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From the onset of civilization, the one thing that has been a constant is the evolution of work. The way we human beings have constantly evolved to adapt and adopt the changes around us is undeniable. From stone age tools to digital era of AI and virtual reality, the future of work has always been at a constant evolution. However, there are few pressing issues that organizations must address in order to avoid being obsolete.
Long before COVID-19 changed standard work patterns, businesses were already breaking long-standing traditions of where, when, and how people work. Even pre-covid workplaces have always been evolving incrementally but at a slower pace. Post-covid each sector, industry, and function has reinvented at a faster rate, with the pandemic acting as a catalyst in accelerating organizational change for achieving maximum development and sustainability. To create a future-ready workforce, it is crucial to cultivate a sense of belonging, improve human capabilities through digital technology, and increase workplace model agility. Further to lessen the pandemic's influence on our lives and businesses, there has been a noticeable mindset shift that has long and short-term decision-making strategies.
A global perspective has never been easy to cultivate, and leaders now confront greater problems because of increased protectionism, remote working, and evolving workplaces. It is crucial for organizations to consider the tipping points that could further speed up organizational transformation or adversely impact organizational growth in the next decade in a post-covid future (Techade). Determining which functions are core and non-core based on the company's strategy and acknowledged competencies is the initial step in changing how organizations can create value sustainably. Value analysis may address both immediate and long-term opportunities by coordinating actions across three prominent strategic areas of focus: process cost optimization, operational model transformation, and digital & cognitive reinvention. However, the key to delivering value and impact for all stakeholders, in the long run, is decoding sustainability.
Technology has always been a major enabler in the evolution of workplace design. This now encompasses a vast array of business-related technology. Digital Transformation has enabled organizations to create fresh business platforms on which they can compete and focus on long-term adaptability and sustainable value transformation. Future workplaces are predicted to be significantly influenced by data, automation platforms, and techniques like Metaverse, AI (Artificial Intelligence), robotic process automation (RPA), and intelligent process automation (IPA).
The future workforce, Gen Z has high expectations from the workplace than any generation and is an important turning point for organizations to rethink their workplace models and policies in 2023. Gen Z gives more priority to higher salaries, shared values, flexible work hours, and better mental health support. In addition to being aware of what they want, they frequently look for creative ways to achieve it. A company can become a desirable place to work and foster a sustainable culture with a high happiness index by finding the ideal balance between hybrid work and strong inclusion. Integrating Diversity, Equity & Inclusion into every aspect of the employment experience, providing learning opportunities, and leadership empathy are the pathway to success in the Techade.
Future of Work – Tipping Points
2) Future of Work
2.1 Change in Legacy Mindsets
Over time, as a global community, we have continually improved in terms of our attitudes, actions, technology, and organizational strategies. But even before the pandemic, cultivating a global perspective had never been simple. Leaders now face more challenges, due to rising protectionism, remote working, and a dynamically changing working environment.
To achieve maximum growth and sustainability, each sector, industry, and function will need to reinvent itself. According to Everest Group’s study, it is essential to foster a sense of belonging, enhance human skills through digital technology, and increase workplace model agility to develop a workforce that is prepared for the future. There has been a discernible mindset shift leading to short-term and long-term ramifications in order to lessen the pandemic's impact on our lives and enterprises.
The GBS community and service providers are already optimistic about WFH's long-term uptake. After COVID-19, they intend to have roughly 60% of the workforce working in a permanent WFH and hybrid model combination. The issue is that just 21% of workers are now engaged at work. Instead of relying merely on compliance and enforcement, leaders will now need to concentrate on addressing the underlying thoughts, attitudes, and beliefs that ultimately determine whether employees, clients, and other stakeholders will change. Understanding people's deeper motivations and mentality shifts is necessary.
The two primary forces driving the shift to a boundaryless workplace are technological innovation and employee perceptions. As their attitudes toward work have changed, employees now select workplace models that best suit their requirements and overall well-being. Many employees presently believe that having the option to work remotely is a fundamental right. Around the world, 64% of workers said they have already considered (or would consider) looking for a new position if their employer asked them to return to the office full-time. With this mindset change, value delivery needs to be reassessed.
2.2 Rethinking Organizational Value Delivery
Highly strategic organizations use challenging times to reposition themselves for an unknown future through value analysis. Three broad categories that address near- and longer-term opportunities are capability and process cost optimization, operating model transformation, and digital and cognitive reinvention. During epidemics, organizations need to focus on stabilization and rapid cost transformation opportunities, which will give way over time to adaptation and value transformation. Value transformation is a crucial tipping point that comprises three major phases: survive, transition, and thrive. By taking the right steps now, companies can quickly transition to growth and thrive after an unexpected disruption, lessening the impact of the survive and transition phases.
IBM – Scope of Digital Reinvention Impact
A) Process optimization and benchmarking
Organizations can optimize their processes and benchmark their operations against peers, industry leaders, and potential improvements to reduce costs and stabilize cash flow during crisis. They can use component business modelling to identify high-value functions and processes, such as those that enable business continuity and improve work flexibility, customer-facing experiences, and remote work technology, policies, and culture. Longer-term, companies should fully support their existing employee base and weigh the impact of headcount reduction against organizational capacity and employee morale. They should also assess policies, data security, and privacy protocols to align with new work realities and build a resilient workforce. To determine the appropriate level of organizational capacity, companies can consider vendor negotiations, direct and indirect spend reduction, and IT spend optimization, which can create a more desirable long-term impact.
B) Operating model transformation
The COVID-19 crisis has prompted companies to re-examine their operating models and implement changes in the short term to stabilize their cash flow. Companies are prioritizing business continuity and leveraging virtual ways of working for both core and non-core functions. Non-core functions like personnel administration, payment processing, and accounts payable and receivable can be centralized, automated, or moved to a shared services model. Companies can invest in migrating applications and workloads to the cloud, transitioning applications to open-source software, and automating repetitive tasks using approaches like robotic process automation to increase cost efficiency and free up workers for more complex tasks. In the longer term, companies should consider establishing Centers of Excellence (CoEs) around core technologies, critical processes, or applications to bring together cross-disciplinary teams, promote consistency and governance, and define scalable and repeatable solutions. A resilient organization will match staffing with areas ripe for rapid growth and embed agile principles in the way its employees work to focus on more cost-effective outcomes aligned with changing market conditions. Companies can also gain flexibility and variable cost through business process outsourcing and/or developing a contingent workforce where appropriate. By being alert to the possibility, new virtual ways of working may reveal unanticipated opportunities to decrease cost and improve productivity and morale.
C) Digital and cognitive reinvention
Organizations can initiate digital and cognitive reinvention in the short term by leveraging ready-made platforms and established capabilities to stabilize their operations and create value transformation opportunities. Cognitive call centers, for instance, have helped companies address personnel restrictions and maintain service levels during the COVID-19 crisis. In the long term, the integration of cognitive technologies enables organizations to build new business platforms that can drive sustained value transformation. Intelligent workflows can optimize business processes using exponential technologies, resulting in significant cost savings, improved quality, and worker safety. Advanced chatbots and AI-enabled content curation tools can enhance employees' skills and capabilities. By partnering with ecosystem partners, organizations can create digital platforms that enable them to compete in new ways, expand into new markets, and mitigate gaps.
2.3 Decoding Sustainability to deliver Value & Impact
Executives are under tremendous pressure to deliver both a monetary return and a lasting, equitable impact with one of the reasons being that 74% customers believe that ethical corporate practices and values are an important reason to choose a brand. A stronger push for change has been provided by the COVID-19 epidemic and social and economic turmoil as a result of the crisis, which has made progress towards the UN's Sustainable Development Goals more difficult (SDGs).
Leaders in business are aware of the difficulty. For instance, 73% of executives in an Accenture 2020 poll stated that their company's top aim for the following three years should be to become a truly sustainable and responsible organization. Significant organizational change, including a rethinking of business models, operating models, and talent strategies, is necessary to realize these goals.
Organizations all across the world are further leveraging digital technologies to source, produce, and distribute products and services in a sustainable manner. Businesses are also making significant investments in ESG strategies and innovative technologies, understanding that sustainability cannot be achieved in isolation. An organization must consider its value chain, where opportunities for sustainable development can be found at every stage of an upstream and downstream process.
To benchmark and measure progress, the "Sustainability DNA" a set of management techniques, methods, and mindsets that span process, people, and culture can be utilized. It is made up of 21 practices that are divided into 10 enablers and promote human collections, collective intelligence, and accountability at all levels (Refer infographic below). Companies with a stronger Sustainability DNA typically provide more financial value and have a bigger influence on society and the environment.
Accenture – Components of Sustainability DNA
2.4 Digital Transformation & Innovative Technologies
Technology has always been a key enabler in developing workplace design. This now includes a wide spectrum of business-related technology and goes well beyond different layers of the organization’s operations. PwC Global CEO Survey states that 54% of the organizations worldwide have included automation and digitization objectives in long-term corporate strategies, indicating that this rise is expected to continue. By reimagining or enhancing the digital workplace models to support hybrid work patterns, leaders can set up a system to understand how employees contribute most effectively to the business.
The amount of data generated by businesses in every sector is unprecedented, and it’s those organizations that can quickly extract usable, accurate insights from their data that stand to gain a competitive edge, reduce costs, make better decisions and improve products/services. For example: Data collected from loyalty programs, credit card transactions, social media can give the retailers a 360-degree view of the customer.
Automation platforms and tools like robotic process automation (RPA), intelligent process automation (IPA), and robotics are already on the rise, and these technologies are expected to play a significant role in the workplace of the future. The technological acceptability of an organization differs between the sectors in which it operates. In order for an industry to advance and provide satisfied client experiences, operations that were once believed to be only able to be completed by people are now being carried out by robotics and other semi-autonomous technology, particularly in the banking, healthcare, and manufacturing sectors.
McKinsey's State of AI report highlights that 56% of organizations use AI in at least one function. In growing economies, such as China, the Middle East, and North Africa, this figure jumps to 57%. AI is positioned to make more advancements, specifically in areas like Metaverse, where virtual reality and augmented reality technologies are enabling teams co-create flexibility patterns while fostering empathy and delivering a better user experience to customers. Shared virtual environments will meld with the real world, revolutionizing training, communication, and business.
As NLP advances, so do chatbot capabilities, enabling interaction with users more organically and enhancing customer service while freeing up employee bandwidth to handle challenging consumer inquiries. By 2030, the market for conversational AI is expected to generate USD 41,890 million in revenue, growing at a CAGR of 22.20% between 2022 and 2030. In the Healthcare industry, chatbots have helped patients by providing the necessary solutions, freeing up healthcare professionals to concentrate on other pressing responsibilities. In addition to engaging patients, AI healthcare solution also provides them with care and improve turnaround time.
Digital transformation has also significantly impacted employee experience, which is influenced by how employees engage, communicate, and collaborate. In fact, 74% of organizations made additional investments in digital initiatives after the pandemic. Using modern technologies to enhance team building, mitigate recruiting bias, ideation, work-life balance, and upskilling will significantly boost employee perceptions of their firm and raise customer and employee satisfaction, specifically for the younger generation. IBM claimed to have saved close to USD $1 billion since 2011, by integrating technology into human resources processes.
2.5 Gen Z transforming the workplace
Gen Z is entering the workforce at a key inflection point in the evolution of work and at the tipping point of organizational change. They are a generation of go-getters who are driven by a desire for personal fulfilment, a sense of purpose, and a commitment to making a positive impact on the world. They were born into a world with instant gratification, with social media and are more connected than any other generation in history. One study conducted by The Workforce Institute at Kronos and Future Workplace found that Gen Z is the most optimistic and self-reliant generation in the workforce today but anxious about their abilities to be successful workers. They are more likely than previous generations to take ownership of their careers and seek out opportunities for growth and development.
A first job was once considered a stepping-stone in a corporate career but it required starting at the bottom of the ladder, learning how organizations operate while performing tedious but necessary tasks in order to enhance professional abilities and competency. They are more likely than previous generations to take ownership of their careers and seek out opportunities for growth and development. But everything has changed now as many of the manual and repetitive duties have been replaced by technology and automation. Gen Z seeks more flexibility and benefits from organizations as compared to other generations. Innovative companies must recognize this impact and develop plans to support Gen Z in any manner conceivable keeping in mind their emotional maturity.
For the workplace, this upcoming generation has slightly higher expectations. They place a higher priority on higher income, shared values, flexible work schedules, transport accessibility, and improved mental health support. They are entrepreneurial, self-reliant, and optimistic about their future, and they are likely to continue to be a major force in shaping the future of work and society as a whole. Not only does Gen Z know what they want, but they also tend to look for innovative ways to acquire it, but at the same time are more severely impacted by excessive levels of stress and anxiety when their purpose is not clear. (Refer Infographic below for Factors affecting ability to work for Gen Z)
McKinsey & Company – Factors affecting ability to work for Gen Z
According to the Deloitte Global 2022 Gen Z and Millennial Survey the top reasons for leaving a job were better work life balance, learning opportunities and high salary. In comparison to other generations, Gen Z prioritizes diversity more than any other group. Building inclusive work environments that embrace all kinds of identity is necessary to meet the increased standards of diversity and justice sought by Gen Z. The implementation of new corporate policies must support a genuine dedication to reduce burnout, build employee resource groups, and more diverse leadership. Gen Z can also gain from the implementation of soft-skill training and reskilling initiatives, which will also boost overall retention.
2.6 Reimagining Organizational Culture & DEI (Diversity, Equity & Inclusion)
Fostering a culture that enables an organization and its workforce to prosper while working remotely is of paramount importance in the next decade. Forward-thinking companies are now considering hybrid working models offering cost-cutting and productivity, rather than doing so to protect their employees.
Finding the right balance between hybrid work and strong inclusion can make an organization a highly desirable place to work. However, doing so requires leaders at all levels to listen, coach, and think of flexibility as a set of evolving expectations with regular adjustments, possibly down to the level of individual employees. The secret to creating an enduring organizational culture is to rise in the upcoming years from the tipping point of organizational transformation well supported by leadership built on psychological safety, trust, and emotional intelligence.
According to the Work Wellbeing 2022 Insights Report, managers have a crucial role to play in ensuring that people are happy at work. 19% of respondents said that their managers were responsible for their happiness, whereas 25% believed that the CEO & top management played a critical role in the organization’s happiness index.
Work Wellbeing Report - Individual happiness at work is a shared responsibility
Establishing a clear framework for work process improvement and creating evaluations that enable individuals to pinpoint their own professional and personal values for their well-being with autonomy and structure their work environments around them can help to build a healthy workplace culture. Integrating DEI into all aspects of the employment experience and providing ongoing DEI learning opportunities while measuring DEI progress will be the key to success.
3) Conclusion
Organizational change management is moving at an accelerated pace like never before and businesses need to re-evaluate their workplace models considering the impact of various crucial tipping points and sail through them to accelerate the adaption to the dynamically changing work environment to not become obsolete. The tipping points of the future of work are all interconnected and influence each other in some way or the other. For instance, digital transformation can impact organizational culture by requiring organizations to be agile and adaptable to change, while sustainability can impact value delivery by making it necessary for organizations to reduce their carbon footprint while still delivering value to stakeholders. However, the magnitude of the impact of each tipping point for an organization will be different and depend on various factors such as their industry, business model, and organizational structure.
Switching to new working paradigms where talent is not confined by geographical limits while considering the expectations of employees, particularly the younger workforce is essential. The pre-pandemic paradigm of value delivery is no longer viable and sustainably delivering impact and value is the top focus of executives. For businesses to maximize employee potential sustainably and surpass their operational goals over the next decade, they must work in tandem with digital transformation, leverage data & analytics, and cutting-edge technologies like AI, RPA, and others. These initiatives involve developing a more adaptable workforce and fundamentally changing the way work is done, all while fostering a strong organisational culture, with a focus on Diversity, Equity & Inclusion (DEI), and the needs of the newest generations (Gen Z).
Therefore, organizations must analyze and understand the specific challenges and opportunities they face and develop strategies that address these tipping points in a way that is most impactful for their unique situation.
Disclaimer: The research and statistics presented in this paper have been obtained from various industry papers, research studies, and reputed analysts. The views expressed in this paper are solely those of the author(s) and do not necessarily reflect the opinions or positions of any organization, group, or individual. The information presented in this paper is for general informational and knowledge-sharing purposes only and should not be considered as professional advice. The author(s) do not take any responsibility for the accuracy, completeness, or timeliness of the information provided in this paper. Readers are advised to conduct their own research and analysis before making any decisions based on the information presented in this paper. However, we have ensured that any research or statistics highlighted are properly cited and from reputable sources to maintain the integrity and accuracy of the information being presented.
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Abuzar is a key strategist, solution-focused technologist, and tenacious leader with over 22 years of progressive leadership across evolving technologies and multiple industries. He is an established leader who has received numerous accolades for his exceptional work ethic and ability to surpass expectations. He believes in developing high-performing people and teams, that will in turn deliver value-driven solutions. With a degree in Master of Business Information Systems from Victoria University and a Bachelor of Engineering in Electronics from Bharati Vidyapeeth, Abuzar began his career as an R&D engineer, and swiftly advanced to senior leadership positions across various teams, organizations, and locations. Abuzar has always strived to build an inclusive workplace, where people from diverse backgrounds and abilities feel welcomed and valued for their contributions. He firmly believes that taking care of people, and the community is the culture of stewardship and our purpose.
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