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Human Capital Trends 2021 European Special Report
A deep dive
In this special episode, our experts deep dive into the key stats from Deloitte's European Special Report, to highlight the most important trends to watch in 2021. From Re-architecting work, to worker wellbeing, reskilling and superteams, our experts discuss all!
Humanising the Future of Work podcast
Host: Sam Shindler-Glass
Speakers: Jonathan Eighteen, Director at Deloitte, Melissa Bramwell, Director at Deloitte
SSG: Hello, and welcome to the Future of Work Podcast special on the European Human Capital Trends Report for 2021. I’m Sam Shindler-Glass, and I’m delighted to be joined by Melissa Bramwell and Jonathan Eighteen, two directors in our HR consulting business. Let’s get straight into this. Melissa, as the author of this report, what are the key headlines for you?
MB: Hi, Sam. I think, for me, one of the really interesting findings is that, throughout the five trends we see shaping the future of work in this report, the unifying thread is really the need for leaders to prioritise the abilities and adaptabilities of their workers, by humanising work.
And I think, really, the challenge now becomes how we sustain the momentum wet’ve created over the past months, to discover new ways to thrive in the longer term, even as we know theret’s going to be constant disruption resetting the path forward.
I think one of the really interesting stats we got from the report was that, in Europe, 54% of execs will be focusing on reimagining work in the next one to three years, versus 28% pre-COVID. And I think this really tells us that leaders are shifting their focus away from work optimisation and redesigning, towards reimagination, which is really fundamentally different to what wet’ve seen before.
Previously, it was doing the same work more efficiently, or achieving the same work outputs, with new combinations of technology and people. Reimagining work is much more about achieving new and different work outcomes, with new combinations of technology and people.
And I think, linked to this, COVID-19 has taught organisations that team and technology are even more important to thrive amid constant disruption that we might previously have realised. And our trend on the super team is really towards integrating humans and technology into super teams that use their complementary capabilities to rearchitect work in more human ways.
And I think the thoughtful use of technology really makes it possible to change the nature of work, so that it makes the most of people’s distinctly human capabilities. And the power of human potential is undoubtedly one of the strongest themes we’ve seen in this year’s report.
And if I can just touch on one other trend that I thought was particularly interesting, workers’ wellbeing has always been really important, but I think the pandemic has really meant that ensuring employees are physically and mentally healthy has been more important than ever. And companies have generally done well in ensuring that their workers’ wellbeing during the pandemic was being looked after, but I think there’s real scope for more.
And wellbeing at the core of an organisation’s strategy can really prove a key differentiator, particularly when becoming a preferred destination to work. And as work itself is changing in a rapid pace, the way organisations support individuals and teams needs to adapt in tandem, and we’re seeing organisations look at ways to really embed wellbeing into work.
SSG: And that seems like it’s going to be a core part of reimagining work, that you talked about earlier, is how wellbeing gets integrated into that. A recent Deloitte survey showed that 42% of people said that they wanted to work from home two days a week moving forward. Out there in the news, we’ve seen everything from big banks saying they want people on site five days a week, to people going fully remote. What do you make of results and comments like these? And what’s the imperative of organisations to help individuals realise that?
MB: I completely agree, Sam, we’ve seen lots of announcements for organisations about the future of work, whether it’s remote-first, whether it’s hybrid working, or predominantly on site.
I think the new world of work is really about emphasising creating the conditions for people to be successful wherever they are, and judging them on their outcomes. And actually, in our trends report, 73% of executives said that they were confident that today’s remote work practices would be sustainable in the future.
And when we asked them about what factors they thought were most important in making it sustainable, they chose options intrinsic to the design of work itself. So, allowing for personal choice in determining how work gets done, introducing digital collaboration platforms, and establishing new scheduling meeting norms, all of which directly embed wellbeing into work.
I think, on the topic of hybrid, hybrid working comes with big opportunities and challenges to productivity. Increased employee flexibility often encourages productivity, but logistical and technical difficulties can hinder it. And we’re seeing increased levels of employee engagement and interactions, as organisations really look to understand what their workforce want.
Some firms are using it as an opportunity to drive their employee value proposition and becoming a more attractive employer. And we’re also seeing that hybrid working can break down barriers for talent, and help people participate in more inclusive ways. But I think we also need to be cognisant of the challenges.
And there are risks to organisations that rush into hybrid working models, without taking the time to think things through and look at the supporting data. I think what we’re also seeing, where organisations are successful, is that they’re piloting alternatives, assessing and iterating them before they implement them more widely in organisations.
And I think also, in many cases, or certainly in some cases, we’re seeing that leadership can be among the most vocal in advocating for the return for work, which I think can sometimes be associated with a lack of trust. And that can obviously create tensions between the leadership, what they want, and what the employees want. And reflecting on that, I think what’s really important is to recognise that the return to the office is not the future of work, and that hybrid working isn’t a one-size-fits-all approach.
There are tensions and there are significant considerations that play into it, but I think it’s imperative for organisations to look at the longer-term vision, to be agile to learn and to iterate as they go, what works best for their people and for their organisation.
SSG: Yes, that makes sense. And the core to that future of work is going to be the future of skills, and, Jonathan, this is your speciality. In this year’s trend survey, European executives identified the ability of their people to adapt, reskill, and assume new roles as the most important factor in navigating future disruptions.
Now, historically, you’re training people in certain roles. You’ve been able to see their progression, potentially through exams or quite tangible elements. But adapting, reskilling, and assuming new roles are all quite intangible, so how can organisations be confident that they’re instilling such intangible skills in their workforce?
JE: Thanks, Sam. It’s a good point, and I echo all of Mel’s comments earlier on with regard to the trends and, indeed, how wellbeing is playing out. But before we start and dive into that question, I think it’s really important to recognise that, through the pandemic, organisations have really pivoted quite dramatically, and there’ve been some very remarkable displays of individual and team re-invention.
I’m just thinking at a very broad level, we’ve seen retail organisations move their staff from sitting in shops and working in those areas, to operating remotely and still managing to deliver.
We’ve seen life sciences firms and selling in general, where you need to go into various different locations, completely pivoting to virtual. We’ve seen some organisations dramatically change what they’re focused on, and focus on new areas, new products, new areas to support pandemic support, or to create new value for their organisation.
So, what has been seen is that reskilling can move at pace, and has moved at pace, at an individual level and a team level during the pandemic.
It’s not a surprise to me that, when we did survey people, 42% felt that building an organisational culture that celebrates growth, adaptability, and resilience, is absolutely crucial. And then, the second most important factor was building workforce capability through upskilling, reskilling, and mobility. So, not surprising. I think those two things would probably be there, but they may not be as acute as they were during the COVID times that we are still passing through.
So, I think that this is absolutely top of mind for executives. The ability for people to understand what skills are required in their current roles, where they aspire to themselves, and where the organisation wants to put them in the future, is a crucial new area for HR to concentrate, and indeed, the business to understand how to understand that.
And then, to allow organisations and individuals to develop these skillsets, these experiences, through formal methods of education and through other elements in terms of development as well, too. To enable them to actually try these new things, to be successful, and then understand whether they’ve made it to the other side as it were, noting that it’s a constant evolution in terms of reskilling that would be necessary.
So, I think this has been an opportunity through these recent times, for organisations to take a very broader view of education, learning, and training, not necessarily in the traditional sense, but doing things remotely
And giving people the opportunity to try new things, sometimes in a very dramatically different way than they would have been seeing beforehand, and with some surprising results coming out the other side.
SSG: And actually, on that, perhaps a provocative question. We have seen huge numbers of people pivot rapidly. What does that mean about the need for long-term workforce strategies that map out how organisations see a workforce changing over time? Does it suggest that they’re not necessarily necessary?
JE: I think there’s a difference. And we’ve published a lot of research recently in the market, which people may have seen, Sam, about the notion of skills, which are quite finite in terms of a sub-element of a capability, of a competency. Which enables you to do something which could be linked to a functional or technical capability, that continually change over time, I get that.
But then, there is this notion of what we’ve termed as enduring human capabilities that are important for organisations to harness and foster, for individuals to harness and foster as well. And having a propensity to develop those skills in your organisation, alongside the typical technical skills, is certainly something that’s important.
I think there’s a question here with regard to workforce planning, and how strategic you are to really be able to continuously predict what skills are going to be needed, and in what quantum, and where they are. To do the work that’s going to be required in your organisation, to develop and deliver value, either for your shareholders or for society, for your customers, your colleagues, and any other stakeholders.
And I think organisations really do need to be forward-thinking and scenario planning around that, either at a functional level or at a broader level, to understand where they’re going to need to either develop those skills internally, to build them. Where they can’t do that quickly enough, or whether there’s a competition for those skills, maybe they need to buy them from the open market, or partner with others to bring in external supply of those skills to come onto the balance sheet, or not, as the case may be.
Or, alternatively, how they need to automate some of those, noting that some of these things will be becoming automated over time. So, I think that the supply and demand equation is changing quite significantly. We’re also seeing quite a lot of organisations develop people in new ways.
I think the rise of talent marketplaces, either internal or external, skills ontologies that are either housed in your ERP system, or some of the other vendors that you might be using, are becoming more commonplace. I don’t think the answer is out there right now, in terms of what the actual 100% go-to solution actually is. It’s an evolving area. But organisations are increasingly using quite a significant amount of different ways to understand exactly what they require, and how they can get those things.
And then, through democratising learning, offering a way of delivering capability uplift, both in the near term and for the longer term, that I’ve mentioned, are becoming increasingly important.
SSG: Thanks very much, Jonathan. And you talked there about the imperative of large organisational shifts to make this happen. It links really nicely, Melissa, to what you were saying right at the beginning about reimagining work
And the way in which we seem to be describing it a lot at Deloitte at the moment is through rearchitecting work, and I think it’s the new phrase that people are going to start to hear more and more. So, what does rearchitecting work mean, and what does it involve
MB: Absolutely, Sam. And as we’ve already said, 2020 was not only a year of extraordinary disruption, but it was also a year of extraordinary resilience. And during incredibly turbulent times, we’ve seen some fantastic results generating the highest increase in productivity since 2010.
And I think, historically, when we look at productivity, we’ve been adding technology to the workplace, but we’ve not necessarily stopped to look at the work itself, which I think raises the question, how can we sustain this productivity? And here at Deloitte, I think we believe the answer lies in thinking about work differently, and starting with a focus on the humans who do the work. The pandemic has highlighted, for us, that the workforce is more than just an enabler to what organisations want to achieve. It’s a real source of value and meaning.
And more than ever, the workforce needs to be treated as a distinct path to expanding productivity. So, at Deloitte, we talk about rearchitecting work as putting work at the centre, and shifting it from a traditional process to a more humanised flow. Work is no longer static and process-driven, but it’s fluid and it’s constantly evolving, and it requires us to rethink what we should be doing and how we should be doing it.
And it begins with reframing the work conversation around outcomes, to increase productivity and unleash potential across the organisation. And it drives a future focus towards achieving work aspirations and outcomes that create lasting value for individuals, the organisation, and for wider society at large.
By centring on work as a flow, aligned with how humans think, analyse, create, and engage, we can really illuminate the human and technological capabilities required to achieve new outcomes and unleash new possibilities. Ultimately, with the end result of making work better for humans, and humans better at work.
JE: Thanks, Mel. We’re seeing quite a lot of organisations move through this process, and shifting their purpose from delivering just outputs, to outcomes. And identifying and addressing completely unseen problems and opportunities that may not have been before, creating cost savings for the organisation, and making broader value creation for all stakeholders.
And then, moving from process-centric skills to human-centric work, is certainly something that we’re seeing becoming quite a lot more prevalent. One of the things that’s driving this as well, too, of course, is the reduction in cost, to reduce the human cost of performing work, increasing opportunities to expand and realise different value and different value streams. And also, strengthening the connection of work to a much larger purpose, bringing meaning to it, and providing a source of intrinsic motivation that may not necessarily have been in place.
When we went through the process of looking at this, one of the things we were always asking was around, what if work was essentially human? What if value and meaning could be more tangible in terms of what we do? What if our workforce’s attention could be focused on value-adding activities all the time?
What if we create a real-time ability for workers to sense and contribute to collective knowledge? And what if we create moments for every worker to identify opportunities for improvement or innovation, both in a way that work gets done, and for themselves as individuals? So, trying to boil all this down to, how do you make this happen at large in an organisation, we’ve identified four main elements of the journey.
Firstly, reframing the conversation to focus on outcomes that humanise work for greater productivity, and create value. Prioritising and mapping those outcomes is the second point, the capability to create value flows to humanise that work. Thirdly, identifying the existing or needed technologies to power these value flows, either that exist in the organisation, or new ones that are required.
And then, rearchitecting these technologies and deploying them in the organisation, with a very human-centric approach, to try and drive through the opportunity. So, hopefully this process, and the focusing on these things, will make work better for humans, and humans better for work.
SSG: A phrase that I’m sure is going to dominate the next two years, or beyond. And a simple phrase, but a huge amount of work that is going to sit behind it. So, Melissa, what is the role of HR in all of this?
MB: Absolutely, Sam. I was working as an HR professional when the pandemic hit, and saw first-hand how HR was really thrust to the forefront, and extended its influence and remit beyond its typical role, to really start to orchestrate work across the entire organisation.
And I think we’re all aware, HR and human capital issues are truly business issues, and that puts the CHRO right at the centre of really high-profile decisions that are directly impacting the organisation.
And what this means is that the CHRO is not just responsible for driving the transformation of the HR organisation, it’s also being asked to take the lead at an organisation-wide level, across organisation-wide issues and how work gets done. And I think what we’ve seen through the pandemic is that this has brought the CHRO and the CIO closer than ever, with the CHRO driving the re-architecture of work, and the CIO leading on the acceleration of digital.
In our trend survey this year, we found that one in four HR executives are very confident in their ability to navigate the changes required in the next three to five years, and half of them are confident. However, confidence among business executives was lower, with only 11% being very confident.
And I think, for me, this highlights the importance of HR functions in ensuring that they understand and meet the needs of the business, whilst also taking ownership of the work transformation agenda, and really shaping the future of work in their organisation.
And I think, to effectively rearchitect a human vision of the future of work, HR will really need to partner closely with business leaders and with workers, and treat the re-architecture of work as an ongoing capability that needs to be embedded across the operations.
SSG: And digging down more specifically, Jonathan, from a reskilling standpoint, what do you see as reskilling? Or, how do you see reskilling or learning functions contributing to that?
JE: I think it’s crucial, Sam. And obviously, I completely agree with regard to HR is being thrust to the fore, but in collaboration with colleagues across the organisation. I think if you’re going to get into the re-architecture conversation at the workforce level, it is truly not just a learning HR, talent, leadership conversation
It’s something which is really looking at trying to generate where you can find forward-looking insight, to sense opportunities and new directions for new skills and capabilities to be put in place, to create more value, or greater value, in the organisation or for stakeholders. And then, if you think backwards from that, in terms of the workforce strategy that we talked about earlier on, the role of reskilling becomes central to it, but it’s not all of the conversation.
It then becomes much more about the whole talent process, the build-by-bots process that you have moving across the overall organisation, to develop the workforce or to rearchitect the workforce. And then, of course, how you enable the workforce as well, though performance management, ensuring that wellbeing is put through, so that the workers can feel and perform at their best.
How teams work, to make sure that when the work is happening, the work happens in the best possible way, using technology that’s complementary to human skills. And rearchitect the way that work gets done. The rise of collaboration software, which we’ve all become attuned to over the last few months.
So, I think it’s a really broad opportunity for reskilling to be part of an overall narrative, and thinking about this very holistically. And I think those firms that take the bull by the horns, and really look at this in a very broad sense, have every chance of being successful.
What’s particularly interesting is, if you look across our human capital trends report, everything that we talk about is centred around work, and humanisation of that. Be that designing work for wellbeing, creating reskilling opportunities, how super teams and teams work, governing workforce strategies and how they work, and what the role of HR is in the future, and how they need to move.
SSG: Thanks very much. And Melissa and Jonathan, thank you so much for joining us. It’s been a fascinating discussion. To find out more about the European Human Capital Trends Report, you can Google it or look on our website, or find it via our social media channels. Thanks very much.
Global Human Capital Trends 2021
European special report
Future of Work