Megatrends are creating a sea change in our workforce population; health and wealth, shifting age demographics, immigration, to name a few. Simon Cooper, partner at The Chemistry Group discusses the unprecedented shifts and how they will impact recruitment, retention and the business.
Seismic shifts are taking place within the global workforce at an unprecedented scale. The workforce is becoming healthier and wealthier. We are better educated than ever before, we have higher average incomes (even allowing for recent food inflation and so forth), we have better access to health care services and specialist advice and medical treatments have improved exponentially. That's the bigger picture anyway. Because whilst the global workforce is expected to be more educated and healthier than previous generations by 2030, overall improvements in education levels for the world’s working population are predicted to slow down over the next two decades. The numbers of non-educated employees are projected to drop by less than five percent compared to an 8 per cent drop in the last twenty years.
At the same time, a skills gap vacuum is becoming more prevalent. At one end of the scale, birth rates are dropping, and at the other, the working population is ageing and retiring. In fact, a recent report by Robert Half Management Resources revealed that employers are becoming increasingly concerned about the loss of the baby boomer generation, as reported by The HR Director in September.
As the loss of legacy knowledge and widening skills gaps are becoming more evident, the UK is becoming increasingly reliant on immigration to prop the ‘future us’ up.
So what are these shifts – so-called mega trends – that have the propensity to bring about a sea change in the workforce population? At the core are demographics, technology and flexible working.
Demographics
An increased ageing population invariably means that the workforce size is decreasing. It is estimated that over the next twenty years, there will be 900 million people of working age, 40 million fewer than the previous two decades. Some of the world’s most prosperous economies like China and Japan are likely to experience a significant workforce shrinkage. And this is despite rising state pension ages across the world; people will be working for longer. And age diversity in the workplace will be ever greater. Despite this, millennials – Generation X and Y – are projected to play a huge part in the make-up of the future workforce, accounting for around 25 per cent in the UK alone. And with them will inevitably come greater demands for work-life provision especially around flexi and remote working.
Gender equality will play a significant role too, with pressure growing for much greater numbers of women at board level. And in terms of leadership, a Women On Boards 2014 study found that female leaders resulted in 25 per cent improved business performance.
Technology
Technologically-related themes such as data protection, gamification and on-demand learning and development are becoming more prevalent within businesses.
Crucially, organisations need to keep up-to-date with the latest data protection legislation, such as The Right To Be Forgotten concept, primarily relating to search engines but which also have resonance in the workplace as staff become more data privacy savvy. Individuals have the right to know which information is stored and collected about them as well as requesting the deletion of personal data.
Digital advances in L&D are taking off, too. As businesses are looking for new ways to develop and train their staff, the “Netflix approach”, where staff are in control of the when, where, what and how, is set to become the next big thing. This shift towards DIY training and binge learning is likely to impact hugely on employee engagement. And it will test the ability of HR to design programmes that have lasting impact, changing how people work through an engaging online experience, not just sparking their interest and leaving them to it. Gamification in particular – the use of game-related elements in non-game environments – is also becoming increasingly popular in L&D. The majority of organisations currently using the gamification concept internally are recognising its value in employee engagement levels. Predictions are that by next year, 70 per cent of 2,000 global businesses will have at least one game-inspired app for employee use.
Flexible working
Following the recent UK flexi-working legislation which gives employees the right to request flexible working hours, the traditional 9 to 5 is likely to become obsolete in a relatively short space of time. In fact, by 2020, business leaders are expecting half of their fulltime workforce to be working remotely. The decrease in office staff therefore will have an impact on the working environment, not least because employers will need to look for new and inventive ways in sustaining productivity and engagement levels around the remaining office-based staff. Yet flexible working is central to the entire mega trends premise. Flexibility is the number one reason why millennials are attracted to a workplace. For organisations it is a response to a reducing workforce size and as demands for a better work-life balance are heeded in increasingly inventive ways, the evolution of a truly digital global workforce who have already grown up with technology, is likely to shake up everything we’ve come to know.
The HR impact
It’s clear that HR must respond appropriately to the shifts and trends to improve recruitment drives and retention practices. It’s essential to assess the impact they are likely to have on business performance as a whole.
