Five Trends Changing the Nature of Work
The world is changing again – and it is simultaneously driving several trends changing the nature of work, our workforce, and our economy. These five trends are:
- The increasing (exponential) speed of industry convergence
- The shift toward more independent and contingent workforces
- The exit of baby boomers and entrance of Gen Z into the labor market
- The shift toward human-centered work design driven by Industry 4.0 automation, and
- A push toward remote and flexible work coming from globalization (and global pandemics)
Taken together, these trends speak to a working environment quite different from any time in our past, and one which only some companies are preparing themselves for today.
The NEW Normal – Virtual Work in the aftermath of COVID-19
The long-term impact of the coronavirus epidemic is still being written. It has impacted business, individuals, and society more broadly than many first imagined. While governments and corporations settle on the challenges of restarting supply chains, work-from-home policies, the great resignation, and preparing for future business continuity challenges, talent organizations find themselves leading the charge into an uncertain world. [i]
The four enduring challenges left by COVID-19:
- Work-From-Home or Return-To-Office (or Hybrid)? – The accelerated use of virtual work and virtual learning is perhaps the most apparent impact of the coronavirus epidemic. A Feb 2021 McKinsey report estimated “four to five times more remote work than before the pandemic.” While a 2022 Gartner study reported that “nearly half of employees will work remotely at least some of the time.” [ii] An April 2021 McKinsey survey found “a mere 10%” of executives who “expected employees to spend more than 80 percent of their time in the physical office” while “29 percent of employees would consider switching employers if their company went back to a fully on-site model.” [iii]
With mass vaccinations and infection rates declining, companies’ responses to return-to-office policies have varied. Some, like PwC and Deloitte[iv], have stuck with virtual work as the norm. Others, like Tesla, Yahoo, and others,[v] have struggled with their return-to-office policies. One thing is sure – virtual work and virtual learning are here to stay.
- The “Great Resignation” – The term for the mass voluntary exit of employees from their jobs which began in early 2021.[vi] Nobody is entirely sure of the cause of the great resignation, and many factors have been hypothesized as contributing. One clear outcome is that prospective employees are demanding more from prospective employers.
- Global Supply Chains Struggle to Re-start – The return of consumer demand for products is both uncertain and uneven. [vii] Many businesses have not ramped up to the same levels as before – either due to a lingering recovery, an excess of caution, or the inability to restart global supply chains.[viii] Pressure on supply chains has caused global shortages and delays – putting pressure on prices and resources.[ix] While some seek methods to flatten or better predict volatility, others take the opportunity to rethink their supply chain strategies and processes to better prepare for future challenges.
- Business Continuity Planning – Businesses that did not before are investing in pandemic planning in case of future outbreaks. For some, this includes accelerating or reimaging the future of work. This could impact operations that trade economies of scale for organizational agility and resilience. For some, it will accelerate digitization and reskilling efforts. For others, it may lead to a fundamental rethinking of how work is organized and executed.
In general, COVID-19 has accelerated many of the trends outlined in this paper, including leveraging disruptive technologies, contingent workforces, global virtual teams, and longer-term workforce planning. It turbo-charged the need for business and talent solutions that are agile, fast, and effective.
- The rise in virtual work from home has driven the continued growth of virtual work platforms and LXPs through the pandemic. [x]
- COVID has made several trends related to younger generations and alternate workforce ecosystems even more salient, including a) Being a Great Place to Develop a Career, b) Alternate Career Paths, c) Passion Architects, and d) Learning Experience Designers.
- The pandemic highlighted the need for business agility and longer-term contingency planning, reinforcing the need to build long-term resilience into workforce models, as supported by a) Talent/Opportunity Marketplaces, b) Skills-based Organizations, and c) Flexible Work Ecosystems.
- Supply chain issues amidst the great resignation have stretched supply chain organizations to the limit. Supply chains are incredibly complex with a specialized knowledge base. The need for resources possessing this specialized knowledge made talent shortages all the harder to fill. Many have tapped into contingent and alternate workforces for support, heightening the need for quick and effective onboarding programs.
But the legacy of the COVID-19 pandemic has accelerated two other talent trends we have not discussed yet.
As stay-at-home orders raced worldwide, learning teams everywhere scrambled to virtualize their learning curriculums. Some lucky firms had already virtualized or digitized much of their learning. Still, many others rapidly worked on porting their classroom training to Zoom, Skype, MS Teams, Saba Meeting, or whatever virtual meeting software their company used. Consultants helped. Though painful, most organizations worked through it and learned important lessons along the way. A few challenges remain now that the immediate need has passed.
- Virtualization/Digitization Strategy – Establishing a firm-wide approach to determine and prioritize what learning needs are best suited to which kind of learning solutions and modalities.
- Team-based Virtual Cohorts – Conducting learning sessions virtually and arranging curated collections of digital assets was step one. The next challenge is designing a pathway or syllabus of learning activities (live, virtual, and digital) with a cohort of virtual learners over time.
- Virtual Learning Communities of Passion – Getting the most of online knowledge management and social media platforms to create an authentic culture of learning, community, engagement, and belonging among professionals with a common interest or inspired to solve a common problem.
Re-Architecting the Future of Work: The Role of HR in a Post-COVID World
In November 2020, a McKinsey article observed, “In the COVID-19 era, chief HR officers (CHROs) are playing a central role in how companies reimagine personnel practices to build organizational resilience and drive value.” [xi] A similarly timed article from PwC reinforced this observation, “It is vital that HR evolves and transforms across every element of the HR lifecycle to meet a new set of organizational needs. Simply put, HR will need to increasingly find ways to support business leaders in restructuring during and after the pandemic.” [xii]
But what was initially seen as a need for HR to restructure its own processes and practices evolved into something more, a need for HR to lead the reimaging of work across all business functions. “While the nature and purpose of the HR function have been evolving for years, the demands of the pandemic dramatically accelerated this transition…. Stepping up to this new responsibility requires HR to transform itself, adopting the organizational principles and key performance indicators of core business functions. HR leaders need to drive more agile and fluid organizations, shift the role of business partners, and drive the employee experience—and do it all with a clear leadership mandate.” [xiii]
The pandemic had thrust HR leaders into the forefront. They had already evolved to having a seat at the table but often were still seen as having a supporting role. Suddenly, the future of many organizations rested on HR’s ability to lead them through the crisis. “The COVID-19 pandemic has rapidly made people the number one priority in nearly every organization around the world. As a result, HR leaders are now at the forefront of reshaping the way work gets done. This has created a new opportunity for the HR function to switch from firefighting immediate pressures to strategically engineering a successful future.” [xiv]
Now, flush with the confidence of their leadership teams, HR is poised to lead their organizations into the Future of Work. “As a result of HR’s handling of COVID-19’s challenges, both business and HR leaders have become more confident in HR’s ability to help organizations navigate future changes… the proportion that were “not confident” in HR dropped dramatically from 26% in 2019 to 12% in 2020.” Allowing CHROs “to reorient its mission and mindset towards shaping future success by taking the lead in rearchitecting work and reimagining the workforce.” [xv]
[i] Susan Lund, Anu Madgavkar, James Manyika, Sven Smit, Kweilin Ellingrud, and Olivia Robinson. “The future of work after COVID-19” Feb 18, 2021. McKinsey Report The future of work after COVID-19 | McKinsey
[ii] Gartner for HR. “Future of Work Trends Post COVID-19: Long Term Impact and Actions for HR” Gartner. 2022. Top 5 Trends for HR Leaders in 2022 | Gartner Susan Lund, Anu Madgavkar, James Manyika, Sven Smit, Kweilin Ellingrud, and Olivia Robinson. “The future of work after COVID-19” Feb 18, 2021. McKinsey Report The future of work after COVID-19 | McKinsey
[iii] Sandra Scharf, Kirsten Weerda “How to lead in a hybrid environment” June 27, 2022. McKinsey Organization Blog. How to lead in a hybrid environment | McKinsey & Company. Andrea Alexander, Aaron De Smet, Meredith Langstaff, and Dan Ravid. “What employees are saying about the future of remote work” April 1, 2021. McKinsey.com What employees are saying about the future of remote work | McKinsey (April Survey)
[iv] Jessica DiNapoli. “PwC offers U.S. employees full-time remote work” Sept. 30, 2021 Reuter’s EXCLUSIVE PwC offers U.S. employees full-time remote work | Reuters “Deloitte gives its 20,000 people the choice of when and where they work” June 18, 2021. Deloitte Press Release. Deloitte gives its 20,000 people the choice of when and where they work | Deloitte UK. Ishika Yadav. “PwC, KPMG, Deloitte are offering permanent work from home” Techgig.com Cot 6, 2021. PwC, KPMG, Deloitte are offering permanent work from home | TechGig
[v] Theo Wayt. “Elon Musk orders Tesla staff to return to office full time — or find a new job” June 1, 2022. New York Post. Elon Musk: Tesla staff must return to office full time or leave (nypost.com); Anne D’Innocenzio. “Companies rethink return-to-office plans amid omicron cases” Dec 10, 2021. AP (reported in YahooNews) Companies rethink return-to-office plans amid omicron cases (yahoo.com);
[vi] EdSmart. The Great Resignation 2021 & 2022 Statistics (edsmart.org); Morgan Smith. “Professor who predicted ‘The Great Resignation’ shares the 3 trends that will dominate work in 2022” Jan 14, 2022. CNBC.com. Work. ‘The Great Resignation’ expert shares the biggest work trends of 2022 (cnbc.com); Arianne Cohen “How to Quit Your Job in the Great Post-Pandemic Resignation Boom” Bloomberg. Businessweek. May 10, 2021. Quit Your Job: How to Resign After Covid Pandemic – Bloomberg
[vii] Jaana Remes, James Manyika, Sven Smit, Sajal Kohli, Victor Fabius, Sundiatu Dixon-Fyle, and Anton Nakaliuzhnyi. “The consumer demand recovery and lasting effects of COVID-19” March 17, 2021. McKinsey Report.
[viii] Mattia Hedwall. “The ongoing impact of COVID-19 on global supply chains” June 22, 2020. World Economic Forum. The ongoing impact of COVID-19 on global supply chains | World Economic Forum; Ghazi M. Magableh. Supply Chains and the COVID‐19 Pandemic: A Comprehensive Framework” Feb 8, 2021. National Library of Medicine. Supply Chains and the COVID‐19 Pandemic: A Comprehensive Framework – PMC (nih.gov)
[ix] Susan Helper and Evan Soltas. “Why the Pandemic Has Disrupted Supply Chains” June 17, 2021.The White House. COUNCIL OF ECONOMIC ADVISERS Why the Pandemic Has Disrupted Supply Chains | The White House
[x] Global Newswire: Facts & figures. Global Learning Experience Platform (LXP) Market Projected (globenewswire.com), May 5, 2021, Training Industry. 2021 Top Learning Experience Platform (LXP) Companies – Training Industry. July 29, 2021
[xi] Bryan Hancock, Bill Schaninger “Strategic talent management for the post-pandemic world” Nov 9, 2020. McKinsey Organization Blog. Strategic talent management for the post-pandemic world | McKinsey & Co
[xii] Randa Bahsoun, Khaled Bin Braik, Boudy Kassis, Ahmed Khairat. “How the new normal is shaping the future of HR” 2020. PwC.com how-the-new-normal-shaping-future-hr.pdf (pwc.com)
[xiii] Laura Blumenfeld, Neel Gandhi, Asmus Komm, and Florian Pollner. “Reimagining HR: Insights from people leaders” March 1, 2022. McKinsey.com Article. Reimagining HR: Insights from people leaders | McKinsey
[xiv] Robert Bolton, Miriam Hernandez-Kakol, Darren Cornish, Roberto Di Bernardini, Arturo Gonzalo Aizpiri, Kara MacKillop. “The Future of HR in the New Reality: It’s time to start playing the long game” KPMG. October 2020. The Future of HR in the New Reality (assets.kpmg)
[xv] E. Volini, J. Schwartz, K. Eaton, D. Mallon, Y. Van Durme, M. Hauptmann, R. Scott, S. Poynton, N. Scobie-Williams. 2021 Deloitte Human Capital Trends: The social enterprise in a world disrupted: Leading the shift from survive to thrive. S. Costanzo, F. Feroz for “A memo to HR Accelerating the shift to re-architecting work” p. 35 Deloitte Insights. 2021
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