Future of Work has already started and organizations need to decide: to speed up the preparation or remain within their realities and complain about the speed of the change. The challenges for the organization are coming from two at least sides: workforce of the future and impact of Industry 4.0 changes

Workforce of the future is diverse and shrinking

Until 2030, the European working population is expected to drop by 4% and consist of  four generations. Multigenerational workforce is not unique, but it is important to stress out, that the differences between the generations today are much wider than ever before, mainly due to the fast pace, digital environment. We are talking about the workforce with different and even conflicting approaches to life and work, or their reasons to bring the best of self to the organization. Brief zoom-in into the Generation Z, the ones entering the workforce, puts on the spotlight the generation that hold the highest standards for transparency, social and environmental impact and their own progression. Generation Z has many similarities with Millennials, nevertheless the difference are very high especially with other generations.

Are we ready for such a diversity in the workforce?

The jobs are changing

Industry 4.0 is transforming the jobs and more work activities will be transitioned to robots and machines. McKinsey institute predicts around 20% of the jobs will be lost and approximately the same number will be created. Jobs are not necessarily only lost and created. According to Gartner study, only 30% of current jobs are not expected to go through major transformation. 

To be responsive to the changes impacting the jobs, the workforce will require a different set of skills. McKinsey study summarize that the skills becoming more important are 

• Managing and developing people, 
• Applying expertise to decision making, planning and creative tasks; 
• Interfacing with stakeholders 
• Performing physical activities and operating machinery in unpredictable environments (managing the machine to overcome unpredictable environments).

The overriding question is not if the jobs will be changed or not, but how will the jobs look like in future and which skills will the workforce need to benefit from those changes.

Managing workforce for the future of work 

The future of work requires organizational flexibility to balance the shrinking and most diverse workforce and prepare them for rapid changes that impact their jobs.

Often HR professionals ask themselves, how to start and prepare the organization now for what is coming. In this article I offer 4 critical topics to, that will support preparing the organization and its individuals for the future of work. 

Those topics provide the answers to following questions:

1. How to identify the skills relevant for this organization that needs to be developed in the future?
2. How to build employee experiences that appreciated by diverse workforce?
3. What kind of L&D and Talent practices are fit for purpose to attract and retain talents?
4. How to help leaders manage those complexities?

Future of Work has already started and organizations are choosing how to commit to it. They can decide to speed up the preparation to remain successful and thrive. Or carry on within their realities and keep complaining ‘how difficult is to attract and retain talents these days’. It is an individual decision to choose which role we want to play in our lives, the roles of a player or the one who actively seeks opportunities and develops. Or the role of a victim, the ones who complain and expect others to change.

Intention of this article is to provide a reasoning why changes in the next few years are providing enormous opportunities for us; Human Resources professionals and organizations itself as flexible humancentric system. 

The diversity of the workforce

Until 2030, the European working population is expected to drop by 4%. Many organizations have already experienced difficulties in attracting and retaining talents despite the high investments and success of Employer branding campaigns or Talent strategies. When talent is about to leave, the common habit of ‘finger pointing’ often ends up in increasing tensions and accusations within the organization, with the HR department as ‘usual suspect’.

The workforce of the future is not only shrinking but composed of several generations.

This is not a unique situation; rather usual. But it is important to stress out, that the differences between the generations today are much wider than ever before, mainly due to the fast pace, digital environment. We are talking about the workforce with different and even conflicting approaches to life and work, or their reasons to bring the best of self to the organization. 

By 2030, 70% of the workforce will consist of three main groups: Baby boomers who are getting closer to retirement age, Generation X in the middle of their careers and Millennials. When digitally natives’ Millennials entered the workforce, it was perceived as a disruption to the leadership practices. The same were, being honest to ourselves, developed probably in the time Millennials were born. Regardless of the pressure of new ways of working, many of the practices still remained the same with some ‘cosmetic adjustments’. 

Today, Generation Z are starting professional lives and forming the 4th workforce’s group with the share of approx. 30%. They are by themselves the most diverse and most educated workforce ever. They hold the highest standards for transparency, social and environmental impact and their own progression. In contrast to Millennials who are more tolerant than Generation Z, the later are more independent and less resilient.

Surprisingly they prefer face-to-face over digital interactions and expect the leader to be fully present and attentive to their needs, ideas, struggles, developmental objectives and career goals. 

Are we ready for such a diversity in the workforce? If the diversity of the shrinking workforce would be the only challenge we needed to manage, a straightforward solution would already be in place. 

But there is more at stake.

The job is changing

Industry 4.0 is transforming the jobs and additional work activities will be transitioned to robots and machines. This change automatically creates a concern: ‘humans will be replaced by robots’.

As it happened in previous industrial revolutions (and confirmed in recent studies) there will be jobs that are lost but also jobs that are created, even though robots will take over some of them. 

McKinsey institute predicts around 20% of the jobs will be lost and approximately the same number will be created. Jobs are not necessarily only lost and created. According to Gartner study, only 30% of current jobs are not expected to go through major transformation. 

To be responsive to the changes impacting the jobs, the workforce will require a different set of skills. McKinsey study summarize that the skills becoming more important are 

• Managing and developing people, 
• Applying expertise to decision making, planning and creative tasks; 
• Interfacing with stakeholders 
• Performing physical activities and operating machinery in unpredictable environments (managing the machine to overcome unpredictable environments).

The overriding question is not if the jobs will be changed or not, but how will the jobs look like in future and which skills will the workforce need to benefit from those changes.

The McKinsey study continues with captivating findings on what could be the future of the financial managers’ job. According to the estimation, there is an automation potential for that role by 2030 in the areas of execution, reporting and monitoring, as well in client acquisitions, information gathering and similar. In the best-case scenario after successfully implementing automation of mentioned tasks, our financial manager might have up to 50% of their time available for other activities. The prediction is that those activities will be coaching and mentoring, improving organizational performance management, focus on long-term financial strategies, deepening stakeholders’ relationships across the organization. 

Looking from the lenses of the organization, the priority is to assess the changes in the jobs and upgrade the skills required for the jobs of the future. 

Managing workforce for the future of work 

The future of work requires organizational flexibility to balance the shrinking and most diverse workforce and prepare them for rapid changes that impact their jobs. Organizations can build required attitude by targeted interventions on systemic, team and individual level; having in mind that flexibility and continuous change is the only constant. 

Often HR professionals ask themselves, how to start and prepare the organization now for what is coming. In this article I offer 4 critical topics to implement or adjust, in order to prepare the organization and its individuals for the future of work.

Strategic People Plan

Assessing the evolution of the roles and skills required in the next few years is a crucial starting point for Human Resources (or People and Culture) organizations that aim to connect their activities with the business priorities. 

Various data collected externally will create a momentum to change and provide directions but relevant insights are also within the organization. We cannot underestimate the impact of involving leaders and mindset shifts in preparing the organization to be more adaptable for the future. Ask your leader questions like: How should the ideal organization to deliver the business challenges look like? Or how will the future of work impact the roles in your team? Which skills do you need in your team that currently you do not have? 

Quality outcomes are possible only when the discussions are elevated from ‘cosmetic changes’. This exercise creates space for HR professionals to step up into the game as critical business partners, armed with relevant external and internal data, and moderate discussion with strong partnering skills toward quality outcomes. It requires first of all, the HR professional to upskill their approach and talk about business impact and not ‘our beloved HR processes’. 

The Strategic People Plan aims to close the gap between current and required level of skills, needed for the roles of the future. 

Many of the organizations are not aware of the current workforce’s capabilities and possibilities to be developed. Not only that, but although developing people is usually proclaimed as a priority, in reality it has questionable outcomes and impact. We can easily conclude, in general leaders are lacking people development skills.

To close the skills gap without overly depending on the talent acquisitions (or ‘buying skills’), organizations need to excel in building skills within their existing workforce. Although the primary task of Strategic People plan is to close the skill gap, there are other expected benefits. This approach will create positive impact on retention and engagement, and lower the recruitment dependencies that usually bring along hidden and unplanned costs (eg resignation short after employment). And not only that. Targeted and planned up- and re-skilling of the workforce is a straightforward path to increase the participation of the women in overall workforce and especially leaders’ population.

The plan to close the gap needs to reflect the diverse approach to careers and learning and avoid only standardize solutions.

Customized employees’ experience

‘One size fit all’ models are perceived as ‘pre-historic’ as the diverse workforce is calling in from their homes, offices, shared co-working spaces or even coffee shops. The organization that is able to adopt the approach to contrasting needs of their workforce, and generates the sense of care for each person, creates an outstanding experience for their employees. Those ones are touching hearts (emotional connectivity), heads (curiosity, needed information) and hands (useful practices) of the whole workforce.  

One of the secure tickets to ensure meaningful experience is transforming the employee from passive receiver into active co-designers within given framework. In other words, one example is ‘the employee designs its own onboarding program depending on the personal preferences’. Or another one ‘the employee has an option to choose caregivers’ benefit plan that smartly reflects the current needs of shrinking workforce’. Organizations should not close the eyes to the estimation that longer life expectance and increase in certain diseases, increases pressure for the workforce population as caregivers to elderly family members. 

Creating meaningful experiences to diverse workforce is not an easy task for leaders and opens up a question: ‘what to focus on?’. One of the impactful experiences employees has with the company is the scope and activities of the job itself. Or ‘what is in it for me’.

Wouldn’t you be ready for an extra mile if your job was crafted to suit your strengths and enable your further development? Even if someone may say that it is difficult to craft the current jobs, the changes in the roles that are foreseen (eg post delegating the tasks to the ‘machines’), opens up possibilities to prepare (up- or re-skill) for the activities that will replace the outsourced ones.

The decline of exclusive Talent management

While managing diverse and shrinking population and changing roles in the future is a fact, remaining with the exclusive talent management is a recipe to continuously battle in the war for talents. 

Let me describe one real case. Recently a big international organization rejected a candidate because the CV was lacking the same job title as they are looking for. To make it even more awkward, the organization was looking for interim manager because they are facing severe issues attracting experienced candidates. Organization decided not to interview our candidate, nor to deep dive into candidate’s experience to explore the potential fit with their business needs. What company did was following:  made an estimation that job title in another organization equals to the experience they need. The final irony is that the candidate was doing exactly the same job but it was called differently with the previous employer.

When the company focuses to ‘buy’ needed talent and prescribes long list of ‘critical and must-have experiences’, they are entering into a self-inflicted talent scarcity. They depend on the other organizations to develop the talents they need. Hiring managers often remain trapped in inflating the skills and requirements they are looking for, instead of equally relaying on the targeted internal development interventions. 

What if the organization would deliberately recruit the talent that is willing to learn and adapt, even if missing some of the experiences or skills? So called ‘Hidden talent pools’ are leading to higher number of candidates that exclusive or traditional talent management would not consider as suitable. They consist of people with different yet very valid experiences, like talents missing University degree but having College degree instead and positive attitude toward upskilling. Hidden talent pools might also be: women for traditionally men jobs, people with disabilities or post addiction recoveries, candidates 55+, candidates after a career break and many others. 

The changes that Industry 4.0 will bring to the jobs, allows even more diversity within the workforce. The skills becoming more important in the future are not limited to exclusivity of traditional talent acquisition targets. The main challenge is the comfort zone and mindset of ‘the way we do things here’. 

Organizations that desire sustainability and high performance are counting on ‘creating’ talents through their upskilling and reskilling initiatives. Change of perspective and approach, enlarges the pool of potential candidates for different jobs and mobilizes the organization in developing talents. Regardless of generations, one of the main reason people leave is lack of developmental and career opportunities. 

The idea of democratized learning and inclusive talent management places the employee in the center of the initiatives and enables personal ownership for individual development and careers. Not less important to voice out, is that reducing the impact of traditional and exclusive talent management has a strong social component, on top of obvious business benefits in managing the diverse and shrinking workforce of the future. 

If we want to further challenge ourselves, how does the Talent ecosystem formed between your organization and your customers sounds like? The ecosystem in which individuals’ development and its impact on both organizations, wins over the organizational defensiveness? 

Transform leaders’ skills for the future of work

The diverse workforce requires inclusive work place, starting from the location where the work is done, up to leadership practices. Leaders are expected to be capable to lead their teams and adopt the jobs to welcome the diversity. Diversity is given, inclusion is a choice and commitment.

Leaders need to learn how to inspire diverse workforce, how to include, how to create a meaning. They need to ask and coach while focused on the outcomes rather than give rigid instructions. The online reality showed us that focus on the outcomes ensure that virtual worker delivers higher-quality work and it impacts their engagement level.

We need leaders sensitive and aware of complex environment we live in, and its impact on the mental health. Half of the millennials and 75% of Gen Z respondents have experience leaving the job both voluntarily and involuntarily, partially due to mental health reason. The  current environment is very stressful for Millennials and Gen Z. Especially the last ones are struggling more than other generations in being able to bring new ideas to the table, speaking up during conference call/meeting, feeling engaged or excited about the work.

If leaders remain leading with leadership skills’ that are dominated by micromanaging, bias decisions, ignoring inclusion, and strong control mechanisms, organizations are failing to prepare their leader to engage and mobilize the workforce of today and even less of tomorrow.

The leaders’ upskilling is fundamental to prepare the organization for flexibility required by diverse and shrinking workforce combined with the changes expected in the future jobs. The key for successful change is an organizational and leaders’ skill in infusing flexibility in everything we do.