Future of Work: Top Trends for 2022
The covid-19 pandemic thrust changes on humanity, regardless of whether we were ready for them. The world of work has also undergone drastic changes over the last 21 months. Many businesses have been rendered unviable, while those that have survived are constantly recalibrating their business models to respond to expectations in real-time. Given how dramatically the context of work and workplace has changed, and how ‘uncertainty’ has become the new ‘certainty’, leaders and organisations that they lead need to deeply internalise a culture of agility and flexibility. As companies navigate this protracted period of unpredictability, they need to keep a close eye on some of the emerging trends that, in our view, will define work, workplace, and workforce in 2022. If the hybrid-work model is going to become a permanent feature, jobs, as we have known them traditionally, are likely to disintegrate into projects, even as automation accelerates amid likely labour shortages.
Here’s a look at the key trends as the pandemic enters its third year:
Designing long-term hybrid work model
In the pre-Covid era, many organisations considered work-from-home (WFH) a flexible option offered to employees. However, the pandemic forced us to rethink the way we operate and WFH became a necessity. Video platforms and collaborative tools emerged as an effective medium to communicate, stay connected, and remain productive.
The shift from physical workspaces to virtual ones, although abrupt, has taught organisations the power and ability to adapt fast, prepare for adversity and find innovative solutions.
The pandemic has changed the way business processes are implemented, and also forced them to reinvent their working models, as a full return to office will likely pose numerous challenges. Employers are experimenting with new work models like hybrid working, gig working, and part-time working, with the hybrid model of working emerging as the work model of the future.
The hybrid working model has already become popular - and productive - and is almost certain to become a permanent feature for organisations that realise that a flexible work culture will enhance employee productivity, satisfaction, and work-life balance. In many cases, the hybrid work model, driven by secure and agile technology, has proven to be effective for both companies and their employees.
A fluid workplace is emerging as the norm for the future. The fluid workplace of the future places little importance on location or geography, and employers will explore various work models to stay competitive. As per the Randstad - Future of Work Report, new work models like gig working (use of contractual workers and freelancers), hybrid working, and part-time working are in the exploratory stage while outsourcing jobs to agencies/partnering with companies emerge as a norm. However, employers may still construe freelancers as unemployed, and hence a full-time worker is apprehensive about making this transition.
According to a global Capgemini Research Institute study 'The future of work: From remote to hybrid' on 500 organisations and 5,000 employees across the US, Europe and Asia, ‘three-quarters of organisations expect 30% or more of their employees to be working remotely, and over a quarter expect over 70% of staff to work remotely'.
Across organisations of various sizes, sectors, and hierarchies, it is, thus, not surprising that many leaders have initiated changes towards adapting to the future of work making hybrid as part of their work design. And most of the initiatives will be designed implemented with an employee-centric model of work. This will help meet workers evolving needs
Dealing with labour shortages and rising wage growth
A survey in November by The Conference Board, a US-headquartered non-profit, forecast a 3.9% jump in wage costs for the US firms in 2022, compared to a 3% rise predicted in April. This is an indication that wages are likely to increase through to next year, driven primarily by labour shortages. Even a note from S&P Global economists, led by Beth Ann Bovinos, supports this line of thought by observing that it will ‘likely remain tough’ to find workers in 2022, and those workers will cost businesses more. This phenomenon of labour shortages and resultant wage growth is likely to play out across geographies and economies in varying degrees.
But with inflation accelerating, wage growth for workers could become less consequential. While talent war does play a significant role, a major role is being played by inflation especially in the US. It has been reported that wage growth is expected to occur across all levels of the organisation. The argument for wage growth can indeed rest on employee retention, especially of new hires, as talent continues to shuffle through and switch jobs but organisations have to be mindful of wage compression. In the drive to hire fresh talent, current employees must not jump ship. What is also important to factor in is how much of an increase there is in the real salary and how much is to keep up with inflation rates. This is evident by how in ECA’s Annual Salary Report, the predicted average increase after inflation lands at 1.9% in APAC while the global real salary increase is forecasted to be an average of 0.9%.
Culture transformations - aligning individual and community values
Over the last 21 months, organisations have had to realign their business processes to ensure business continuity, engage remote workers and create a workplace culture that encourages continuous learning. Amid the various trends that impacted the workforce, the acceleration of digital transformation and the 'great resignation saw a spike with employees leaving organisations for multiple reasons. One of them is why organisations are finding it critical to articulate their purpose and values. Employees today expect their jobs to be a source of purpose.
There are a number of other shifts in organisational culture that have now become central to business operation - from an increased focus on well-being and health, rethinking innovation at work and identifying ways of continuously learning.
As companies navigate new priorities, embrace new modes of working and introduce new workforce arrangements - including increased remote jobs and a gig workforce, workplace transformations are going to be a continuous feature of work. This is a journey that will take time for a lot of organisations depending on their maturity.
HR - setting trends and fueling organisation-wide change
For over a decade, we continued discussing about HR getting a seat at the table and HR being a business leader. The time has now arrived. HR leaders today are demonstrating a never-before transformation. In 2021, as businesses realised the importance of people, the role of HR professionals emerged stronger than ever before. As the pandemic put everything on reset, HR leaders have already started reimagining workforce and employee planning, performance and experience strategies. In 2022, all the planning and conversations will make an indelible mark with the actions of people leaders.
Leading the way with new practices best for both business and people, challenging the status quo, and bringing the important matters of people and community to the forefront, HR professionals will act as trendsetters and role models in 2022.
The HR function will take on a new role influencing many other aspects of the business. Walking on the tight ropes, they will seek to create more balance in business and employees’ priorities, while also focusing on social responsibility and embedding sustainability, as they become the key drivers of businesses.
Rise of AI, and integrated talent and work management solutions
Mckinsey reports that by 2024, Artificial Intelligence-generated speech will be behind more than 50% of people’s interactions with computers. This will clearly impact the HR landscape as well. Over the past few years, we have seen how integrated technology systems have made inroads into organisations simplifying managing performance appraisals, employee benefits, learning, and recruitment. Managing all these discrete jobs are found to be time and resource-consuming and hence companies started leveraging integrated HR and work technology solutions that streamline work processes. Enter 2022, organisations will further spruce up their technology landscape to easily manage workforce management - be it in terms of onboarding, attendance, payroll or even employee experience. In 2021, we have seen AI in action primarily in the area of recruitment. The next-generation technology has played a dominant role in the borderless talent hunt which is only going to scale up in the coming days as organisations hire to bridge skill gaps and keep pace with the accelerated digital transformation.
If 2021 has seen the mass exodus of people, the year 2022 will see organisations strengthening their workforce management strategies by leveraging new technologies. Technologies such as AI, advanced analytics or automation will act as a strategic lever to deepen relationships with customers, come up with new business models, and more efficient processes.
Renewed focus on business sustainability and cybersecurity
When the pandemic first struck in 2020, not many businesses were prepared. Mercer research showed that near the beginning of the outbreak, more than half of businesses globally did not have a business continuity plan (BCP) ready. But those with a BCP in place were much quicker to adapt and recover. Organisations without BCPs soon hurried to develop and implement their contingency plans. Now, with resilience recognised as a major priority, business sustainability will continue to be a significant, if understated, trend in the year to come.
In 2021, cybersecurity has also emerged as a critical subset of resilience, especially in the remote working world. The number and frequency of cyber-attacks soared over the last two years as attackers took advantage of digitalisation and the remote working trend. Today, cybersecurity is one of the most coveted skill sets in many industries and will continue to be an area of focus - and concern - for knowledgeable organisations in 2022 and beyond.
Meeting well-being needs and ensuring talent diversity/inclusivity
While the virtual world maintains the physical distance among colleagues, the past year has witnessed a greater demand for narrowing the emotional gaps in understanding and experience at the workplace. While COVID-19 saw employers come forward and support the physical health of the workforce with helplines and resources, it also put the spotlight on emotional needs, the absence of which could paralyse workplace culture. The focus on mental health and efforts to provide access to medical help, beyond conversations on destigmatising, saw greater acceptance from organisations, big and small, across the globe.
Employers have recognised the need for a thoughtful and compassionate outlook towards both work and the workforce, making way for newer ways of working that foster a sense of well-being and inclusion for one and all. Interestingly, the physical distance forced by the pandemic fueled a monumental shift in mindset, one that today acknowledges and embraces the need for social well-being and inclusion. While several policies and practices have been introduced to address concerns in the two segments, how employers enable a shift from mere lip service and documented policies to an everyday reality for each and everyone will be core to sustainable well-being and inclusion.
Increased dependency on contingent workers - the flexible workforce
Over the last two years, the gig economy has grown significantly. As concerns over the global attrition intensify, companies are inclining more towards the gig economy. Globally, gig workers have created a buzz with their raised voices to include them under the labour laws to ensure social security.
The gig workforce is already in high demand among the developed economies and the developing economies are also not far from this. According to a report by ASSOCHAM – an Indian non-governmental trade association and advocacy group, India’s gig sector, for instance, is likely to grow to US$455 billion at a CAGR of 17 per cent by 2024. It has the potential to grow at least times the pre-pandemic estimates. Also with the talent pool constrained with uneven border restrictions across different countries, organisations globally are likely to leverage this pool of foreign manpower to fill the rising job vacancies.