By now, it seems quite ironic to be talking about the Future of Work. Prior to 2020, businesses started seeing trends emerging that would impact the workplace; however only the most forward-thinking organisations started actively preparing for this future. For most, it still seemed too vague and still too far away to dedicate significant resources to adapt their organisation for the Future of Work.
Suddenly, the Future World of Work has become the Current World of Work. No longer are organisations talking about the changing workforce dynamics as some abstract future possibility. Currently, everyone is urgently trying to adapt to the current reality that few were equipped to manage successfully. It would seem that the current pandemic has accelerated the evolution towards the Future of Work.
In this article, we will discuss four overarching trends we are seeing that will have (and is already having) an impact on Human Resource Departments. Understanding these trends are of vital importance since HR has to take the leading role in guiding their organizations towards embracing the new World of Work.
The current VUCA (volatile, uncertain, complex and ambiguous) environment demands constant innovation and change, and this is no different for HR. The HR industry is undergoing major innovative change. With these changes, HR departments will have an enormous impact on business strategy.
Trend 1 – Artificial Intelligence (AI) will become mainstream
It is almost superfluous to even mention the impact of artificial intelligence on the Future of Work. The proliferation of artificial intelligence in the workplace has ushered the start of the 4th Industrial Revolution (4IR) which by now is an accepted fact.
The actual impact of AI in the workplace will happen in three overlapping waves, according to a PwC study. Understanding these three waves is critical for the HR function, as they will impact the workplace significantly and subsequently impact the HR function too.
First wave: Algorithms (maturing early 2020s).
This wave refers to the automation of simple computational tasks and the analysis of structured data. This wave has hit businesses a few years ago already and is already well under way. In HR, this has come in the form of simple process automation (e.g. Employee Self-Service) which is now very common – even expected – in most HRIS platforms. While the use of algorithms has been used in other business divisions, HR has been lagging in adopting advanced analytics.
Second wave: Augmentation (maturing Late 2020s).
This wave represents when simple machine learning is employed to automate repetitive tasks such as filling out forms and communication (e.g. chatbots) and the ability to analyse unstructured data in semi-controlled environments, such as robots in warehouses or drones. This wave will reach maturity in the next decade and allow businesses to totally outsource certain activities to autonomous machines. As the HR function is very administrative and works with structured and unstructured data in a semi-controlled environment, this wave will cause huge disruptions for the HR function in the coming years. Many HR administrative processes will become completely digitized and automated while HR Chatbots will take over low level employee queries in the next three to five years. This wave will have a disproportionate impact on lower level HR positions.
Third wave: Autonomy (maturing 2030s).
Deep Machine Learning and other AI breakthroughs are causing technology to automate physical work (think humanoid robots), as well as solve dynamic real-world problems where rapid response is required (e.g. driverless vehicles). Although this wave is not expected to have a severe impact in the workplace in the next decade, companies need to prepare for its disruptive capabilities. By the time this wave reaches maturity, the 4th Industrial Revolution will have completed its total disruption of the workforce. It is expected that most HR processes will be automated by this time and that machines will have taken over all HR tasks not requiring human “soft skills”.
Trend 2 - HR needs to prepare for the new blended workforce
It is quite clear that the time of managing a large permanent workforce complemented by a small number of temporary workers is a thing of the past. While understanding that a mainly permanent workforce is evolving into a workforce containing permanent and temporary workers, contractors and freelancers (Gig economy) is not new, the pandemic has hastened to move to remote work (work from home). This is an additional complexity added to the already blended workforce.
Another factor entering the blended workforce mix is autonomous machines (robots). The blended workforce of the future will be permanent, temporary, contract and gig workers, many of them not working at the same office (or even same time-zone), all working side-by-side with robots – even if these robots are nothing more than AI driven software. As the use of autonomous machines in companies continues to proliferate, it has become clear that human-machine collaboration is part of the future workforce. Teams comprising of humans and robots will outperform teams comprising either humans or robots only. Therefore, knowing how to work with a robot will become one of the most critical aspects of the Future of Work.
Trend 3 - Skills, not education, will drive organisational competitiveness
Skills Development and Training is entering a period of fundamental disruption. The two main drivers behind this disruption are the kind of new skills in demand and learning-on-demand.
The skills that are in high demand are not necessarily the skills developed through formal education. President and CEO of IBM Ginni Rometty, coined the term “new-collar” jobs, referring to positions that require specific skills, not a bachelor's degree that are in high demand today. This is disrupting the Skills Development value chain, where traditional centres of higher education are struggling to develop formal courses to meet these new skills demands.
Due to the fast-changing environment, companies and individuals require learning-on-demand that provide skills immediately when they are needed. This, together with advancements in Training Technology, has borne online universities such as Udemy and LinkedIn Learning that provide very specific skills training in real-time. Companies no longer have the luxury to wait for four years to acquire the skills they need from formal education centres such as Universities – especially if some of the skills learned can become obsolete within those four years.
These two main drivers feed off of each other: Demand for new skills (new collar jobs) force companies and individuals to obtain these skills outside of formal training providers which increases the demand for online universities. On the other hand, online universities can produce training content in a very short time, allowing them to stay relevant to organisations’ new skills needs (new collar jobs).
Human Resource Departments are adapting to this trend by changing the way they attain, develop and retain talent.
Recruitment:
More companies are moving away from strict requirements for bachelor’s degrees when hiring talent by moving towards skills-based hiring – setting specific skills and competency requirements for a position rather than only considering a candidate's credentials. It has already been seen at Apple, Google, Bank of America and Nordstrom where they consider and hire candidates without a degree being a requirement. Additionally, companies are expanding their recruiting channels to include hiring events such as hackathons, boot camps, apprenticeships and partnerships with community-based organisations (e.g. Harambee) to close local skills gaps.
Skills Development:
Formal training solutions are expensive, time consuming and generally reserved for a select few individuals. Companies are finding that this approach is not effective due to the changing demographics of the workforce where Millennials and Gen Z now make up a majority of the workforce. These generations generally refer to online sources of content like YouTube when they want to learn something new. Therefore, companies are democratizing skills development by providing all employees equal access to their own internal growing library of online training content that are complemented by external online libraries such as Udemy or LinkedIn Learning. Corporate training will be just-in-time focused, providing training on-demand where and when needed.
Lastly, as artificial intelligence keeps proliferating the workplace, the skills profile required from individuals will change. Organisations have become used to demanding a ‘T-Shaped’ skills profile from employees, which represents a combination of both deep subject expertise with well-honed business skills to collaborate across disciplines. We believe the Future of Work will demand a square shaped skills profile. Employees will still need deep subject knowledge and broad cross functional business skills; however, as more tasks are taken over by AI in the workplace there will be an increased need for human-specific skills, such as critical thinking, change management, creativity, team work, communication, ethics and cultural sensitivity. Additionally, as all employees work with technology (including autonomous machines) and data, individuals will need a broad skillset on Technology and Data Analytics. It is already evident that access to data is being democratized, requiring everyone in the organisation, not just the data scientists, to have well developed data analytics skills. These skills will determine employability for future roles, even more than formal education.
Trend 4 - HR becoming more strategic and people focused rather than process focused
Historically, HR has been a bureaucratic function, especially in South Africa, as it tends to be highly regulated and process driven. Naturally, individuals who were adapt at following rules, regulations and processes tended to flourish in the profession. Soft skills and people skills were important; however, the focus was more on administrating people processes.
The Future of Work is driving HR Departments to focus more on people and less on the processes for two main reasons:
Technology will automate processes:
As already seen in discussing the previous three trends, the automation of HR processes and the requirement of a square shaped skills profile will compel HR Departments to focus on people, or risk becoming irrelevant and obsolete.
The disruptive impact of 4IR has made employee wellbeing a fundamental business focus:
Michael Fenlon, Chief People Officer at PwC, said that “worker wellbeing is impacted by several macro trends such as the growth of the digital economy and the increased need to develop resilience”, and this was prior to COVID-19. Employee productivity is now directly related to the ability to create a workplace that respects the humanity of the worker. Additionally, employees are developing a minimum expectation for the type of experiences they want in the workplace. Therefore, to retain scarce skills, companies are expected to have an “employee as customer” mind-set by re-imagining all aspects of work, including physical, digital, social and cultural. This is best summarized by Diane Gherson, CHRO of IBM: “Our job in HR is to create that connected, transparent, mobile, personalized, searchable and 24x7 universe through our workplace and our tools.”
The focus on people is triggering a strategic revolution, whereby HR is at last being recognized as a strategic partner by the rest of the business. As custodians of the most important asset behind sustainable business growth (People), Human Resource professionals are now expected to provide strategic insight into attracting, retaining, engaging and developing people as it relates to the business strategy.
