Preparing for the Future Workforce

Companies are becoming increasingly aware of the transformative influence that technology will have on the workforce over the next decade. According to a recent thought paper by PwC, the question is not about what technology will emerge, but rather how companies will leverage and integrate technology with human capital.

Future Trends of the Workforce

Companies are seriously considering how technological and social trends will affect the future workforce. Among the most influential trends are:

  1. Rapid technological developments – artificial intelligence and automation
  2. Changing demographics – aging world population
  3. Accelerated urbanization – rapid growth of cities
  4. Evolving global economic forces – disparities between developed and developing countries
  5. Climate change and resource scarcity – alternative energy and resource management

Technological Advancements

Artificial intelligence has already replaced many jobs previously performed by humans, including digital assistants and chatbots. Currently, artificial intelligence must often be accompanied by some sort of human intervention. For example, car ride-sharing businesses would not exist without the coders and programmers continually working behind the scenes. In the future, machines will be able to act on their own without humans. Examples of this include self-driving cars and auto-pilot planes.

Need for Human Capital

Although artificial intelligence and automation may replace some of the tasks traditionally performed by employees, there will still be a need for human capital. Instead of performing the tasks replaced by artificial intelligence or automation, employees will be expected to perform more important value-added tasks. The most anticipated skills for employees include adaptability, creativity, problem solving, leadership, emotional intelligence, empathy, and design.

Worlds of Work

The article describes four worlds of work based on the degree of collectivism versus individualism and integration versus fragmentation. It is expected that the future of business and technology will fall into one of these worlds:

  1. Red World – Fragmentation and individualism
  2. Blue World – Integration and individualism
  3. Green World – Integration and collectivism
  4. Yellow World – Fragmentation and collectivism

Red World

Innovation, agility, and speed would reign supreme in the Red World. Businesses would constantly develop new products and business models to keep up with rapidly evolving technology and competition. Projects will have to be completed quickly to prevent being left behind. Due to the rapid pace of change, companies would fight to own the rights to new products and services, which would likely become obsolete rather quickly. Companies would fight to hire contractors and employees with highly specialized skills and keep permanent, full-time employees to a minimum. The Red World would also exist in a high-risk environment where regulations would not keep up with the speed of technological development, creating uneven and sudden impacts for the business world.

Blue World

Capitalism would thrive in the Blue World because large companies with substantial influence would become more powerful than some nation states. Companies would be able to utilize their size and influence to dominate the market and prevent new market entrants from becoming too powerful. The lifeline of the Blue World would be a productive workforce consisting of employees with exceptional talent. In return for exceptional performance, companies would provide services such as children’s education, eldercare, and healthcare, some of which were previously provided by the government. In the Blue World, companies would also monitor their employees relentlessly, both inside and outside of the workplace, to ensure maximum productivity.

Green World

Social conscience would be the most influential component of the Green World. Employees would choose their employers based on their values and contributions to society, including environmental responsibility, diversity, human rights, and trust. Emphasis would be placed on developing technology and conducting business in a way that limits the need for travel in order to reduce negative environmental impacts. Employees would expect flexible hours and paid time off to give back to the community for activities such as volunteering. Conduct and ethics would be held to the highest standard and the risk of corruption resulting in a negative reputation would be among the greatest concerns for companies.

Yellow World

Fairness would be the foundation for the Yellow World. Employees would seek a distribution of wealth, resources, and rights that would require increased government intervention. From an employer, workers would expect flexible working hours, autonomy, and gratification. Technology would lower barriers to entry and allow for clear access to crowdfunding capital and the global market, allowing smaller companies to gain market share from large companies. Guilds, like those from the Middle Ages, would emerge and employees would feel more loyal to them than to employers. Guilds would defend, support, and provide training and other resources to its members. One of the largest risks to companies would be brand damage from a corrupt employee or a scandal. 

Summary

In summary, technological advances will rapidly change the workforce of the future. Companies need to embrace these advances and align them with the skills of its employees to gain leverage, otherwise, they will be left in the dust by companies who do. Regardless of whichever color “World” the future evolves into, it is clear that highly skilled employees will be in great demand. These employees will expect more flexible working hours, autonomy, and fulfilling work. Technology will not replace the need for employees, but rather transform the way in which they add value.

Link: PwC "Workforce of the Future"

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ERM Enterprise Risk Management Initiative 2020-01-24