A significant shift is transforming today’s corporate landscape. The gig economy and technological advances are reshaping the workplace in ways that have significant ramifications for human capital and talent management. Flexible independent work provides increasingly attractive and viable career options for millennials and Gen Z, while artificial intelligence and automation are replacing job functions and requiring a fresh look at leadership training.
What does this mean for HR leaders? The result of these trends is an even tighter labor market with new demands for developing and retaining top talent. The companies that embrace and proactively respond to this emerging reality will have the competitive advantage as they execute on strategies that will enable them to win the talent war, enhance employee productivity and elevate brand equity.
Let’s dive in and discuss the three people and culture investments that will be critical to the future of work:
The gig economy has dramatically changed today’s workplace, creating desirable alternatives to traditional corporate careers. In growing numbers, talented professionals are choosing to be independent contractors, giving them the flexibility and autonomy to pursue more purposeful work, and leaving companies scrambling to attract and retain the workforce they need. With talent supply limited and demand at an all-time high, companies have to respond to these empowered workers by providing more of what they want in their careers: purpose and impact. This is especially true for millennials who, according to Zogby Analytics, are disproportionately (85%) looking for work that is enriching for themselves and the world.
The importance and rationale for cultivating purpose in the workplace should not come as a surprise to corporate leaders. The rise of conscious capitalism, purpose-driven leadership and a proliferation of impact-focused summits and conferences are all part of a growing movement calling for business to be a force for good in the world. Today’s most talented workers are leading that movement, requiring companies to authentically and strategically integrate purpose and impact into their culture. As Linkedin founder Reid Hoffman states, “Companies that understand the increasing emphasis of purpose in today’s professional landscape improve their ability to attract such employees and also their ability to retain them for longer periods of time.” As Harvard Business Review points out, companies that drive purpose also drive profits and productivity:
- 85% of purpose-led companies showed positive growth, compared to 42% of non-purpose led companies.
- Inspired employees are almost three times more productive than dissatisfied ones, demonstrating this opportunity has compelling bottom line implications.
The demands of creating purpose and offering impact may, at first, seem daunting. Especially for companies whose core business is not inherently associated with some type of environmental, economic or social impact. However, offering purposeful work does not require creating or selling products and services that “save the world.” Employees experience purpose at work in a number of ways, including autonomy, influence and recognition, and it is enhanced by a demonstrated commitment to social responsibility. Ultimately, people experience purpose at work as they do in other areas of life: through opportunities for growth and meaningful relationships – both core to our next two findings.
To successfully recruit and retain today’s top talent, companies must invest in the potential of their employees, even more so given the implications of technological advances and the gig economy. With automation replacing many technical tasks, employee responsibilities are increasingly related to people interaction and teamwork. This has prioritized the need for soft skills, as corporate leaders at every level have indicated. Additionally, in this competitive labor market, companies have a significant advantage when they offer robust training and development as part of a full-time job. According to a Gallup study, all workers, and especially millennials, value training and development by a 7 to 1 margin, while a recent survey from LinkedIn found that 94% of employees said they would stay at a company longer if it invested in their career development. What can’t be overlooked, however, is that the approach to these programs matter.
According to Deloitte’s Human Capital practice, today’s workers view their careers through a learning and development lens, making it one of the most critical talent management issues companies face. But, “rather than an orderly, sequential progression from job to job,” companies should cultivate their people through “a series of developmental experiences, each offering the opportunity to acquire new skills, perspectives, and judgment.” Experiential learning is shown to yield a retention rate far higher than with traditional approaches, as it moves us beyond theory by creating emotional bonds that solidify insights and learning. IBM’s Corporate Service Corp, an experiential leadership development program, has shown to improve leadership skills and improve retention with 77% of participants agreeing they are “less likely to think about looking for a new job with another organization.”
Thoughtfully designed development experiences can provide the opportunity for human connection, collaboration, and the cultivation of critical skills. This approach not only allows your employees to reach their potential, it leads to increased engagement and can help create a culture of collaboration.
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As automation and digital technologies permeate the business world, virtual work environments are becoming more common, making it increasingly difficult for teams to foster the trust, inclusion and teamwork needed for optimal productivity. A study conducted by Ferrazzi Greenlight states that 79% of workers regularly work in dispersed teams. The new world of collaboration is filled with Slack messages, shared screens and Google Docs, and very rarely involves the interactions needed to develop the cultural competencies and emotional intelligence for strong leaders and teams. And because these relentless, virtual channels operate 24/7, employees are “plugged in” longer than ever, resulting in higher stress levels, increased isolation and more loneliness.
While this advancing technology has improved worker efficiency and capabilities in some areas, it has also escalated the need for companies to promote face-to-face collaboration and a culture of inclusion. The results of doing so can be significant: increased productivity, stronger financial returns, and an enhanced ability to innovate and attract top talent. The best way to do this, organizational psychologist Adam Grant advises, is for teams to get away from the screen and into the real world. As noted above, experiential learning provides opportunities to collaborate in ways that offer meaningful connection with colleagues. Community engagement initiatives are also an area where companies can create purposeful collaboration experiences for their teams. Moving beyond ping-pong tables and happy hours and providing real opportunities for employees to stretch beyond their comfort zone and build relationships outside the office is more critical than ever.
Technological advancement and the gig economy often dominate the conversation about the future of work, yet this doesn’t paint the whole picture. As Mercer’s 2018 Global Talent Study correctly points out, we are entering the Human Age, where employees are looking to be viewed not as assets or capital, but as people. In order to unlock growth and unique competitive advantage, companies must provide purposeful work, innovative development and cultivate a collaborative culture. The companies that do will thrive.