Global CHRO Study, emerging ways of attracting talent like outsourcing, crowdsourcing, use of freelancers, bringing back retired workers which will assume ever greater importance and necessity to mange new forms of employments will require governments not only to develop new labor regulations but also modern information security norms and standards. The highest standards of corporate citizenship will be required – by talent, by governments, by the media.
There may not be world law in the foreseeable future, but the world’s legal systems will be networked. The Global Legal Information Network (GLIN), a database of local and national laws for more than 50 participating countries, will grow to include more than 100 counties by 2010. The database will lay the groundwork for a more universal understanding of the diversity of laws between nations and will create new opportunities for peace and international partnership. -Joseph N. Pelton, “Toward a Global Rule of Law: A Practical Step Toward World Peace,” Nov-Dec 2007, p. 25
There is a significant pressure to expect by 2030 driven by significant growth in world economy and population and rising aspirations for better standards living. As describe by OECD (“Environmental Outlook to 2030”, 2008) there are several key environmental challenges the humanity will have to deal with: climate change, biodiversity and renewable natural resources, water, air quality, waste management. To respond to these challenges governments will have to take the responsibility and proactively start developing a serious of actions to protect the environment. Business and consumers will play a key role to help prevent future environment problems. Its obvious that Green will become fundamental geo-political and business imperative for the planet.
Changing workplace and workforce expectations
Emery and Trist (1965) developed a typology describing four types of environment in which organizations operate and identified the appropriate organizational response.
Environmental analysis with PESTLE demonstrates that the organizations 2030 will deal with high dynamism and high complexity pressures from outside. The organizational responses recommended by Emery and Trist (1965) for such environment types are developing fluid organization structures, flexible managers and staff at other levels. Duncan (1979) argues that what really matters is only the management perception. If management does not perceive the environment as turbulent the organizational response will not be as described. Anyway the reality “out there” has to be observed, studied, analyzed and reacted in an appropriate manner to stay successful (Huczynski and Buchanan, 2007).
Being under pressure of future challenges which come from globalization, new era of technologies, social and demographic changes organizations will have to adapt their internal structures, processes, strategies and leader behaviors to enable them to deal effectively with external changes. Many factors that define the workplace 2030 have already become evident alerting the organizations that the time has come to start preparing today for the challenges of tomorrow. PriceWaterHouseCoopers (2010) forecasts three worlds and business models for the future (Figure)
This picture of life in tomorrow combines the events and trends which will shape the future and PwC suggests all 3 worlds can co-exist in some form distinct by geographic principle or industry sector.
Researchers expect the following key trends to shape the workplace and workforce 2030:
Talent will be worldwide. Social networks and future technology will increase the capability for talent to network and for companies to access talent globally and 24/7. Facebook, LinkedIn, Twitter and other social networking sites will become ordinary recruiting sources. As social recruiting spreads from few trendsetters to all the rest companies worldwide it be essential for both employees and employers to develop new set of skills to be successful in this way (“The 2020 workplace”, J. Meister, K. Willyerd, 2010). But it’s also expected the “War for Smart Talent” (www.globalfuturist.com) to be continued and probably even become sharper. There is a serious mismatch between the types of individuals available for work and specific skills employers are looking for (Manpower Talent Shortage Survey 2009). Experienced candidates who possess the required skills will be heavily demanded by the organizations worldwide. Given the increasing collaboration and growing importance of teamwork companies will consider entire teams hiring as a competitive solution to the business problem (IBM CHRO Study 2010).
Skills will be specialized. Cost reductions will be an essential part of business imperatives 2020 – 2030 leading to the dominance of knowledge -intensive work which will require an increasingly complex set of skills. Less generalist, more in-depth mastery of specialist skills will be required. PwC in the “Future of work 2020” (2010) predicts that specialization will be highly prized in each of the 3 worlds (Figure ) and employees will do their best to develop the most sought after professional skills. An increased attention by the companies will be paid to soft skills as well like problem-solving, project management and collaboration (Economist Intelligence Unit, 2010).
Source: McKinsey Global Survey results – Five forces reshaping the global economy (Based on online survey, in the field in March 2010)
Another challenge the companies are expected to face in the future is multigenerational and increasingly diverse workforce. By 2030 3 or even 4 generations will have to collaborate together in one business environment having different mindset, background, expectations and live values. Most of the Baby Boomers cohort representatives who are now holding many CxO positions will have retired, taking with them lots of knowledge, experience and valuable expertise. It will force the companies to elaborate on ways how to retain the knowledge within the organizations developing new employment structures for soon-to-be retiring people (L. Gratton 2011). Or what we call “retirement” now will no longer have a traditional meaning? In terms of their characteristics, lifestyles, and attitudes, Boomers were the most populous and influential generation of all. They have defined themselves by their careers and many are workaholics. Their work is seen as a form of self-fulfillment, status, and proving themselves, i.e., job titles matter. They have crowded into cultural careers such as teaching, religion, journalism, marketing, and the arts. Team orientation is valued. They are anticipated to work longer and harder (Eisner, 2005; Koco, 2006). They are very concerned about health and energy, looking for the sources to stay young, strong and active. Generation X will be in their mid-60’s by 2030. They grew up in the time of economic uncertainty under the pressure of political and economic instability. Many wage and job opportunities for young workers were limited until the economic boom of mid-1990s. (Eisner, 2005; Lager, 2006). Success has been less certain for this generation. They do not believe in positive future time, energy, and relationships for advancement like the Boomers did. They have an economic and psychological “survivor” mentality and consider hard work as necessity. They had to compete in a weak global economy. Diversity and thinking globally are core values of Gen Xers (Cranston, 2008; Francese, 2004; Ritson, 2007). The core driving business force by 2025 – 2030 will be generation Y aged 35 – 45. They witnessed the fast technological evolution with the Internet, Google, eBay, cell phones, PDAs, GPS becoming an admirable part of their lives. Integral parts of their lives is “globalization”, global citizens”, working beyond fiscal boundaries (Hawkins, et al., 2010; Cranston, 2008; Eisner, 2005; Dietz, 2003; Gerritsen, 2008). Most of Gen Y has a strong sense of autonomy and independence, quite adaptable and comfortable in different situations. With blogging, YouTube, MySpace, Facebook, and Twitter anyone can become a reporter, producer, or social advisor. Social networking is a key distinction for this generation (Dickey and Sullivan, 2007; Donnelly, 2008). Gen Y demonstrates an entrepreneurial outlook and is more work/life balance oriented and less committed to an employer than previous generations but demonstrates high commitment when dedicated to a capturing idea. It has been observed the this generations vales “life styles, career development and overseas travel and may be the most adaptable yet in terms of technological skills and values intrinsic aspects of work such as mentoring and training in order to remain marketable” (Cennamo & Gardner, 2008) They expect flexibility in work hours, dress code, relaxed work environment, recognition for smallest effort and constant feedback and value opportunity to downshift to reach a holistic self-understanding and satisfying meaning in life (IBM, 2011). Generation Z also called “the connected generation”, “digital natives”, “the net generation” (“Future of work”, 2012) is the newest generation and it’s hard to say now how they will develop as a generational cohort. By 2030 Gen Z will be taking an increasing role in society and business life. But what is known that they will grow up influenced by the factors described above in PESTLE. That is supposed to be a global and diverse generation. The technological progress and next generation of social networking sites makes it possible to build online communities that are more like someone’s closest group of friends. (Labi, 2008b; Soltan, 2004). PwC research (2011) revealed that Gen Z will be similar to Gen Y in their expectations. But some features will be even more vivid manifested like desire for work/life balance, rapid career progression, less concern about working hours, high interest in new projects and less commitment to one employer. According to D. Tapscott (2008) Net Geners:
Want freedom in everything they do
Love to customize and personalize their experience
Want to find entertainment in their work
Are focused on collaboration and relationship building
Have a need for speed
They will be living in the world where equality and diversity become a societal norm. Finally, they’re going to be smart — smarter even than previous generations. Their ability to process massive amounts of information quickly is actually preparing them to perform more mentally demanding jobs. In effect, an entire generation is training itself to handle more complicated tasks (IBM, 2011).
Influenced by expected demographical changes described above organizations in Europe, North America, Canada will face the decline of Caucasian workers and increase of non-Caucasian. It is projected to double from 18% to 17% (“The 2020 Workplace”, J. Meister, K. Willyerd, 2010)
While people managers are trained to deal with many forms of diversity, they will have to be prepared to manage workforce with greater diversity in age, gender and ethnicity.
Social networks and virtual workspace.
The rapid expansion of the digital universe and advancement in communication technologies will lead to the new meaning of being “at work” and create new ways on how people communicate with each other. Today for a number of jobs it is no longer needed for people to be physically located in the office to successfully perform job responsibilities and by 2030 it is forecasted most of the employers where the business allows will completely relieve their employees from working 9 to 5 office hours (Hewitt Associates, 2008). People will be free to decide where and how to organize their workplace. But Hewitt also emphasize that this capability can bring some employees new level of work/life balance satisfaction and for others it’s fostering workaholic tendency leading to “lousy employees: tired, depressed, mistake prone,
resentful, and eventually burned out” (C. Salter, “Solving the Real Productivity Crisis,” Fast Company, January 2004). Virtual coworking will shape the future workplace. Workers from around the globe of different nations, professions, jobs, social status will be united together by many discussion forums, news groups, and virtual communities making many barriers of the past obsolete. Rapidly developing Cloud technology will make services, applications and resources accessible from any device, anywhere, any time, and if charged pay only for what they use during the time they are using it
Through unprecedented access to virtual space the world of knowledge will be digitalized and enriched significantly by user-generated content (L.Gratton, 2010). Approximately 500 000 new users are creating every day online profiles and maintaining them on a social network (IBM 2011) and researchers forecast this number to grow over the next decades. The future workplace will look like a place where people collaborate extensively, exchange ideas, and share knowledge. The value of an employee will be determined not only by results achieved but also by how much you contribute your expertise and knowledge back to the organization (J. Meister, K. Willyerd, “The 2020 workplace”, 2010). The expected growth in virtual-based content will impact many organizational parts from changing corporate culture and standards of how people share knowledge and communicate with each other to the ways, policies and norms of how company’s management deals with security and privacy of this explosion of the digital content.
The current workforce lifecycle has outlived its meaning.
In the organizations of future individual careers are not based on relative or hierarchical moves but rather on reputational progress. Rather, people will choose the pace and direction of this progression according to their reputation and their own personal goals. Alternative careers will enable individuals to work and contribute throughout their entire lives and well beyond the traditional retirement age. In fact, the notions of retirement and retiree will be removed from our vocabulary since careers are based on the choices that each individual makes and not on the concept of seniority
C. Benko and A. Molly introduced the concept of “corporate lattice”. In the new business world with heterogeneity of backgrounds, personal circumstances, expectations and aspirations it recognizes that career and life are no longer separate spheres but are now interdependent. This concept is expected to be a robust response to multiple changes organizations will face allowing to connect both high performance and career-life fit. Figure below describes how lattice thinking differs from ladder thinking. (C. Benko and A. Molly, “The corporate lattice”, ). The lattice structures an employee’s career path as multidirectional with opportunity to move across and down and up ensuring engagement of a diverse workforce driven mainly by desire to work for to be working with the best company, on the best projects, for the best clients, and with the best talent and team members.
Source: Deloitte Development LLC, “The Corporate Lattice” (2010).
IBM analysts (2010) elaborated and continued this concept by the next level of organizational development which can be expected by 2030 (Figure). Self-directed global-citizens will be managing their careers in a “cube” without limiting it to the frames of one organization.
To succeed in the lattice-based organizations reputation will gain new meaning. This is the sum total of personal brand, expertise, number of successfully completed projects, ratings given by employers, breadth and depth of social networks, etc (J. Meister, K. Willyerd, “The 2020 workplace”, 2010). Individuals with a poor or low profile or ‘reputation’ would ultimately diminish their personal brand and consequently have more difficulty securing opportunities and maintaining their labor rate against others.
new employment models and employee engagement instruments that would help business navigate in the future
Employee engagement is defined differently by different organizations and researchers. Here are just some of them:
Corporate Leadership Council define Engagement as The extent to which employees commit to something or someone in their organization, how hard they work and how long they stay as a result of that commitment. The Gallup Organization argues that employee engagement is the involvement with and enthusiasm for work. When Hewitt Associates thinks engagement is the state of emotional and intellectual commitment to an organization or group producing behavior that will help fulfill an organization’s promises to customers – and improve business results. But all these definitions have a common base which is employee satisfaction with their work and ability and desire to go “the extra mile” and demonstrate outstanding on the job performance. Many things will be changing around and inside the organizations of the future but for the sake of sustainability employers will have to create a workplace where employees can build a personal and emotional relationship to the employer brand (J. Meister, K. Willyerd, “The 2020 workplace”, 2010).
Basic human nature has not changed Basic human nature has not changed in 1000’s of years and will remain in the future (R.J. Vance, SHRM Foundation, 2006):
We want to be better: There is a competitive drive to be more competent and more capable
We are social people: We are hard-wired to be part of a group
We are meaning-seeking people: We want to make a difference
Several sociologists who deal with generations and demographics researches suggest future generations particularly generations Y and Z will place greater importance on feedback, collaboration, self-fulfillment, meaningful contributions, skills advancement, respect, mentoring.
The future workplace engagement model (J. Meister, K. Willyerd, 2010) covers the key principles that the future workplace must embody. The essential component is values which would be aligned across the generations and strong brand that employees identify with. . Meister, K. Willyerd (2010) argue there are different areas that contribute to the engagement but the model demonstrates the most important once: recruiting, employee connection, learning and leadership. These practice areas would be realized by organizations based on key principles:
Collaboration: in the future external collaboration will grow exponentially
Authenticity: key component is transparency through social media
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