How will we remember 2020? Will it be the year of acceleration – where trends we’ve been discussing for years finally became a reality, like flexible working, automation, or telemedicine? Or will it be the year we paused – a genuine watershed moment – in which companies reset their focus to redesign their purpose and rethink how to drive a more equitable and inclusive society?
Time will tell. Either way, one thing is true: transformation lies ahead. The World Economic Forum’s Future of Jobs Report talks about a period of “double-disruption”, stemming from the economic fallout of COVID-19 on industries and economies, and exacerbated by executives’ plans to accelerate automation agendas. The double-disruption is forcing organizations to redefine the size, shape and skill set needed to compete. It’s challenging institutions to rethink work settings and success metrics, and daring businesses to shed their previous identity in favor of a new north star.
Early results from Mercer’s 2021 Global Talent Trends Study reveal that while eyes are on reinvention, the reality of what’s occupying HR’s time is very much grounded in survival. HR leaders say they are still in the eye of the storm; struggling to move ahead given the enormity of an as-yet-unquantifiable change to their business and their workforce. The focus on returning to financial stability and returning workers to the worksite safely will certainly continue into 2021. But the year ahead will also be one of reinvention: a necessary part of survival for many, a chance to translate new learning into new beginnings for others.
A fundamental shake-up was already on the cards before COVID-19: Mercer’s 2020 Global Talent Trends Study revealed 98% of executives planned to redesign their organizations with a focus on making their structure and policies “more human”. The opportunity to reshape work has never been greater. As Harvard Business School’s Francesca Gino says, learning and curiosity will be a competitive advantage in this new world and there is a real opportunity to reflect, reset and reinvigorate. There are also calls to prepare for a new creative culture as AI and automation hollow out the middle of many industries. We all need to evolve. But with many paths ahead, and an unforgiving budget climate, we need to make smart choices about how best to reinvent. There are three things in particular we’ve learned:
Interestingly, these changes are influencing reinvention plans. Over the last few months, we’ve seen companies make strides in how they are reinventing for value, reinventing for flexibility, and reinventing for sustainability – each tackling different challenges and opportunities whilst in aggregate defining an new shape of work that acknowledges both an acceleration of trends and a reset of priorities.
What people value and how value is created is shifting. Changing consumer preferences have affected business models and organizations are now looking to design around value creation and are seeking ways to incentivize transformation towards these new and emerging business models. Take the convenience stores in South Korea offering e-bike charging services, or the UK’s Royal Mail starting to pick up (as well as deliver) parcels amid an ecommerce boom. At the same time, what employees value from their employer has changed dramatically. During the pandemic, employee health and wellbeing took center stage, and the talent value proposition needs to adjust to this new reality. This requires a rethink of what people value from their employer and a re-examination of the benefits that truly benefit them. The conversation is already moving from one of “employee costs” to the level of “employee investment” needed to attract, retain and ensure productivity. With transactional employment relationships evolving into more trust-based ecosystems, there is closer examination from both workers and employers on the return on value of various parts of the total reward proposition.
COVID-19 has tested our ability to flex how & where we work, to adjust capacity rapidly, and to accelerate digital transformation. It has proven the need to bake flexibility into our business models and people practices to ensure we can meet new realities and weather future shocks. Hearteningly, we’ve seen unprecedented collaboration in pursuit of this vision – such as the consortium of airline, hospitality and fast food companies in Sweden that designed training programs for laid-off staff to take up roles in healthcare and nursing homes. Leading companies are fusing together the best of the pre-COVID era (including personalization, global outreach and outcome-led actions) with new work and health models based on digital working and living. This necessitates rapid building of capabilities in digital tools, digital working and distributed collaboration skills. It also demands a move to a more flexible talent model that can deliver future skills at a price and pace that achieve transformation aims.
Companies and investors alike are taking collective responsibility for the futures of multiple stakeholders. Business sustainability through cost optimization, while critical, is not enough to design bright futures. There is an increasing focus on environmental, social and governance (ESG) factors – both risks and opportunities. Making this happen while contending with near-term priorities is tough. Yet, is has never been more critical to build new models of success that take into account broader outcomes for investors, shareholders, employees and customers. Starbucks’ decision to make diversity goals part of executives’ bonuses is one example of companies driving a more diverse agenda across their transformation plans and investment strategies. Companies are seeking to demonstrate their transformation and commitments to decarbonize - take recent pledges by companies such as GE and Germany’s RWE to go carbon-neutral; meanwhile businesses like Unilever are looking at how to translate their zero-impact pledge into job creation and displacement. Failing to take this opportunity to reset priorities with a broader societal agenda, or aligning value goals with actual behavior, will leave organizations behind in competing for investors and future talent.
Debates will continue about how the new world of work will ultimately shape up. Whatever the future has in store, we need a new mandate for work and our life at work. We’re entering a new chapter for which businesses simply don’t have a rule book to follow, nor the luxury of time to defer conversations about how to rise to the challenge. What we do know is that companies that galvanize around value, flexibility and sustainability in their reinvention plans will be first to capture the spirit of the new economic and social order being laid down.