Businesses need to learn to adapt to a changing workforce that involves more generations of workers, greater collaboration and more stakeholders, or risk becoming unattractive to employees and investors.
Speaking at the Centre for Workplace Leadership’s Future of Work conference yesterday, London Business School Professor Lynda Gratton highlighted a number of key trends which will shape the future of workforces globally.
1. Work is more complex
Gratton says the development of technology and the pervasiveness of the internet is leading to work becoming more complex as roles are being “hollowed out”.
“By 2025 there will be 5 billion people with access to the internet…This is having profound impacts on the way we work,” she says.
“Work is becoming more complex and it’s becoming more complex because work is now hollowing out. There is highly skilled work on one end and low skilled work on the other, but the mid-skilled work has almost completely disappeared,” she says.
Gratton says this disappearance of mid-level skill jobs has occurred because more processes have become automated and everything else has been outsourced to countries with a lower labour cost.
“What’s left are really simply complex jobs… and jobs which actually don’t require a lot of skill but need to be done by someone in the location, for example a carer, a cleaner or a server.”
In the next decade, Gratton says research shows 47% of jobs will be automated.
2. Markets are rebalancing
Gratton says the world’s most dominant economies are starting to shift, with China having the largest growth in Fortune 500 companies.
She says the education sector is also in a transition, with online courses opening up higher-level education to people globally.
Last year a Stanford basic robotics course was put online and taken by more than 22,000 people globally. The person who topped the course was a 13-year-old girl from Pakistan, who was later invited to attend the World Economic Forum in Davos.
3. Longer working lives
Gratton says of babies born in 2012, at least one in three will live to the age of 100, meaning people will have to work longer in order to retire comfortably.
“This is going to have profound impacts on the workforce… If you’re going to live to 100, you can’t retire until you get to 85,” she says.
Gratton says in order to retire at the current Australian retirement age of 65, people would need to have saved 47% of their income.
The result of working longer, means there is going to be more generations in the workforce – an issue which is already an emerging problem from managers.
Currently there are five generations at work – traditionalists, the baby boomers, Gen X, Gen Y and Gen Z. Gratton says each of these generations has different priorities.
“We’re already seeing at work quite a lot of friction between these generations, particularly because they like to use technology differently,” she says.
She says Gen Y workers want work that helps them develop their skills because they realise they will have long working lives with many career changes ahead of them.
4. Corporate social responsibility
Gratton says as the world changes, businesses are going to be expected to play a greater role in combatting climate change and tackling the distinction between the highest earners and lowest earners in the world.
“The issue of poverty and inequality is changing work, it’s changing organisations. If you put the richest 85 people in the world on a double-decker bus, their wealth equates to the total wealth of half of the world’s population,” she says.
“Some people around the world are saying businesses need to do something about that.”
Gratton says the ratio between the highest paid executives in a company and the lowest paid employees should be closer to 20:1, in contrast to the current 200:1 difference.