The TMT sector faces a wide range of risks made more challenging by the global pandemic, accelerated digital transformation, geopolitical uncertainty and other factors. These risks comprise five megatrends, as noted in our TMT Futures Report 2021, are:
While these megatrends overlap, global talent and skills typically form the most common denominator. The quality and skills of employees are invariably business success factors. But ill-skilled, unmotivated, or badly deployed talent is equally likely to stall progress and create potentially enterprise-threatening exposures.
This report examines the corporate practices shaping the workforce of the future, identifies priorities for the global talent race, and examines people-related rewards, protection, and benefits.
While there is no industrywide model for the workforce of the future, we can make certain projections: it will be increasingly digitally enabled, systematic employee reskilling will become routine, and artificial intelligence (AI) will become an embedded technology across many of the core business processes as companies embrace it to augment, but not replace, human workers.
The COVID-19 pandemic accelerated certain pre-existing trends, notably digital transformation and new ways of working. The latter is, in many ways, more problematic. If digital transformation had an inevitable feel to it, the world was less prepared for a pandemic that forced many employees to work from isolated, remote locations to serve customers whose buying patterns also were disrupted.
Many forward-thinking organizations are now viewing their operations, programs, and policies for returning to work through an additional lens of whether and how to leverage remote or hybrid working. Our current environment represents a unique, universal moment to rethink how work gets done, how jobs have changed and will change in the coming years, and to consider the upskilling and reskilling pathways needed for a new model to be successful (see also the WTW article, Building a flexible workplace for the future).
The Mack Institute’s CIP team cites, as an example, IBM’s experience with a hybrid model, which was in place well before the pandemic. Having allowed many employees to work from home, the company found some workers resisted returning to the office as part of a company effort in 2017 to build agility and encourage innovation. With the pandemic, however, IBM expanded its hybrid model, and its own survey concluded the hybrid model should become a permanent fixture. Indeed, the company subsequently developed services for companies seeking to leverage the hybrid model.
Another example, and in contrast: Zapier is a much smaller company established in 2011 with a fully remote workforce. The web-based task automation company claims the distributed workforce model enables access to a larger talent pool and lowers real estate costs, among other advantages. Based on WTW’s in-house research, it is clear to us that building and preserving a viable company culture in a remote working environment has its challenges.
Employee reskilling will become a vital feature in managing the workforce of the future. Driven by the global digital talent shortage, reskilling is being used by many companies to expand the talent base, sometimes by training non-technical employees to take on digital jobs if they show the interest and aptitude. Successful reskilling approaches use a combination of online and collaborative training supported by active manager mentoring and coaching, especially in a hybrid world.
As noted in WTW-sponsored report, The Future Chief People Officer, organizations risk productivity losses if they ignore the imperative to reskill. The report cites the World Economic Forum’s (WEF) Future of Jobs report which concluded 75 million jobs are expected to be displaced by 2022, with as many as 133 million new roles created. WEF also estimates on average 42% of the skills required to perform a job will have shifted between 2018 and the end of 2022.
Chief people officers (CPOs) are the top-level management executive in charge of an organization’s workforce and will have their hands full with the heightened urgency to get the people equation right. They must increasingly see themselves as having an essential role in enterprise efforts to achieve strategic business goals while continuing to meet administrative and operational workforce needs.
“The CPO – and the entire HR staff, for that matter – must abandon legacy mindsets and practices that constrain the function’s performance and effectiveness,” said Gaby Joyner, WTW’s Europe Head of Employee Experience “There must be a commitment on the part of HR leaders to ensure that the business maintains its competitive advantage. This also requires the same commitment from their C-suite peers, the CEO and the board to transform HR and radically reset expectations for the CPO role.”
Our CPO survey, conducted with the SHRM Executive Network, found near universal agreement CPOs will come to need different skill sets and experiences. Our findings show 94% of all senior business leaders — including CPOs (95%), CEOs (93%), members of the board of directors (92%) and other C-suite members (94%) — believe it is important to explore accelerating the growth and development of future HR executives.
In particular, our survey shows CPOs need to invest in further development of three key areas to meet the challenges of the new world of work:
However, only about a third (35%) of participants believe future CPOs are getting the development they will need.
The mingling of reskilling with digital acumen and data science is already widespread, as more companies apply technological solutions to HR objectives. Hitch (a partner in our digital ecosystem), for example, with its Software as a Service-based internal mobility platform, helps companies identify skill gaps as well as existing but hitherto unknown or underutilized employee skills. This is a win-win in helping the company grow invaluable talent while creating exciting career options.
AI is taking a more prominent seat at the business table, especially when it is deployed to supplement or enable employees and is not seen as a threat to jobs. AI also is proving valuable in supporting company efforts to become more diverse and inclusive.
Predictive analytics and insights can fuel proactive actions in a range of talent areas. For example, using a combination of machine-learning algorithms and decision trees, it’s possible to develop statistical models that rank employees based on their flight risk and identify the factors contributing to their risk, such as pay, benefit options, flexible working, and learning and development opportunities. HR leaders might begin by focusing on the top 20% of at-risk employees and providing these employees with a differentiated employee experience (EX) including, for example, skill development opportunities, job rotations or offering alternate working options.
Analytics allows HR executives to measure and better understand program performance, identify program shortfalls and determine program ROI. It’s essential HR leaders track key metrics, including average time to fill a position, cost to hire, employee engagement, succession planning, readiness for critical roles, inclusion index, and attrition and retention rates for different employee segments, including high performers.
In a tight labour market, CPOs need to have a special focus on recruiting metrics. It’s also vital to track the effectiveness metrics, such as the quality of the hire, as well as efficiency metrics. The combination of qualitative and quantitative metrics provides a more complete picture of the state of recruiting. This theme is explored in more depth in The Future Chief People Officer report.
If a global talent shortage wasn’t problem enough, some countries are going through the ‘Great Resignation’ phenomenon where employees are resigning en masse in muddled economic conditions characterized by both labour shortages and, paradoxically, high unemployment. Net talent gainers play both talent offense and defence by creating an environment where people want to be, thus prompting the ‘Great Hire.’
“In this environment, leaders strive to be net talent gainers, hiring more employees than they lose and focusing on why people join and stay, as well as why they leave,” notes John Bremen, WTW’s chief innovation and acceleration officer. “They create value propositions and EXs to drive success.”
Our work with the Mack Institute team affirmed the importance of a transformative EX to meet the needs of a digital-first business culture. Business leaders and other stakeholders queried at a Mack Institute stakeholder conference identified people and culture as far greater business challenges than strategy, technology and innovation, or sustainability and corporate social responsibility.
At the top of the digital transformation pyramid, transformative organizations are more likely to hold leadership accountable for effective transformation and to establish the cultural bearings that will drive the whole organization. Transformation leaders also use digital tools and data-driven insights to make business decisions more likely to attract customers while innovating and collaborating throughout their organization.
Based on WTW’s own research and interaction with clients, it has become evident to us that in a culture that prizes collaboration, it is important employees know their ideas are encouraged and valued, and the organization expects and depends on relationships that promote and share knowledge. Our research finds collaboration fosters new products, more agile ways of working, faster problem solving and a more effective EX.
In our 2021 EX Survey, WTW defines EX as follows:
The EX is the sum of all the moments that matter between an employee and an employer. The experience that organizations shape across purpose, work, total rewards, and people has direct links to workforce engagement, productivity, and sustainable business performance.
The last two years have been tough on many workers, with a global health crisis adding to disruptive business pressures. Based on our 2022 Global Benefits Attitudes Survey, within the US IT and Telecom industry, 60 % of IT and Telecom employees feel disconnected from their teams, which is no surprise considering COVID-19. 39% reported anxiety or depression, and 57% of employees worry that working remotely will have a negative impact on career. Mental or physical health is an issue for 56% percent. With that, many feel exhausted or, one might say, experiencing burnout.
To the last point, WTW research finds burnout is rising within many companies as employees feel unrelenting productivity pressures and a sense of work routinely intruding into personal lives. Employees often point to team leaders who seem not to recognize boundaries or fail to inspire and effectively manage their colleagues with clear priorities.
EX is a crucial ingredient in a broader corporate culture and a major concern for employers, with more than nine in 10 saying EX is a top priority and many seeing EX as the foundation of engagement and wellbeing, as well as productivity and overall business performance.
In their efforts to find and retain talent, employers are moving to create or enhance their total reward strategies to give priority to workforce wellbeing and the EX.
WTW’s Benefit Trends Survey 2021 found 72% of employers globally plan to differentiate their benefit offerings by, among other things, addressing the specific needs of employees over the next two years. This represents a significant shift as only 23% have such a differentiation strategy in place today.
At the same time as those factors leading to burnout, business leaders are wrestling with a growing focus on diversity, equity, and inclusion (DEI), as well as the global skill shortages.
While addressing wellbeing requires a wide range of remedial actions, an essential step is to improve benefits and empower employees to take advantage of their benefits. This will improve their workplace experience not only in terms of wellbeing
but to help them find challenging and satisfying career opportunities.
An increasingly popular and effective approach is to deploy digital technology to optimize benefit programs. Technology permits an unprecedented degree of benefit customization or personalization. In our survey, 74% of employers plan to have an enhanced digital strategy in place over the next two years.
When we ask the question back in 2020, mindful of having to achieve these objectives within certain constraints, about half of our respondents (51%) plan to optimize cost and risk management, and more than 44% plan to improve program efficiency.
Employees will need to stay on top of enrolment plans, record maintenance and the whole process of ensuring employees understand their benefits. This is not just about group life and health, for example, but new or changing risks around mental health, privacy and other exposures exacerbated by the pandemic, digital transformation, and other workplace pressures.
The rapid transformation of the global workplace requires organizations to rethink how they reward employees and create frameworks that enable them to attract and retain talent and optimize HR investments. They must simplify complex pay decisions and prioritize factors including rewarding skills that help meet future objectives, compete effectively for coveted talent, recognize the growing global movement to establish gender pay equality, and ensure top performers are adequately rewarded for their contribution.
The pandemic created a stress test that affected both business and human dimensions
Source: WTW 2021 EX Survey
