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Future of Work Report 1 PDF
Future of Work Report 1 PDF
A journey to 2022
www.pwc.com/humancapital
Contents
A journey to 2022 2
Three worlds of work 4
The Blue World – corporate is king 10
The Green World – companies care 14
The Orange World – small is beautiful 18
A summary of people management
22
characteristics in 2022
Are you ready? 24
Appendix 26
Contacts 27
Foreword
Disruptive innovations are creating new industries and business models, and destroying old ones. New
technologies, data analytics and social networks are having a huge impact on how people communicate,
collaborate and work. As generations collide, workforces become more diverse and people work longer; traditional
career models may soon be a thing of the past. Many of the roles and job titles of tomorrow will be ones we’ve not
even thought of yet.
So how are these developments going to eight years. This includes setting out this study. Our thanks to all those who
affect the talent your business needs? How the recruitment, reward and employee kindly shared their perspectives.
can you attract, retain and motivate them? engagement strategies that are likely to
How is HR going to change as a result?’ be most relevant as these worlds evolve, No exploration of the future of work could
and what this means for businesses, ever be definitive. Indeed, one of the
The projections in this report build on the workforces and HR. defining characteristics of our age is its
work started in 2007 by a team from PwC ability to surprise and confound. However,
and the James Martin Institute for Science This report draws on a specially while things happen that we cannot predict,
and Civilisation at the Said Business School commissioned survey of 10,000 people in we can still be prepared.
in Oxford, who came together to develop a China, India, Germany, the UK and the US,
series of scenarios for the future of people who told us how they think the workplace
management. The result was three ‘worlds will evolve and how this will affect their
of work’, which provide a lens through employment prospects and future working
which to examine how organisations might lives. Further input comes from a survey
operate in the future. of almost 500 HR professionals across
the world, who share their insights on
In this report, we look to 2022 and consider how they’re preparing for the changes Michael Rendell
how the characteristics of these three ahead. Rohit Talwar, Global Futurist and Head of Human Capital Consulting, PwC
worlds of work are likely to be shaped the CEO of Fast Future Research, has also
by the changes coming up over the next contributed his cutting-edge thinking to
2 PwC
2015 2016 2017 2018 2019 2020 2021 2022
Worker in Germany $10 tablet Assembly workers Analysts attend Doctor in China Rioting sweeps Licences granted for World’s first fully
says the “best is computer comes on in factory in Hanoi presentation by carries out ‘remote’ across university driverless cars automated and
yet to come” after to the market start wearing Fortune 500 Chief surgery on patient campuses as robot-served
celebrating 75 years’ sensors to gauge Performance in Ghana students lose hotel opens
service with the concentration, work Officer, who heads patience with
same firm rate and mood a combined Finance lack of job
and HR function opportunities
Orange World
The future of work – A journey to 2022 5
Three worlds of work
Tremendous forces are radically reshaping Figure 1: What will transform the way people work over the next 5 – 10 years?
At the beginning of the century, the world of work. Economic shifts are
Ray Kurzweil, Futurist and Chief redistributing power, wealth, competition
53%
Technology breakthroughs
Fragmentation
Small is beautiful
ompanies begin
C
to break down
into collaboration
The networks of smaller
Orange organisations;
specialisation
World dominates the world
economy
Collectivism Individualism
drivers of business
8 PwC
There will be a major shift away from the
thinking that we learn one profession, have one
job and stay in it for decades.
10 PwC
The most important
Relentless pressure to perform The attractions include high rewards for
thing in a job for 44% of
high-flyers. This is a chance to be one of the
In the Blue World, big company capitalism people around the world is
44
‘haves’ in a world where stable employment
reigns supreme. Consumer preferences
and profit margins dominate in a model
built around flexibility, efficiency and
is less and less the norm.
% job security.
64
volatile economic conditions alike. improve their job prospects.
%
around sourcing the right candidates
for the right tasks, as well as on-the-job
The challenges include how to integrate
performance measurement and assessment.
talent from different markets into the
overall corporate culture. The need to lead
innovation and open up new opportunities
will also see them investing heavily in R&D
and acquiring smaller start-ups.
of HR professionals are
gearing their talent
31
strategies to pushing back
12 PwC
Changing organisational Reward models include a strong
and HR demands performance-related element. A key
challenge for HR is convincing employees
The management of people within the
that the ‘price’ of data release and close
Blue World is a hard business discipline,
monitoring is worth paying. This includes
akin to finance within this scenario. In
developing the right balance between
addition to identifying and delivering the
the benefits (e.g. job security or health
talent needed to meet business objectives,
protection) and productivity gains of this
successful HR teams are developing the
personal data. It also includes building trust
ever more sophisticated measurement
through codes of conduct about how data is
and management techniques needed to
acquired, used and shared.
ensure that the workforce meets exacting
performance targets.
The machine will become fully intelligent and
The HR function evolves into a people and
performance unit, which is led by the Chief
have the ability to think independently.
People Officer (CPO), who is a powerful
and influential figure within the leadership Male, in permanent employment
team of the organisation. (aged 48 – 66), UK
Those responsible for people management
increasingly need financial, analytical,
marketing and risk management skills
?
to measure the impact of human talent
on their organisation and retain the
best people.
14 PwC
Rethinking values and goals Brands can rise and fall on the basis of their
environmental and social impact, with
In the Green World, companies take
government imposed corporate fines for bad
the lead in developing a strong social
behaviour in this highly regulated world.
conscience and sense of environmental
responsibility. They are open, trusting,
Corporate responsibility is not an altruistic
collaborative learning organisations and
nice to have, but a business imperative.
see themselves playing an important role in
Companies want to spend their profits to
supporting and developing their employees
make a positive difference, but it’s become
and local communities. Companies have of people around the
more important to make their profit in a
strong control over their supplier networks world want to work for an
responsible way. Employees are expected to
to ensure that corporate ethical values organisation with a powerful
65
uphold corporate values and targets around
are upheld across the supply chain, and are
able to troubleshoot when things go wrong.
In turn, the combination of ethical values,
the green agenda.
% social conscience.1
36
sustainable living, the HR function
is forced to embrace sustainability
and corporate responsibility as part
of its people engagement and talent
% organisations’ social and
environmental conscience,
which is intrinsic to the
brand and matches the
management agendas.
values and beliefs of
their people.2
Changing social and ethical values may
put more pressure on employers to take a
responsible attitude to looking after their 1 PwC survey of 10,000 members of the general population based
employees’ health and wellbeing. In turn in China, Germany, India, the UK and the US
employees demand healthier workplaces
2 PwC survey of 480 HR professionals from across the world
and workplace behaviours.
The future of work – A journey to 2022 15
The Green World of 2022 and services that benefit the customer, the HR helps to foster close collaboration
company and the broader community between employer and employee in
?
Moves towards the Green World are being
designing jobs around aspirations and
bolstered by the need to use resources
Diversity and work – life balance are viewed lifestyles. Reward models will be highly
in smarter and more efficient ways.
as sources of strength and competitive flexible as part of this personalised design.
The disillusionment that has followed
advantage. Staff are encouraged to forge While our survey confirms that the
in the wake of the financial crisis and
links with the community and to take part in opportunity to work for organisations
public anger over some corporations’ Questions for HR
socially useful projects. that share their values and beliefs is
environmental, social and tax policies is How can you turn your values
attractive to many of the best and brightest
forcing ever more companies and workers into a compelling element of your
Rather than basic performance, the candidates, the overall incentive package
to question the very nature and purpose of employer brand?
emphasis is on using data to promote is still going to be important. Financial
their business.
broader objectives, such as health and well- rewards can be augmented by the chance
Is your function set up to work with
being, professional development, flexible to take up secondments on social and
Companies recognise they have more of an people who want a greater say in
working and volunteering. The development environmental projects.
impact beyond their financial one so they designing their working responsibilities
of environmental best practice is a key
now quantify their total impact on society, and rewards?
objective for employees, who are encouraged Further challenges include how to ensure
the environment, the economy and tax.
to create new and interactive ways to share that strict compliance with laws and
Financial performance is in this mix, but How can you monitor the desired ethics
ideas and encourage people to take them up. standards doesn’t inhibit flexibility and
it’s no longer the prime driver of decision and behaviour most effectively?
enterprise. In a caring organisation, there
making.
Changing organisational and is also the question of how to keep people
HR demands in employment if there is a downturn in the
Customers look to Green firms to introduce
market or wider economy. Working closely
innovative ideas and practices and The CEO drives the people strategy for the
with employees and other stakeholders, HR
influence their own behaviour – often organisation, believing that the people
will be expected to come up with innovative
setting challenges around ways of working in the organisation and their behaviours
solutions to these challenges.
which can be transferred back into the and role in society have a direct link to the
customer’s own environment. Customers organisation’s success or failure.
Organisations in the Green World will
are proud to support Green firms and the
embrace and embed Sustainability,
broader societal goals they are pursuing. Green firm pioneers avoid hierarchy and
understand and manage their total impact,
Technology and the internet play a critical opt for flexible, flat and fluid organisational
and drive opportunities that reflect good
role in providing total transparency of the structures. Everyone in a Green firm has
growth ie. growth that’s responsible, real,
firm’s environmental, social and ethical the opportunity to participate in decision-
lasting and inclusive.
impact and performance across all of making and feels responsibility for the
its activities. organisation’s success.
The need for economic and environmental
A distinctive feature of Green firms is the HR and corporate social responsibility fuse efficiency [will have the single biggest impact on
practice of co-creation – engaging with and organisations embrace sustainability
customers, partners, external agents and and support for socially valuable ‘good
the way we work over the next ten years]
the local community to create new products growth’.
Male, self-employed (aged 48 – 66), UK
16 PwC
Crowded urban centres will necessitate
‘anywhere working’ aided by technology.
18 PwC
The chance to take control
of their career, what they
do and when is what 29%
Seeking out fresh opportunities The Orange World desire for autonomy is
strongest in China, especially among young
In the Orange World organisations
people, indicating a generational shift
fragment into looser networks of
towards greater freedom, entrepreneurship of HR professionals expect at
autonomous, often specialised operations.
and specialist skills in this rapidly evolving least 20% of their workforce
Technology helps to bring these networks
46
economy. Over half of participants in China to be made up of contractors
%
together, often on a task-by-task basis, with
believe that traditional employment won’t or temporary workers
social media heightening the connectivity
be around in the future. Instead, people will by 2022.2
upon which this world depends.
have their own ‘brands’ and sell their skills
to those who need them. The belief that
Supply chains are built from complex,
the future lies in a contingent model is also
organic associations of specialist providers,
strong among graduates, though people
varying greatly from region to region
with fewer qualifications anticipate much
and market to market. Looser, less tightly
less change in their working arrangements. 1 PwC survey of 10,000 members of the general population based
regulated clusters of companies are seen to
in China, Germany, India, the UK and the US
work more effectively than their larger and
potentially more unwieldy counterparts. 2 PwC survey of 480 HR professionals from across the world
?
of 2022 HR manages bidding processes as part
create increased demand for people to have
a personal stake in the organisation’s or
Big business will be outflanked by a of an open market for assignments in
project’s success. Options such as project
vibrant, innovative and entrepreneurial which people from within and outside
delivery-related bonuses are therefore
middle market. A core team embodies the the organisation apply and compete for
going to become more common.
philosophy and values of the company. The postings and projects. Questions for HR
rest come in and out on a project-by-project How can you identify and attract the
A key challenge is ensuring that the people
basis. Some firms compete on quality Recruitment becomes largely a sourcing contract staff needed to meet different
being hired genuinely have the expertise
and specialisation, while others offer function, which is often merged with objectives?
required or claimed. This demands a
commoditised price-dependent support. the management of the huge number of
combination of effective verification and
Telepresence and virtual solutions allow contracts and price agreements required How can you verify the authenticity of
watertight contractual agreements, possibly
for greater remote working and extended for each company’s network of partner the data being used to select staff and
with penalties for poor and non-delivery.
global networks. organisations. associates?
It’s also going to require a high degree of
Many companies will be too small to have
relationship building and business trust.
Efficient systems and processes are the key HR hiring teams and will look to technology How do you effectively manage non-
Many contractors and partners will adopt
to success of Orange companies. Maximum or dedicated agents to supply needs. owned resource?
‘eBay-style’ ratings of past performance to
operational flexibility, lean staffing models,
help land the next contract.
collaborative partnerships and minimal People are more likely to see themselves as
fixed costs are critical enablers of Orange members of a particular skill or professional
firms. These companies make extensive network than as an employee of a
use of technology to run their businesses, particular company.
coordinate a largely external workforce
and support their relationships with third Orange pioneers will give a new lease of
parties. They take advantage of disruptive life to professional guilds, associations and
technology when appropriate and stay trade bodies – relying on them for training,
abreast of new developments to ensure they development and innovation.
are up to speed in their sector.
People are more likely to see themselves as
The development of networks and members of a particular skill or professional
relationships with contingent staff network than as an employee of a
is critical. Technology tracks their specific company.
applicability, location and availability.
20 PwC
2 out of 5
People around the world believe that
traditional employment won’t be around
in the future. Instead, people will have their
own ‘brands’ and sell their skills to those
who need them.1
31 %
of HR professionals are building their talent
strategies around the rise of the portfolio
career, hiring a diverse mix of people on an
affordable, ad hoc basis.2
Managing a diverse, heavily matrixed and virtual 2 PwC survey of 480 HR professionals from
organisation [will have the single biggest impact on the across the world
way we work over the next ten years]
How organisations source Organisations compete to find and Green World companies seek like- Technology provides the solution to
and attract talent secure the best talent available and minded individuals to extend their finding and evaluating contractors as
use extensive search and evaluation corporate family, taking great care suppliers of key skills. Commercial
methods to find the stars of tomorrow. to only select talent with the right terms are offered for a specific task.
behaviours and attitudes.
Talent is attracted by the potential for A company’s reputation within networks
high earnings, job security and status. Talent is attracted to Green World and online recruitment markets is
brands, their values and their culture. crucial in attracting talent.
Reward and performance Reward is based on finely tuned Organisations focus on total reward, Contract-based pay for projects is the
performance metrics. which recognises corporate citizenship norm. Results-based or buy-in contracts
and good behaviours alongside are also common. Negotiation skills
performance. are vital.
Learning and Individuals build skills and experience Personal and professional development Individuals develop their own skills.
development's role to adapt to changing business needs. fuse in areas such as volunteering. Professional guilds will re-emerge and
Learning and development is closely certify skills alongside online references
aligned to objectives and performance and performance rankings.
measures.
The role of HR HR uses advanced analytics to predict HR acts as guardian of the brand. There HR focuses on sourcing contractors and
future talent demands and to measure is a strong focus on creating the right negotiating the contracts, along with
and anticipate performance and culture and behaviours and on guarding performance management and project
retention issues. against sustainability and reputational economics.
risk across the supply chain.
Role of technology in Sensors and data analytics to measure Helping people to build work into their Creating virtual collaboration.
managing people and optimise performance. lives and minimise their environmental
impact.
22 PwC
The future of work – A journey to 2022 23
Are you ready?
The effectiveness with which your Forward-looking HR teams are already Most of the HR professionals in our survey
considering a range of different scenarios don’t believe they’re prepared for meeting
organisation plans people management for the future as part of their business the needs of a workforce that demands
for the long-term will be critical to its planning (see Figure 2), but few are taking more freedom, autonomy and flexibility.
a sufficiently longer term view to deal Only around 20% report that they’re
long-term viability, ensuring you have with them. ready to embrace the role of technology
the right people, with the right skills, in and automation in replacing knowledge
the right places to realise your evolving workers, even though most recognise this is
something they should consider.
goals. Think too much in the short-term
and you may find yourself on the back Figure 2: Planning ahead – How far does HR in your organisation look into the future?
24%
Long-term: I am actively
considering the evolving and multiple
visions of the future as part of our
long-term business planning
How will your organisation’s culture What do you need to do to get there?
respond to an environment of constant Better understand where you are now
change? What will be the role of through use of evaluation techniques,
leadership? What behaviours will benchmarking and measurement.
be most valuable to the organisation
and how will the organisation need
to communicate with and engage all
employees?
26 PwC
Blue World Green World Orange World
yc
plausible futures around each.
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og
io
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ol
hn
We started our research by examining the
Tec
forces that were affecting global business
and were likely to have significant impact
on the future. While there are many social,
Individualism
The common good prevails over Focus on individual wants;
Collectivism
environmental, religious and demographic personal preference, e.g. collective
a response to the infinite choices
factors that have a significant influence,
we chose to focus on the global forces
responsibility for the environment
over individual interest Global forces available to consumers
y
Re
og
ve
ol
rs
hn
eg
ob
ec
lt
l
al
isa tro
tio on
Protectionist policies begin to rebuild n Ic A yearning for the human touch
barriers to free movement of people minimises the personal impact of
and goods Cor technology on consumers
p o r a te i n t e g r a t i o n
28 PwC
Contacts
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© 2014 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.