People Change Performance

2020 VISIONthe future of work

“The chains of habit are too weakto be felt until theyare too strong to be broken.”Samuel Johnson (1709 –1784)

INTRODUCTION

On 15 October 2003, human resources directors and leaders from the public and privatesector joined Penna Consulting to debate what the world of work will look like in 2020.

Leading the debate were two of the UK’s leading experts on future technological and socialchange: Ian Pearson, futurologist with BT Exact and Melanie Howard, co-founder of the Future Foundation.

Chaired by Richard Finn, Director at Penna Consulting, the event produced some startlinginsights into the seismic shifts in ways of working which many of us will experience within ourown working lives.

This report is based on the presentations and contributions made at the 2020 Vision event.It aims to stimulate thinking; but also to provoke action. Because one message from the daywas absolutely clear: to be ready for 2020, we need to start preparing now.

In his book ‘The Age of Unreason’,Charles Handy describes a cruel but pertinentexperiment. Place a frog in hot water and itwill immediately hop out to a morecomfortable environment. But place the samefrog in cold water and then heat it, and theunlucky amphibian will let itself be slowlyboiled to death.

It is worth remembering how manyorganisations have crumbled because theyfailed to respond to the radical way in whichthe world around them is changing. And thepace of change is getting faster every day.

Will we, asks Richard Finn, Director at PennaConsulting, suffer the same fate as Handy’sfrog? Or do we have the foresight and will tochange before we are forced to do so? If so,then it is crucial to anticipate and respond tothe new environment and to identify theareas of change that will have most impacton our organisations, our people and the way we work.

“The future is not inevitable. We can influence it, if we know what we want it to be.”Charles Handy

“Any company that can’t imagine the future won’t be around to enjoy it.”Gary Hamal and CK Prahalad

The ‘Care Economy’ of 2020 will placeincreased importance on emotional andintuitive competencies; competencies thatare more commonly found in women thanin men. The effect will be a growing under-employment of men, who will have to searchout a new identity and role. The deepconcern of how men will adapt to thedemands of the future is well illustrated bythe European Union’s creation of a FuturesUnit to examine ways of ‘feminising’ theEuropean male.

The future could see the death of the mega-corporations and the birth of smaller,informal groups of individuals workingtogether. Skilled workers will usetechnologies such as virtual reality to set up highly competitive and agile co-operatives, easily able to undercut theirformer employers. Co-workers from acrossthe globe will meet as ‘avatars’ – computer-generated images – in virtual settings.

Yet the demise of large corporations and the rise of the co-operative will not lessenour need for community at work. Theoffice, far from being consigned to theannals of industrial history, will remain as a focus for daily working life with peoplefrom different organisations comingtogether in local ‘drop in’ offices to fulfiltheir need for human interaction.

What will drive the change?Two factors are likely to have more impact onthe future of organisations than anything else:developments in technology and in society.

“Technology will be the principal driver offuture change”, says Ian Pearson of BTExact. The technology of 2020 will out-thinkand outperform the most brilliant academicminds. Many of the roles that are currentlyperformed by human beings, even those thatrequire creativity and insight, will soon bethe exclusive preserve of technology.

By 2020, more of us will be employed in the ‘Care Economy’, and fewer people in professions that require technicalcompetency. As the knowledge andexperience of the hospital consultant, forexample, becomes replaceable by roboticsand artificial intelligence, so the function of the nurse and other carers will becomemore important.

There is already evidence of more emphasisbeing placed on these intangible emotionalskills. Joe Stewart, Senior Director of HumanResources at the Police Service of NorthernIreland provides a concrete example. Hisorganisation has used assessment centres forthe past two years to select recruits with theright emotional qualities. “It’s a veryexpensive, highly specialised activity, but weare looking at people we hope will spendtheir 30 year career with us,” he explains.

technology in the workplace may well have the effect of making corporate life more human. In 2020, technology will have replaced the transactional elements of work enabling people to concentrate on developing people skills.

Technology is clearly one of the mostimportant drivers of change for HR.“With information technology, we canautomate away much of the boring drudgery of everyday activity,” says IanPearson. Indeed, if a procedure can beexplained as a set of logical steps, whichfollow consistent rules, then generally it can be taught to a computer.

“The transactional business of HR varies very little across business sectors: you always need to organise holiday leave,sick leave, training, salaries and so on,”says Pearson. “This means that it is very easy to design computer systems to carry on these activities.”

Technology can also add value to the HR function in entirely new ways. HRdepartments are already maintainingdatabases of up-to-the-minute informationon staff and even previous job applicantswho might be good candidates for futurevacancies. Increasingly sophisticated ITsystems will mean this process can berefined to offer organisations ever more vital information about their human capital.

Keith Robinson of Totaljobs points out thatsome call centres effectively operate in thisway, with workers employed by differentorganisations and given different scripts, butworking from the same building. “Eventually,the concept may give us the chance to workfor three or four companies simultaneously –and that too is already happening, withpeople made redundant from managementconsultancies now working freelance forseveral consultancies at the same time.”

HR will face huge challengesaccommodating a disparate and highlyindividualised workforce. Sustaining andengendering the employer brand, companyvalues and ethos will become a challenge ofimmense proportions for the CEO andHuman Resource Directors of 2020. In sucha climate, experience of the current industrialeconomy will no longer be an asset.

One decisive factor making it harder topredict the way in which the workplace willchange is the prospect of technologyadvancing to a stage where it will begin todevelop itself without intervention fromhumans. Already computers are designingcircuits which work in ways that engineerscannot explain. In the future, technology maydevelop to a stage where we cannot controlit: a scenario reminiscent of sci-fi cinema.

Yet the future according to Ian Pearson is notthe apocalyptic one portrayed in Hollywoodfilms. Paradoxically, the increased role of

“There is nothing permanent except change.”Heraclitus (540 – 475 BC)

For Melanie Howard the future will beshaped by social trends and demographics.‘Power’ will move in favour of employeesand, driven by an increasingly olderworkforce and the influence of the work/lifebalance agenda, the demand for flexibleworking will rocket.

The ageing population will transform theworkplace and the ‘grey economy’ willexpand dramatically in the next decade anda half. Younger people will be more preparedto challenge the nine-to-five working week,as they increasingly look for meaning in theirwork and ‘self-actualization’ – the pinnacleof Maslow’s hierarchy of human needs.

Social change will have a fundamental impacton the HR role and the design of theworkplace. People in the industrialised worldno longer live in a state of want, but of surfeit– we no longer worry whether we can affordto put food on the table but concern ourselveswith where we will holiday this Easter. Weexpect not just security, but happiness.

This shift has led the workforce to becomeincreasingly demanding of a better work-lifebalance. Howard sees this as a trend thatcan only gain momentum. Corporate life has– until recently – apparently offered manyworkers both the financial rewards to buyinto the consumer lifestyle they seek, and arewarding career structure which gives shapeand meaning to their lives. But now, peopleare beginning to question this and are

looking for different ways of living their lives.We are gradually realising that the pursuit ofstatus and materialism may damage oursense of wellbeing.

The employee of 2020 will be more likely todemand time away from the workplace inwhich to satisfy the urge to be a goodparent, or to contribute to the community –or to simply enjoy life.

The shift in the psychological contractbetween employer and employee, whichtraded loyalty for job security, and the shiftto the idea of ‘employability’ among workers,is one of the most significant trends ofrecent years. A job is now viewed as ameans to acquire skills to further careerprospects, rather than as an end in itself.Technological developments, which makeremote and freelance working easier, willcontribute to this trend.

Employees’ needs will continuously change,with, for example, younger staff eager toearn the highest possible salary and thenmove on, and older people anxious to workflexible hours. According to Richard Finn,HR will become a bespoke serviceaccommodating the demands of eachemployee – tailoring contracts to suit.“HR would be well advised to follow theapproach of Marketing, which dividesconsumers into different socio-economicgroups, and accommodate the differingmotivations of the workforce.”

Shaped by technology and by socio-economic trends, this vision of the futureraises questions for HR professionals.How is HR to plan for the workforce of2020? How can HR professionals influencethe way employment in the future will look?How do these future visions affect thecurrent HR agenda, and issues such asrecruitment and retention, the employerbrand, employee motivation, organisationalstructure, customer relationships and highperformance working? Is the HR role itselfgoing to change fundamentally?

aspirations of older workers and thematerialistic needs of younger workers,for example. The workplace of 2020 willunquestionably be more individualised anddiverse and understanding their motivationwill become more complex and of criticalimportance to business success andindividual fulfilment.”

The key challenge for HR is to keep up withthe changing world outside the workplace.Too many organisations are conservativeout-posts in a society which is making newdemands on people at home and at work.HR directors need to hone their strategicthinking, and their leadership role, and thinknot only beyond the four walls of their ownorganisation, but beyond this year, next yearand the year after that.

Lateral thinking is needed if HR is to developthe services it provides: Specialist HR firmsand the HR departments of some largeorganisations may start to offer whatamounts to an agency service to self-employed or cooperative workers. They willact as a disinterested third party, enablingthe clients of these workers to check outtheir employment record quickly, knowingthey have an objective endorsement. HRfunctions in specialist organisations couldalso look at offering specialist training tofreelance workers.

Understanding employee motivation mayalso help organisations develop a brand thatis meaningful even if the conventionalemployer/employee contract becomes a thingof the past. Richard Finn points out “HR isguilty of not doing enough to discover whatit is that motivates individuals – the ethical

NEW HORIZONS FOR HR

• HR should work on mission statements that take a longer term view, looking at the way in which the human brand of the organisation should develop.

• Part of the HR role should be to advise management about developments in the world outside work which influence workers. “HR directors should become visionaries whofeed into the corporate strategy, looking at the human perspective of the brand, and are respected for doing so,” says Melanie Howard.

• More work needs to be done on understanding what makes the workforce tick – which means taking lessons from the Marketing profession and segmenting existing employees into different groups. Technology is a vital enabler of this process.

• Employers must develop a brand that motivates the very best to want to join, and stay,in the organisation. HR and Marketing must share their skills to understand what turns their employees onto working in their organisation and to ensure that there is absolute consistency between internal reality and external perception.

• HR needs to initiate learning and development strategies for staff, looking ahead of their immediate development needs and taking into account the growing demand for ‘human’ skills like intuition, empathy and creative thinking.

• Strategic thinking in HR should include a sense of social responsibility.“HR directors will soon be faced with the choice of employing the same number of people and doing more, or employing fewer people and doing the same amount,”says Ian Pearson. “Big organisations do have a responsibility not to make huge numbers of people redundant.”

• HR should also take responsibility for changing job design – or even re-inventing jobs when necessary. Most industries will be able to retain staff if they are retrained for different jobs, rather than laying them off.

• New opportunities will abound – but HR directors need to take the initiative. HR departments of large companies could offer specialist services to other organisations.Others could set up as independent operations, offering an ‘agency’ style service to independent employees.

PREPARING FOR 2020:THE WAY FORWARD

Penna – Helping you handle the futureIf you would like to discuss the content of this paper, or to find out how Pennacan help you to prepare for the challenges of 2020, please contact your localPenna representative or call +44 (0)1753 784000.

“The best way to predict the future is to create it.”Bernard Katz

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