The fact is that work, as we know it, has and is continuing to change. But what do these changes mean for the future of work? What will the workplace look like a decade from now? Are organizations accurately prepared for the trends that will impact the trifecta – work-worker-workplace – in the coming years?
While Artificial Intelligence (AI) development is displacing many employees, it is allowing others to compete for other positions. With an aging workforce, companies will need to develop new approaches that enable senior employees to work later in life and past the current retirement age. As organizations increasingly rely on a mixed workforce consisting of full-time and contingent employees, they will be challenged with attracting, integrating and retaining an increasingly more diverse workforce.
Future Trends in the Workforce
We know the way people work is changing and has been for some time. What drives workers today is different from what it will be in the future. It turns out that the “gig economy,” in younger and older professionals’ careers, is what is defining today’s workplace trends. You might call them contingent workers, freelancers, non-agency contractors, moonlighters, temps, third-party consultants, human cloud workers — whatever you name its participants, the “gig economy” is flourishing. The gig economy is one of several names used to describe various forms of “gig” work, or small project, freelance work. Other definitions include the “on-demand economy,” “collaborative-consumption” and “sharing economy.” Staffing Industry Analysts, the global advisor on staffing and workforce solutions, has a broader definition in that it includes any contingent work of a fixed duration, such as temporary workers and independent contractors/1099.1 The gig economy presents a real opportunity for a change in the way businesses are run and how individuals are employed and engaged by a company. Outsourcing and freelancing will only become more prevalent in the future.
How will this affect HR and Talent Acquisition?
We know that skill and worker shortages are currently rampant. With the national unemployment rate at 3.62, HR managers have begun adopting more agile talent strategies. Many HR managers are already utilizing flexible or contingent talent, including freelancers, temps, and independent contractors. HR managers anticipate that work done by contingents will only continue to increase in the next 10 years. Worker shortages will increase in the future. Currently, contracting gig workers provides additional flexibility for the organizations that engage them. Their talents are best used for the overall success of the business. Businesses are leaning more on contingent labor each year due to significant cost savings and the ability to flex up or down quickly and will continue to do so in the future.
For Millennials and Gen Y’ers, independent contracting isn’t just a means to earn a living, it’s a lifestyle that many are embracing. There are many reasons people are drawn to the gig economy, but the primary focus is flexibility. We are now living in a world where the typical 8:00–5:00 job is no longer the norm. This flexibility empowers people to make money or use a skill in a way that wasn’t previously available.
For Organizations to Succeed in the Future
For organizations to succeed in the future, companies will need to shift how work gets done. Not only is it more efficient for companies to hire specialized talent on a contract or gig basis – millions of workers want to work this way. The challenge is that the related corporate systems, processes, and governmental worker protections and benefits haven’t yet adapted. To understand these changes, we need to look at Talent Acquisition and how to continue to use talent in the gig economy while minimizing your risks.
It’s becoming more difficult for companies to attract and retain talent, so Talent Acquisition professionals need innovative solutions for attracting and maximizing each skillset from non-traditional labor pools. The uncertainty of employment in the future is a factor that must be managed very well. It is therefore important to have a plan, considering the mix of full-time, part-time employees, and independent contractors.
HR must stay on top of the situation, given how work is constantly evolving. We are currently in the biggest freelancer economy in history and it is going to continue to grow. Individual talent and experience are becoming the most sought-after commodities in the market. The web-based business model will continue to bring consultants and clients together, with the ability to give better viable work options. The use of technology platforms is going to increase. It is a great way for companies to find top talent for their projects and for individual consultants to find projects.
Trends to Prepare for the Future of Work
Here are some of the most important trends to prepare for the future of work:
- Engagement – In the present race for talent, engagement is the key to holding on to the right employees. In order to engage employees long-term, there needs to be a culture that fights career stagnation and role immobility.
- Mobility – Talent mobility helps organizations to dynamically develop and align their workforce to strategic business needs. Moving beyond traditional succession planning, mobility allows HR professionals to proactively and strategically move people from role to role at any level of the business to meet organizational goals. Allowing workers to move within the system, find their niche, have the flexibility to switch and find a new niche to reinvent their skillsets, is a great way to help employees grow and to retain them. This holds especially true in an ecosystem with a rising alternative workforce.
- Remote Work – Allowing workers to work remotely could be an effective way to communicate to present and future employees the organization’s openness to incorporating the individual’s preferences and growth needs into the job role.
- Leaders and Leadership Style – With the trifecta of work, worker and workplace changing, leaders and styles of leadership need to evolve and will be required to ensure we continue to survive. The great leaders of the future will be the best facilitators in a virtual world. They will connect people and ideas instead of telling people what to do and how they should be working. Future generations of employees will expect to be treated like leaders. They will want trust, autonomy, and independence. With redesigned managerial structures and the universal culture of agility, the kinds of leaders that organizations need and want has changed. This is not merely because of the millennial boom but rather due to a mix of all the factors.
- HR Technology – functions in the future will require integration. Being able to adopt technology is not always about acclimating to change but rather an issue of budget and leadership. With HR tech becoming a trend that organizations need to adopt and adapt to effectively, both the enterprise mindset and budget planning need to be in favor of the smoothest transformation.
- Workplace Culture – The future of work demands that organizations commit to creating a culture where creativity thrives, collaboration is facilitated, and communication is encouraged. The current trend of leading by example requires this cultural shift to be driven top-down with the effective involvement of executive leadership. Collaboration not only refers to the cooperation between teams and functions but also between business leaders and HR.
- Agile Organizations – Agile companies are quick in responding to changes in the marketplace or environment and are focused on their customer’s needs, which call for customized rather than standardized offerings. Organizations in the future will need to be even more nimble, responsive, and able to seize the advantage of technological progress across the organization.
- Talent Pipeline – Organizations need to start preparing for the skill requirements of tomorrow and ensure that their employees are ready to rise to the challenge. Creating an adept talent pipeline rests on an adequately skilled workforce that can collaborate with the latest technology.
While these are some of the workplace trends we see evolving in the coming decade, the future of work is a dynamic and complex structure where even the smallest changes can lead to big differences and alterations. Organizations that are ready to lead change will prepare and adapt or will be left in the dust.
ClearPath Workforce Management risk mitigation services bridge the gap where fear of risk may prevent the engagement of top talent. We’ll also explain how ClearIC™ can automate and simplify the Independent Contractor evaluation process while mitigating your risk.