As companies have shifted their focus from reacting and responding to uncertainty to reshaping their workforce, we are seeing three clear priorities emerge across industries and geographies: addressing the implications of more permanent remote working arrangements, identifying and developing future skills, and addressing diversity, equity and inclusion.
These issues were the subject of a lively discussion among our human capital experts during a recent webcast (click here for a replay). This article will discuss these trends and actions companies can take now to begin reshaping their workforce for the future.
Rethinking the Future of Work
The COVID-19 pandemic served as a catalyst for us to reimagine the future of work: how our organizations work, where our employees can work, and how work could be done. Our recent COVID-19 HR Pulse Survey, conducted in December 2020 with 1,500 global respondents, found that two-thirds of firms now have focused taskforces examining the future of work – although far fewer have clear definitions of what the future of work will entail.
The reality is that the future of work isn’t an esoteric or ephemeral topic. It is something to be considered now and the practical actions need to be taken.
In reshaping organizations, we are currently seeing three strong trends:
- Rethinking workplace location strategies.
- Strengthening knowledge of workforce skills needed today and into the future, including how internal talent mobility can fill skills gaps and form part of talent strategy.
- Continued exploration of how organizations can create a more diverse, equitable and inclusive workforce.
1. Remote Working – the Way Forward?
Location strategy has a significant impact on the future of work. Sixty-five percent of organizations have moved three-quarters or more of their workforce out of the office and into home working since the start of the pandemic. However, only 23% of organizations expect to bring these employees back to an office.
Anecdotally, working from home has received mixed feedback. Initially, workers reported greater productivity but, as the months have progressed, productivity may have dipped.
Who Works from Home and Who Returns to the Office?
One challenge for organizations is exploring who to return to the office and considering individual preference and role needs. Interestingly, only 32% of organizations to-date have evaluated which roles can be performed successfully in a fully remote context, and only 18% of organizations have evaluated which employees can perform successfully in fully remote roles in the long term.
Remote Working ≠ Geographic Differentials to Pay
Many firms have expanded their remote working capacity but not all have modified their geographic pay differentials.
We have observed concerns even amongst firms that are currently implementing or considering geographic differentials. The most common areas were related to the potential impact on pay equity, required management training for a successful implementation and potential challenges related to internal communication.
Remote working is here to stay, and it is part of our new normal in the post-pandemic world. Consequently, location of the workforce will likely be considered more in connection with broader thinking about future working models in your organization.
Rewards leaders will be expected to form a view on it and determine what is right for their organization. HR leaders are now considering whether to differentiate pay or not based on the location of the employee; and if so, to what extent and how.
It is not an easy task and we observe different emerging schools of thought.
Bold Actions to Take
- Identify in-office roles and those capable of being completed away from the office.
- Reimagine working models and work through the implications for employees, real estate, technology and productivity.
- Consider implications for pay and reward.
2. Recognizing the Future Skills Needed – and Revisiting Talent Mobility
We’ve already seen the impact of automation on certain job roles within organizations. In the future, some skills will be obsolete while others will become more critical.
Aon’s Future Skills Framework has been built based on the latest research, client insights and data collected across our Human Capital Solutions group. It identifies those skills which drive the success and future readiness of organizations. Using the framework enables future skills to become more tangible to organizations and employees. It also offers a way to measure and benchmark current skill prevalence and how this compares to other organizations. It helps to provide an understanding of the speed of change and the skills trends within a company and also helps to understand how talent can be reskilled and redeployed.
Using this framework while working with a global bank, we have helped build an understanding of its current ‘future skills shape’, benchmarking with other financial services firms, evaluating the ‘shape’ alignment with the bank's current strategy and identifying measures to drive future success through skill development.
The Impact of Future Skills on Pay…
Understanding what critical skills are required for your organization is essential. Since buying skills from the market can be very expensive, developing your internal workforce can give you a competitive edge. Therefore, it is key to check that appropriate pay and bonus levels reflect current and future skills prevalence for individual contributors, managers and executive-level roles. Creating an environment where learning new skills is rewarded will help your organization to become agile and resilient to future challenges.
… And Talent Mobility
Knowing the future skills needed feeds into an organization’s talent mobility strategy. Skills audits and development plans guide people from one role to the next. Career paths will change, and greater ownership of progression and succession may be levelled at an individual’s door.
Bold Actions to Take
- Invest in understanding the current skills shape of your organization.
- Reach out to supplement your current talent data with market and industry data.
- Identify your talent with the potential to move to a future-focused role – and support their development.
3. Strengthening of Diversity, Equity and Inclusion
Organizations have been working for years to increase DE&I and the topic is continuing to gain momentum at board-level discussions. Its impact touches each part of an organization – from recruitment and pay through to talent development and succession planning. It continues to play a key role in helping organizations to build and maintain their competitive advantage and we believe that organizations can harness the power of data to support them on this journey.
Commitment to Pay Equity
As the economy and businesses in the UK head towards recovery, many companies are wisely taking this time as an opportunity to proactively address their rewards strategies and how they approach the employee experience. Conducting regular pay equity analyses will help identify problematic pay gaps and where there are opportunities for greater inclusion and equity within the workforce. The organizations that address these issues proactively will find themselves in a much stronger position with respect to their employer brand and overall employee experience.
Bold Actions to Take to Support Employee Experience
- Look again at how potential is defined within your organization, recognizing potential early on may result in a greater conversion of females into leadership roles.
- Broaden your talent and candidate pool by rethinking your attraction and recruitment strategy, ensuring internal hiring policies are gender neutral and inclusive.
- Flexibility is conducive to success. Organizations offering greater flexibility (flexible working/job sharing) within their business demonstrate a keenness to integrate better work and home life balance, allowing employees to participate fully regardless of role or seniority.
- Analyze your pay data, reviewing the distribution of males and females across your business by function and level, can help you to understand the gender imbalance in more detail. Reviewing this imbalance can help organizations identify areas where there may be talent blockages or areas for improvement.
- Prepare your company to go beyond gender pay gaps by addressing gaps by ethnicity. Efforts to foster more diverse and inclusive workforces continue to grow, meaning companies should look at pay inequities more broadly.
Using Data to Inform Actions
At the core of these three human capital trends is people data. It can guide organizations and offer important insights about what to do next. At Aon, data is the heart of all talent decision-making. We work with clients to collate their own data and combine it with our data, research and analysis to provide a framework for testing out concepts and mapping out options. It means that companies can start to make nuanced decisions about systemic issues, such as remote working, talent mobility and DE&I that will lay the foundation for the future of work.
The danger is that, by being overwhelmed or by seeking perfection, no action will be taken. We know that small, prioritized steps in the right direction now will yield dividends later. So, in the spirit of all things agile, keep things bite-sized and move forward.
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