Managing tomorrow’s people* The future of work to 2020
*connectedthinking Contents
Introduction 02 Small is beautiful: welcome to the Orange World 18 2020: where three worlds co-exist 04 The journey to Orange 18 Life in the Orange World: the main themes 19 Corporate is king: welcome to the Blue World 06 Work in the Orange World: the people challenges 21 The journey to Blue 06 The Orange HR business model 22 Life in the Blue World: the main themes 07 Work in the Blue World: the people challenges 09 Are you ready for tomorrow’s world? 25 The Blue HR business model 10 Appendix 27 Companies care: Definitions: Scenarios, Millenials 27 welcome to the Green World 12 Our methodology 28 The journey to Green 12 Global forces 29 Life in the Green World: the main themes 13 PwC Graduate Survey findings 30 Work in the Green World: the people challenges 15 Contacts 32 The Green HR business model 16 Foreword 01
The journey to 2020 about the future of people management. Our team has At the beginning of 2007, a team from identified three possible ‘worlds’ PricewaterhouseCoopers gathered to explore the – plausible futures to provide a future of people management. Our thinking was context in which to examine the sparked by the rising profile of people issues on way organisations might operate the business agenda – the talent crisis, an ageing in the future. In addition we surveyed almost 3,000 workforce in the western world, the increase in MillennialsA1 – new graduates from the US, China global worker mobility and the organisational and
and the UK who represent a generation just joining Foreword cultural issues emerging from the dramatic pace of the workforce, to test their views and expectations business change in the past decade. We wanted on the future of work. to explore how these issues might evolve and how organisations need to adapt to stay successful. We hope you will help us to encourage debate Many studies have attempted to capture a vision around this critical topic. It is said that the future is of the workplace of the future, but we set out to not a place we go to, but one which we create. And while things happen that we cannot predict, we can understand the people challenges that will impact people Managing tomorrow’s organisations and consequently the implications still be prepared. this will have on the HR function as we know it. Few business thinkers have proposed that the marketing or finance functions might cease to exist in their present forms, but some are starting to say this about HR. Michael Rendell With the help of the James Martin Institute for Partner and leader of Human Resource Services Science and Civilisation at the Said Business PricewaterhouseCoopers LLP School in Oxford, we used ScenariosA1 to think
A1 – Appendix 1, see appendix page 27 02 Introduction
2,739 When we started our research we had some • large corporates turning into mini-states and preconceived ideas about tomorrow’s world. Many taking on a prominent role in society studies have been undertaken to explore the future In July 2007, 2,739 graduates • specialisation creating the rise of collaborative of society, the environment, business and even the from China, the US and the UK networks told us about their workplace. Our challenge was to focus explicitly expectations of work. They had on the business context and the impact on people • the environmental agenda forcing fundamental all been offered jobs with PwC and work. changes to business strategy. but had yet to start. Some of While we cannot claim to have identified all the the key findings are highlighted possibilities, several strong themes have emerged: 2. People management will present one throughout this report of the greatest business challenges While some of the findings 1. Business models will change Businesses currently grapple with the realities of seem to confirm current dramatically skills shortages, managing people through change received thinking about the and creating an effective workforce. By 2020, the The pace of change in the next decade will be future of work, a number of radical change in business models will mean even more fundamental. Technology, globalisation, themes defy conventional companies facing issues such as: thinking. demographics and other factors will influence organisational structures and cultures. Our • the boundary between work and home life PwC is the biggest recruiter scenarios outline three organisational models of the disappearing as companies assume greater of graduates in the UK and future: responsibility for the social welfare of their a leading global recruiter employees of graduates. A3
A3 – Appendix 3, see appendix for a full breakdown of the findings page 30 03
3. The role of HR will undergo “HR needs to fundamental change ensure it is fit for HR has been perceived by many as a passive, purpose in order service oriented function, but given the context of tomorrow’s workplace and business environment, to be proactive we believe HR is at a crossroads and will go one of and maintain or three ways: develop its
• with a proactive mindset and focused on influence in the Introduction business strategy, HR will become the heart of the organisation taking on a new wider people future.” remit incorporating and influencing many other Keith Murdoch, aspects of the business Remuneration and • the function will become the driver of the Benefits Manager, corporate social responsibility agenda within the British American Tobacco Managing tomorrow’s people Managing tomorrow’s organisation • stringent people measurement techniques to control and monitor productivity and • the function will be seen as transactional and performance almost entirely outsourced. In this scenario, HR will exist in a new form outside the organisation • the rise in importance of social capital and and in house HR will be predominantly focused relationships as the drivers of business success. on people sourcing. 04 2020: Where three worlds co-exist
We believe it We identified a number of global forces that will have significant influenceA2, and of those we felt is possible that all that individualism versus collectivism and corporate three worlds will integration versus fragmentation would be the most co-exist in some significant. From this axis we identified three worlds and business models for the future. form, perhaps (See figure 1 opposite.) distinct by We tried to capture the events and trends which geographic region, draw a picture of life in tomorrow’s world and the or industry sector people management challenges that might prevail. The forecasting timelines and world descriptions for example. are not intended to be taken literally as complete visions of alternative futures. They are designed to present ideas and illustrate the more important points around the people management challenges. We believe it is likely that all three worlds will co-exist in some form, perhaps distinct by geographic region, or industry sector for example. As you read this document think about how your own organisation might be positioned within these scenarios and what implications this has upon your current people management strategy.
A2 – Appendix 2, see appendix page 28 2020: three worlds 05 Introduction Managing tomorrow’s people Managing tomorrow’s
Figure 1 Corporate is king: the Blue world
Where big company capitalism reigns supreme
In a nutshell: The globalisers take centre stage, consumer preference dominates, a corporate career separates the haves from the have nots.
2011 2012 2013 2014 2020
The Indian World’s biggest The brain-drain of A decade of M&A Global warming economy expands search engine and Eastern European consolidation changes the dramatically as largest technology workers starts to across industry climate of Europe; it goes through company merge reverse as workers sectors peaks as the snow on the a new wave of return home Alps melts, skiers cross-border to set up and head to the US acquisition sprees lead corporates, and becomes a building on global leader in expertise gained several industry in several sectors sectors 07
90% Corporates divide the haves and “Our search for have nots talent is now a of Chinese respondents expect The power of corporations means that a much global search. they will use a language at work greater divide has opened up between those The competition other than their mother tongue working for global corporations and those working in smaller enterprises. Employees of for talent will only mega-corporations have everything they need laid increase further.” Size matters on. Those working for smaller businesses remain at Blue World the whim of housing markets and basic statutory Hanspeter Horsch The sheer size of corporations in 2020 means entitlements, needing to self-supplement Associate Director, that a significant number now operate with annual educational support, health and insurance Human Resources turnovers that far exceed the GDP of many coverage, what remains of the public health Samsung Semiconductor individual countries, particularly in the developing system, and so on. Europe GmbH world. With echoes of the business models promoted by companies like General Motors in the middle of the last century, many companies now Welcome to the technology age people Managing tomorrow’s provide the equivalent of the welfare state for their Technology is all pervasive, entire cities in the employees to ensure they lock the best talent into US, Japan and the UK operate with ubiquitous their organisations. Internally managed service high-speed wireless networks that allow all centres are sophisticated and highly efficient – commercial transactions, entertainment and using processes perfected by the outsourcers of communications to be handled by every individual the ‘nineties. People metrics become an essential on credit card-sized devices. Pinpointing exactly part of everyday life to keep track of individual what you want and being shown where it is performance and productivity. available from wherever you happen to be is now taken for granted, allowing businesses continuously to refine and individualise their relationships with consumers, employees and shareholders. 08
75% Corporates drive lifestyle choices • Mass consolidation has had an impact on cultural issues. Leadership teams now have a Sophisticated measurement and segmentation high focus on the evolution of the corporate of respondents strategies mean companies can target goods and culture with rigorous recruitment processes to services across their customer base and to think that workplace ensure new employees fit the corporate ideal. employees. For example ‘green politics’ is seen as Existing staff are subject to compulsory flexibility will not a lifestyle choice rather than a meaningful political corporate culture learning and development movement. Corporations provide environmental exist; they believe programmes. they will be working products and services to those who express a preference. • Huge people costs drive the need for robust formal office hours metrics and analysis. Employee engagement, Managing people in the Blue World performance and productivity are all measured systematically. Leadership can access people • Companies have become the key provider of data on a daily basis. This also provides an early services to employees. People management warning signal of non-corporate behaviour or now encompasses many different aspects of below standard performance. employees lives’, often including housing, health • Technology pervades every realm of business and even education for their children. and leisure activity. The line between inside • This strategy has led to an increase in staff work and outside work is often blurred by retention rates as people policies seek to lock in technology with employers providing the talent, but the top talent is still hard to attract platform. This also provides employers with and retain, many senior executives use personal added insights to staff preferences. agents to seek out the best deals. Who leads people Organisational Employee profile 09 strategy? challenges
• The Chief People Officer (CPO) is a powerful • Quality assurance across the globe drives • People are graded and profiled at the age of and influential figure, sometimes known as the need to create consistency across the 16 and categorised for work suitability both the ‘Head of People and Performance’ who organisational supply chain. in terms of capability and individual sits on the leadership board. preference. • The challenges of size and scale mean that • Metrics and data are used to drive business these organisations are at greater risk from • The top talent is highly prized and fought performance through complex staff external threats such as technology over. In most cases people are linked to an segmentation strategies which identify terrorism or meltdown and they find it organisation by the age of 18. thousands of skills sets – creating precision difficult to effect change quickly. • University education is managed by the around sourcing the right candidates for the
• As companies try to reinforce corporate company according to the organisational Blue World right tasks as well as on the job performance values, these can often be at odds with career path chosen by the individual. measurement and assessment. cultural values and can present challenges. • At the top level, employees take far greater • The science of human capital has developed • Organisations must develop models and control of their careers; often senior to such a degree that the connection systems designed and run by HR executives have their own personal agents between people and performance is professionals which enable individuals and who represent them to find the best roles explicitly demonstrated by the CPO. their agents to negotiate the value of their and deals. • As organisations increase in size, their risk human capital based on employees’ people Managing tomorrow’s • Lower level employees are also taking management systems are similarly extended. personal investment strategies. active charge of their careers; they are • The people risk agenda is one which is taken aware of the value that their human capital seriously by the board – as a result, the CPO represents and are demanding about the and HR business partners become more circumstances in which they will invest. influential. • Those outside the corporate sphere find • Those responsible for people management employment choices are limited to smaller increasingly need financial, analytical, companies that are unable to provide the marketing and risk management skills to same level of development and financial measure the impact of the human capital in benefits. their organisation and to attract and retain the best talent. 10 A people management model for the Blue World
In the Blue World where corporate is king, the people and performance model below is the closest to what many leading companies are aspiring to today – linking HR interventions to improvements in business performance and using more sophisticated human capital metrics to evaluate corporate activity. Under this scenario the management of people and performance becomes a hard business discipline, at least equal in standing to finance in the corporate hierarchy.
Human resources: the current model People and performance: the 2020 model
Figure 2 11 Future view
Extract from a newspaper in 2016 People metrics are integral to analysts’ pricing strategies WORLD FINANCIAL NEWS 3rd April 2016 NEWS IN BRIEF
Italian pharmaceutical The quarterly report generating a much Blue World giant Como saw its will be looked at improved return on shares climb higher closely by companies human capital. yesterday in inside the industry and expectation of positive beyond. Many credit Mr Fabrizzi said, “You news in its quarterly Como’s unusually have to measure the results due next week. rapid rise and things you attach value The company, now dominance of parts of to. Measuring the people Managing tomorrow’s worth an estimated the sector to the way performance of our € 20bn has profited CEO Mario Fabrizzi people has allowed from the success of its manages the us to quickly make new line of statins in organisation’s human improvements to any Europe and America, capital, which the underperforming part but also in China, the company also reports of the business, to fastest growing on in detail. Last year make effective plans pharmaceutical market earnings per employee for succession and to globally. rose by 7% while costs return real value to our per employee fell 5%, shareholders.” Companies care: the Green World
Where consumers and employees force change
In a nutshell: Companies develop a powerful social conscience and green sense of responsibility. Consumers demand ethics and environmental credentials as a top priority. Society and business see their agenda align.
2010 2012 2013 2018 2020
The UK launches The US signs the India becomes a Hybrid or fully A group of the London Kyoto II agreement key player in the electric cars scientists confirm Carbon Trading and becomes a corporate social outnumber that the rate of Exchange leading advocate responsibility petrol-powered global warming for actions to agenda with a cars is slowing reduce the rate of focus on global warming preserving the Indian culture and heritage 13
94% components of the supply chain through vertical “We are integration. Rigid contractual obligations are in place covering every eventuality. developing an of respondents believe they will employer brand work across geographic borders How green are you? reflecting our more than their parents did. The audit process and quarterly company reports identity as an are characterised by a focus on measuring employer and Consumers drive corporate behaviour greenness detailing carbon emissions ratings, and
promoting our World Green The environmental lobby is so pervasive that carbon exchange activity, as well as the more companies must be quick to react to consumer traditional company valuations. This is an indication long term concerns about any aspect of their business which of the importance shareholders and investors place commitment could be deemed unethical. Clear communication on these issues which are reflected in the share and clarity about products and services is essential. price. with our employees.”
Big corporate fines people Managing tomorrow’s Supply chain control Hughes Fourault, Companies have strong control over their supplier In the business world ethical behaviour is the most Global Head of networks to ensure that corporate ethical values important attribute to attain and preserve. Brands Compensation, Benefits are upheld across the supply chain, and be able to can rise and fall on the basis of perceived green and International Mobility, troubleshoot when things go wrong. This has led to credentials, with government imposed corporate Société Général many organisations taking greater ownership of key fines for bad behaviour in this highly regulated world. Corporate responsibility is not an altruistic nice to have, but a business imperative. 14
90% Managing people in the Green World • New graduates look for employers with strong of US respondents environmental and social credentials; in will actively seek out response HR departments play a key role in developing the corporate social responsibility employers whose programme. corporate • Employees are expected to uphold corporate responsibility values and targets around the green agenda. Most are given carbon credit tokens which are behaviour reflects Working across teams in different locations used like ration books to be cashed in for therefore presents enormous challenges to their own. printing documents in hard copy, company global businesses, and the HR function travel and other anti-societal activities. dedicates significant energy to generating virtual • The HR function is renamed ‘People and social networks across the operation and the Society’, the leader being a senior member of client base. the company’s executive team. • Most companies provide staff with corporate • The need to travel to meet clients and transportation options between work and home colleagues is replaced with technological to minimise the need for car use. This has led to solutions which reduce the need for face-time. many companies choosing to relocate parts of Air travel in particular is only permitted in their operation to where people are based and exceptional circumstances and is expensive. out of big cities. Who leads people Organisational Employee profile 15 strategy? challenges
• The CEO drives the people strategy • Quality assurance and vigilance to • The common belief is that employees for the organisation, believing that the minimise risk is paramount. choose employers who appear to people in the organisation and their match their beliefs and values. The • The greatest threat to businesses in behaviours and role in society have a reality is that the talent pool for the this scenario is the possibility of direct link to the organisation’s brightest and best remains non-socially responsible behaviour success or failure. competitive, and whilst CSR rankings either within the organisation or in any are a factor, the overall incentive • The CEO works closely with the Head part of its supply chain. package remains all important. of People and Society (HPS) who, • Organisations operate in a highly Incentives however are not just with a team comprising a mix of HR, World Green regulated world, where employment reward-related; for example, they marketing, corporate social law makes it difficult to lay people off include paid secondments to work responsibility and data specialists, in line with market fluctuations. They for social projects and needy causes drives the social responsibility struggle to monitor everything across – a popular trend post-2010. programme. the operation to be compliant with the • Because organisations adopt a more • Employment law drives responsible ethical ideal for which they strive. But holistic approach to developing
employer behaviour and forces the being compliant is not enough: people Managing tomorrow’s their people, including personal HPS to develop innovative solutions in organisations are under pressure to development and measuring the times of downturn – such as sending raise the bar and establish policies impact they have on the wider world, employees on secondments to other and practices which go beyond employees are more engaged and as organisations where they can develop regulatory requirements. The danger a result are often likely to have a job their skills and contribute to the wider in such a regulated world is that for life. society, bringing employees back in companies are so preoccupied with when the economic environment compliance policies that the ability to improves. The HPS is therefore a be flexible and explore new well-networked individual. opportunities is hampered. 16 A people management model for the Green World
In the Green World where companies care, corporate responsibility (CR) is good. The CR agenda is fused with people management. As society becomes a convert to the sustainable living movement, the people management function is forced to embrace sustainability as part of its people engagement and talent management agendas. Under this scenario successful companies must engage with society across a broader footprint. Communities, customers and contractors all become equal stakeholders along with employees and shareholders.
Human resources: the current model People and society: the 2020 model
Figure 3 17 Future view
Extract from operating review G-Bank G- BANK Sustainable business report In 2020, it is a legal requirement that companies disclose their G-BANK recognises its statutory responsibilities under the environmental activity. This also Climate Change Act 2015, Ecosystem Change Act 2016, acts as a key differentiator when and all other sustainability legislation. We have been active recruiting and retaining talent. participants in the International Business Panel on Climate Change since it was established in 2010. Green World Green The group has adopted the European allowed G-Bank to retain its status as Sustainable and Responsible a AA+ company within the S&P Corporations guidance and has sustainability index. comprehensive company-wide policies Key environmental data is provided on sustainability, energy and climate below change, and responsible procurement. We require all suppliers to be certified Key Environmental Statistics 2020 2019 as carbon balanced and eco-friendly. Energy use – properties people Managing tomorrow’s During 2020 G-Bank made further Total energy consumption – Gw 1,015 1,200 changes in its energy providers in 25 Energy consumption/FTE – Kw 0.10 0.13 countries, so that 95% of our total Renewables as a 95% 91% energy consumption now comes from % of total energy consumption renewable sources. Our extensive use of videophone technology and virtual CO2 emissions – properties meeting software means that business CO2 – kilotonnes 21.0 21.8 travel has reduced by 75% over the CO2 – tonnes/FTE 0.21 0.23 past five years. In the last quarter of the year our Business travel environmental auditors completed their Total travel-related CO2 – kilotonnes 1.0 1.9 annual sustainability audit and issued Travel-related CO2 0.01 0.02 an unqualified opinion. This has per FTE – tonnes/FTE Small is beautiful: the Orange World
Where big is bad, for business, for people and for the environment
In a nutshell: Global businesses fragment, localism prevails, technology empowers a low impact, high-tech business model. Networks prosper while large companies fall.
2009 2010 2012 2014 2020
Facebook global Skill shortages Record number 71% of Europeans The California membership push up wages in of corporate shop at local Gaming Guild reaches 1 billion China, switching demergers and farmers markets, achieves record people the balance of spin-offs popularity of pay deal for its power to the supermarkets in 7 Star rated individual away steep decline contractors from the collective 19
0.6% Complex supply chains “Diversity is a Supply chains are built from complex, organic huge challenge, Only 0.6% of UK respondents associations of specialist providers, varying greatly but also a great think that they will mainly work from region to region and market to market. The solution is now not to outsource, but to fragment. opportunity. from home Looser, less tightly regulated clusters of companies Getting diversity are seen to work more effectively. Often functions A free economy are picked up on a task by task basis by ‘garage’ right will be a
operations, with each transaction bought and sold critical future Orange World Trade barriers come down creating a truly free by the second on one of a number of electronic market economy and countries such as China success factor trading platforms, with local and global exchanges. quickly realise that without embracing full for us.” free-market forces they will be unable to compete. Millennials drive technology use Peter Johann Networks are key The millennial generation, comfortable with Director Global HR
technology, is driving the usage of technology as Management people Managing tomorrow’s The dream of a single global village has been the interaction with services, government and work, BASF replaced by a global network of linked, but with an emphasis on choice and anti-monopoly separate and much smaller communities. The thinking encouraging innovations in this area. exponential rise in the efficiency of online systems for buying, selling and trading services and skills has debunked completely the old orthodoxy that economies arise from scale. Businesses are much smaller and roles are more fluid. 20
11.5% Labour market enters the guild era • Employees are usually aligned to guilds and access opportunities through professional In a tightening labour market individuals develop portals provided by guild networks – work of Chinese female portfolio careers, working on a short-term, can be bought, sold and traded in this way. contractual basis. They join craft guilds which respondents expect Employment contracts are flexible to manage career opportunities, provide training and accommodate staff churn and a rapid to have more than development opportunities. turnaround. ten employers during Managing people in the Orange World • Workers are categorised and rewarded for their career having specialist expertise; this has created • Organisations recognise that their employees increased demand for workers to have a and the relationships they have across their personal stake in the organisation’s success networks are the foundation of company with direct ownership share schemes and success. Companies seek to promote and project delivery-related bonuses becoming sustain people networks. This is achieved the norm. through incentivising employees around • Recruitment has become largely a sourcing achieving connectivity goals and collaborative function and has been merged with the behaviours. management of the huge number of contracts • As guilds become more important, they take on and price agreements required for each many of the responsibilities previously assumed company’s network of partner organisations. by employers including sourcing talent, medical insurance and pensions, development and training. Who leads people Organisational Employee profile 21 strategy? challenges
• People strategy is replaced with • Organisations are heavily reliant on • The responsibility for skills sourcing strategy, as maintaining the their external networks to deliver what development shifts wholesale to optimum supply chain of people is they need, and a combination of individuals. key to this networked world. watertight contractual agreements • People are more likely to see combined with a healthy degree of • The People Sourcing Director liaises themselves as members of a business trust is imperative. with expertise networks and guilds to particular skill or professional network attract what they need for the best • When a part of the network breaks than as an employee of a particular price. down, the smaller size of company.
organisations means they are able to Orange World • Employees rely on achieving high flex and adapt quickly to change. But scoring ‘eBay’ style ratings of past job the flip side of this means that the performance to land the next lack of company infrastructure and contract. resources to deal with sudden problems can be a challenge • Specialisation is highly prized and workers seek to develop the most
• There is also a strong emphasis on people Managing tomorrow’s sought after specialist skills to technology to support the supply command the biggest reward chain and to develop social capital package. and collaboration. 22 A people management model for the Orange World
Our third world is in many ways the most radical. In this world, economies are comprised primarily of a vibrant middle market, full of small companies, contractors and portfolio workers. People management is about ensuring these small companies have the people resources they need to function competitively. This allows an important role to be carved out for HR, one where the people supply chain is a critical component of the business and is strategically led by the HR function. But the flip side is that this could also see in-house HR becoming a sourcing or procurement function, with the high-end people development aspects of HR being managed externally by guilds.
Current model Operational model in 2020
Figure 4 23 Future view
Extract from employment networking site in 2020 In the Orange World, Workbook, an employment networking site, is used as a key route for people to find jobs, host their work experience and join networks Orange World Managing tomorrow’s people Managing tomorrow’s 24 Summary
A summary of Blue World Green World Orange World
the people Resourcing Long careers and career Holistic whole company Short-term careers. Lots of and planning. Succession plans for approach to manpower planning. contracting. HR strongly focused management Succession key performers. on filling fixed-term vacancies. characteristics Talent Strong performance focus Broad definition of talent. Minimal – key players in the in 2020 Management across all levels. Top talent have Competencies focus. central ‘core’ only, but liaison personal agents. with external agents crucial
Employee Engagement around Engagement around work-life Short-term engagement around Engagement performance and performance balance and social responsibility. projects. metrics. Heavy promotion of corporate culture attributes and behaviours.
Reward and Strongly performance-related. Focus on total reward over Contract based-pay for projects. Performance Pay for performance. Highly career life-time. Individual stake in projects as structured according to role incentive for contractors. segmentation.
Learning and Begins at school. Focus on skills Holistic approach to learning Minimal provision in house. Skills Development for the job – metrics driven. – much provided in-house. training via new crafts guilds. But secondments and paid sabbaticals for worthy causes are common
Table 1 are keytosuccess? create structures where agility, speed andflexibility formal networksinplaceof old stylehierarchies to larger organisations marketsand introduce internal lives willbecomefarmore pervasive?Willsome expectations ofthemillenials besuchthatportfolio entrepreneurial middlemarket?Will the work itself outflankedbyavibrant,innovativeand most radicaldeparture. Willbigbusinessfind The OrangeWorld insomewaysrepresents the agenda. have ahugeimpactwhenitcomestothegreen manufacturing sectors.Consumerpreference will green businessmodel,forexampletheretail and geographies) willtakeoncharacteristicsofthe agenda grows manyotherindustries(and firmly believethat,astheCSRandsustainability elements oftheGreen World forsometime.We The energy industryhasbeendemonstrating in thedirection oftheBlueWorld businessmodel. extent. We already seesomemultinationalsheading world, sometimeorsomewhere andtosome described inthisreport willfeature intomorrow’s highly plausiblethatallthree organisational models Orange orsomethingelseentirely? We believeitis What willtheworldlooklikein2020–Blue,Green, Are youready fortomorrow’s world? the office oronlocation,andwould haveonly people saidthey expecttoworkregular hours,from stability andregularity inachangingworld.Many truly surprisedusisthedesire inthisgroup for of onlyapartthemillennial generation.Butwhat The surveyweconductedis clearlyrepresentative relevant fortheplausible worlds oftomorrow. place isfuture proof, issustainable, sufficient and whether ornotthestrategyyoucurrently have in about howthesemightchangeinthefuture and Think engagement, developmentandlearning? reward, mobility, international employee management strategies;howare youaddressing at yourorganisation modelsandcurrent people complex. Ourmessageis:takealonghard look The worldofworkisgoingtobecomeevenmore “HR willcontinue bottom line.... against the how wedeliver itself inrespect of HR toquantify greater needfor will result ina objectives. This corporate delivering specific accountability for with greater the business, alignment to to increase its 25 Managing tomorrow’s people Are you ready for tomorrow’s world 26
...We will also need between two and five employers in a lifetime. But How can organisations plan for the equally let’s not ignore the Chinese women in our future of people management? to prepare ourselves sample who expected far more flexibility and to for a new generation have at least ten employers in a lifetime – perhaps entering the market these might be workers for the Orange World of the future. place. A significantly Our final message is to the HR function itself. We more mobile believe there is a significant opportunity for the HR generation with function to really own the people management differing expectations agenda within organisations, to truly drive strategy and have the tools and information to become one from an employer, of the most powerful and influential parts of the and we will need to business operation. But – and yes there is a but – we can also see that complacency and a failure by adapt to reflect this.” HR to take the lead could result in the function Michael Poulten being outsourced almost entirely, or absorbed by Personnel Manager line managers or into other functions such as Reward and Benefits finance or marketing. The fate of HR as a function Tesco Stores hangs in the balance. The challenge for HR is to figure out how to make itself relevant for tomorrow’s world.
Figure 5 surprises. about thefuture andplanfortheinevitable The process canhelporganisations thinkdifferently them topredict theMiddleEastoilcrisisin 1973. in thisreport. Shellfamouslyusedscenarios tohelp The result wasthethree worldswhich wedescribe number ofscenarios:plausiblefutures around each. mapped thesearound amatrixanddeveloped a believe willgrow inimportancethefuture. We currently affect businessandthosewhichwe School inOxford tothinkaboutthefactorsthat Science andCivilisationattheSaidBusiness We workedwiththeJamesMartinInstitutefor Scenarios A1 Appendix Definition after 1July2000. ‘Millennials’ asthosewhoentered theworkforce For thepurposesofthisdocument,werefer to worldwide.’ America, theAnglophoneworld,orpeople and whetherthesetermsare specifictoNorth that constitutesGenerationYandtheMillennials is muchdisputeastotheexactrangeofbirthyears Generation) usedtoidentifythesamegroup. There several terms(alsoincludingTheInternet immediatelyafterGenerationX…oneof born ‘Generation Y–atermusedtodescribesomeone Wikipedia says‘TheMillenials’are alsoknownas: Millenials 27 Managing tomorrow’s people Appendix 28 A2 2020: our methodology
Scenarios Our scenario planning exercise revealed that individualism, collectivism, corporate integration and business fragmentation would be the most significant factors affecting global business for the purposes of our study. We aligned these along two axes, around which we developed our scenarios further. We call these ‘worlds’. We began with four worlds: yellow, red, blue and green, with the yellow and red worlds straddling the top half of the We started our research by examining the forces quadrant. In these fragmented worlds we that currently affect global business and are likely discovered through our analysis that the differences to have significant impact on the future. Clearly across individualism and collectivism were hard to there are many social, environmental, religious and define in the fragmented world. Both of these demographic factors that will have significant worlds relied upon networks to survive, were, small, influence but we felt that some of these issues have nimble and adaptable. The motivations were the been tackled extensively in other studies. We chose only variant factor where the red world was more to focus on a number of potentially conflicting self-serving than the collective altruism of the factors which we feel have the greatest impact on yellow world. We decided therefore to combine our subject matter – people management. Initially these themes to create a single orange world which we explored the following eight forces: (see represented the fragmented business model. diagram opposite). Global forces 29 Appendix Managing tomorrow’s people Managing tomorrow’s
Figure 6 30 A3 PwC graduate survey findings
In July 2007, 2,739 Total China US UK graduates from China, the UK and Do you believe you will work across Yes 93.9% 97.2% 92.1% 92.9% geographic borders more than your the US were polled parents did? No 6.1% 2.8% 7.9% 7.1% about their Do you envisage using a language other Yes 52.7% 89.4% 32% 35.3% expectations of than your first language at work? work. They had all No 47.2% 10.4% 68% 64.7% been offered jobs Will you deliberately seek to work for Yes 86.9% 87.2% 90.2% 71.2% at PwC but had yet employers whose corporate responsibility to start. behaviour reflects your own values? No 13% 12.6% 9.6% 28.8% A mix of 74% 75.7% 71.8% 79% Do you think you’ll work...? locations Mainly from 4.6 7.4% 3.8% 0.6% home Mainly in an 21.2% 16.7% 24.3% 20.4% office
Not answered 0.1% 0.1% 0% 0% 31
Total China US UK
Mainly flexible Do you think your office hours will 13.9% 17.6% 12.9% 7.4% hours be…? Mainly regular 11% 7.1% 14.0% 10.0% office hours
Regular office 75% 75.1% 73.1% 82.5% hours Appendix
Not answered 0.1% 0.2% 0.1% 0%
How many employers do you think 1 8% 9% 8% 7.4% you will have in your career?
2-5 78.4% 74.4% 80.4% 79.6% Managing tomorrow’s people Managing tomorrow’s
6-9 7.9% 6.3% 8.5% 9.7%
10+ 5.5% 10.3% 3.2% 2.6%
Not answered 0.1% 0.0% 0.1% 0.6% 32 Acknowledgements Contact
There were numerous people involved in this Michael Rendell project both within and outside Partner and leader of Human Resource Services PricewaterhouseCoopers. Our particular thanks to PricewaterhouseCoopers LLP (UK) Angela Wilkinson and team at the James Martin +44 (0) 20 721 24945 Institute and to all the companies who shared their [email protected] views and insights. Sandy Pepper Our thanks to the core project team: Sandy Pepper, Partner/Project leader Cecilia Nordqvist, Matthew Blakstad, Leyla Yildirim, Human Resource Services Rachael Davison, Andrew Smith, Jackie Gittins, PricewaterhouseCoopers LLP (UK) Sonja Jones and the rest of the team who took part +44 (0) 20 721 34948 in the scenarios workshop. We would also like to [email protected] thank Sivaramakrishnan Balasubramanian, Indrani Karen Vander Linde Rana (India), Svetlana Kruglova (Russia), Shinya Leader, People and Change Yamamoto (Japan), Steve Rimmer (US) and many PricewaterhouseCoopers LLP (US) other contributors from across our global network +1 (703) 918 3271 of PricewaterhouseCoopers firms. Our final [email protected] acknowledgement goes to our internal human capital teams around the world who helped us to Leyla Yildirim conduct the graduate survey. Marketing Human Resource Services PricewaterhouseCoopers LLP (CI) +44 (0) 1481 75 2039 [email protected] separate andindependentlegalentity. of thenetwork,eachwhichisa global networkorothermemberfirms requires, thePricewaterhouseCoopers United Kingdom)or, asthecontext limited liabilitypartnershipinthe to PricewaterhouseCoopersLLP(a ‘PricewaterhouseCoopers’ refers All rightsreserved. © 2007PricewaterhouseCoopersLLP. decision basedonit. contained inthispublicationorforany to act,inreliance ontheinformation you oranyoneelseacting,refraining responsibility, fortheconsequencesof accept noliability, anddisclaimall members, employeesandagents PricewaterhouseCoopers LLP, its to theextentpermittedbylaw, contained inthispublication,and, or completenessoftheinformation or implied)isgivenastotheaccuracy representation orwarranty(express specific professional advice.No in thispublicationwithoutobtaining act upontheinformationcontained professional advice.You shouldnot interest only, anddoesnotconstitute for generalguidanceonmattersof This publicationhasbeenprepared
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