This special report explores one set of possible answers to the central question: How might the worker-employer relationship evolve to meet the opportunities and challenges of the post–COVID-19 world?
In a world full of uncertainties, we’ve used scenario planning to explore the possible futures of the worker-employer relationship, seeking to challenge conventional wisdom, stretch our thinking and horizons, and chart a new course. The insights on the following pages leverage our scenario planning methodology and are fueled by research findings from a combination of social media polling, live survey polling, artificial intelligence (AI)–enabled focus groups, and interviews with business and HR executives across industries and workers all over the world.
COVID-19: Testing the limits of the worker-employer relationship
The pandemic strained and tested the worker-employer relationship. Employers were called upon to support workers’ health, livelihoods, and dignity to an unprecedented degree, and their success—or failure—to do so came under unprecedented scrutiny. The result was that developments that might have played out over a period of many years were compressed into a matter of months.
Sometimes, these pressures yielded great benefits. Workers showed remarkable resilience and adaptability as they rose to the pandemic’s challenges, and with their employers’ support and mandate, they achieved innovative results that could otherwise have taken years to materialize. But many questions also arose about whether organizations were doing enough to support and safeguard their workers. People quickly pointed to organizations’ shortcomings in protecting workforce segments that were disproportionately impacted by the health crisis and pursuant economic downturn—young workers, who were most likely to be unemployed or underemployed;5 minority groups, whose labor force participation steeply declined; and women, whose employment was found to be 19% more at risk than men.6 Organizations also faced backlash for their role in encouraging high-pressure working conditions. Eighty-nine percent of workers in a February 2021 global Harvard Business Review study said that their work life was getting worse, 85% said that their well-being declined, and 56% said that their job demands had increased.7
Perhaps then it’s no surprise that we find ourselves in a moment of reflection. Workers are reconsidering everything from who they want to work for—with 40% of the global workforce considering leaving their employer this year8—to the role they expect employers to play in supporting their purpose and values. Likewise, organizations are contemplating their role in society and their relationship with their workers—with some leaning in and others backing away.
And while the worker-employer relationship may be top of mind for both workers and executives, they may not be aligned on how it will evolve. Sixty-three percent of the workers we surveyed in our research for this special report felt that their relationship with their employer will stay the same or become a stronger partnership, while 86% of executives told us they believe workers will gain greater independence and influence relative to their employers in the future.
Talent supply and government impact: Key contexts for the worker-employer relationship
Understanding how the worker-employer relationship could evolve begins with identifying which factors will have the greatest influence on the relationship moving forward. We used focus groups to get executives’ perspectives on what those factors could be, discussing possibilities such as economic growth, the use of technology in business, unexpected disasters, climate change, and social divides in access to resources such as education, wealth, and health. But beyond the rest, the two factors that stood out as being the most influential on the future of the worker-employer relationship in our research were talent supply and government impact.
Talent supply: How talent availability will influence how workers seek employment and how organizations access and retain them. The most evident impact of talent supply is the different actions that organizations or workers might take depending on how easy or difficult it is to get a job or secure an appropriately skilled worker. For instance, talent supply could influence whether organizations are likely to invest in reskilling; to what extent workers will seek changes in their employers or careers; how organizations could use the alternative workforce to access the skills and capabilities they need; and how heavily an organization might lean on technology to replace, augment, or collaborate with their workforce.
Talent supply is already a key concern and growing in importance. The pandemic exacerbated growing digital, education, and skilling divides around the globe—putting further strain on talent supply considerations and trends. In 2020, 80% of job losses were among the lowest quarter of wage earners, many of whom work in hard-hit sectors such as leisure and hospitality, government, and education.9 And a new study estimates that 100 million global low-wage workers will need to find a different occupation by 2030.10 At the same time, the demand for skilled workers is growing, with seven in 10 employers globally saying they are struggling to find workers with the right mix of technical skills and human capabilities.11
Government impact: How government action will affect workers’ and employers’ roles in the new world of work. In our research for this special report, government regulation rose to the top as the most influential external factor behind an organization’s and its workforce’s ability to thrive. The type, consistency, speed, and effectiveness of government action could all influence the worker-employer relationship. For instance, government effectiveness in driving social change, such as policies around worker representation or protection, or actions to address concerns such as climate change or social injustice, could shift workers’ expectations of their employers to attend to such issues. Public policy and regulation protecting jobs and wages, enhancing social safety nets and benefits, improving access to education, or investing in reskilling could decrease workers’ reliance on their employers for these things. And public policies that restrict or create an additional burden on organizations seeking to create work in new geographies, access talent across borders, or leverage alternative workforce segments could influence workforce planning and talent strategies.
We use these two factors, talent supply and government impact, to explore four potential futures that illustrate how the world of work and the worker-employer relationship could evolve:
- Work as fashion: In a “work as fashion” future, employers are in constant motion as they chase worker sentiments, competitor actions, and marketplace dynamics. The worker-employer relationship is REACTIVE: Employers feel compelled to respond in the moment to workers’ expressed preferences, and to competitor moves, without connecting those actions to a sustainable workforce strategy.
- War between talent: In a “war between talent” future, workers compete for limited jobs due to an oversupply of talent. The worker-employer relationship is IMPERSONAL: Employers view workers as interchangeable and easily replaceable, and workers are more concerned with competing with each other for jobs than with the quality of their relationship with their employer.
- Work is work: In a “work is work” future, workers and employers view organizational responsibility and personal and social fulfillment as largely separate domains. The worker-employer relationship is PROFESSIONAL: Each depends on the other to fulfill work-related needs, but both expect that workers will find meaning and purpose largely outside of work.
- Purpose unleashed: In a “purpose unleashed” future, purpose is the dominant force driving the relationship between workers and employers. The worker-employer relationship is COMMUNAL: Both workers and employers see shared purpose as the foundation of their relationship, viewing it as the most important tie that binds them together.