“One cannot manage change. One can only be ahead of it.”
Peter Drucker, management consultant
If we apply this thought to the future of work, it becomes clear that we need to act fast to be able to meet the challenges in terms of employing netizens of Generation Z.
The majority of Gen Z are still studying, but within 10 years or so these youngsters, grown up with the Internet, comfortable with technology and social media, will make up a big chunk of the workforce.
And they will need a totally different approach.
Both employers and employees will experience considerable changes, however, in a deeper sense, it is crucial to study those factors as well that have not changed a lot for decades.
This means that only about 25% of the workforce of larger companies feel that they use their talent every day.
If we ask the question what the most valuable assets of a company are, there are three core points:
- Talented and motivated workforce
In today’s world winners can be only those who open up to innovations, serve and help their employees and customers while incorporating their way of thinking in their corporate policy and culture.
“It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” Steve Jobs
Apple’s hiring policy, in its core, still seems to follow its former CEO’s philosophy, with a huge success. Looking for the best talent, attracting and making them loyal can do wonders for an organization.
If you can successfully manage talent, you will achieve amazing results.
But the question stays:
How can I make the most out of my workforce in the future?
The needs of the new generation workforce
Demographic as well as workforce market trends are changing radically, especially due to the fact that the new generation of netizens have different needs and expectations, not only in terms of the way they want to work, but how they want to live in general.
Simply put: they want to enjoy life to the fullest, including work!
Therefore companies must restructure and renew their whole arsenal of HR policies and principles.
Let’s see which are the main points that need to be addressed in the near future.
More freedom at work
Why tie yourself to a single firm and attend the office every day if you don’t want to?
Today, more and more people choose to be freelancers: it is predicted that freelancers in the US will make up the majority of the workforce within a decade. And it is more than likely that the global trend, too, will follow this pattern.
Emotional motivation – mission and vision
As we have mentioned before, there are still serious problems with motivation.
The real challenge now is how to motivate effectively the new generation of workers, basically how to keep them happy at your company.
Employees want to follow values and not orders.
Therefore the foundation of employer motivation can be a simple yet very powerful company mission.
When the US president John F. Kennedy visited the NASA Space Center in 1962, he asked a janitor in one of the service corridors what he was doing. The janitor answered: “I’m helping put a man on the moon!”
Another story comes from the 1600s when St. Paul’s Cathedral in London was rebuilt. One day, when the architect, Sir Christopher Wren, went to one of the bricklayers, he asked what he was doing. The worker replied enthusiastically: “I’m building a beautiful cathedral, sir.”
We can see how important a project’s or firm’s mission can be for the workforce.
If you find employees who totally agree with your mission and future vision, you can build up an incredibly powerful workforce.
“He will win whose army is animated by the same spirit throughout all its ranks.” Sun Tsu
Material motivation – Fair compensation
A decent weekly or monthly salary is not at all a satisfactory means to keep your people happy anymore.
They now want a fair amount of compensation for their contribution to growth.
Today, all around the world an increasing number of profit sharing and ownership options are offered not only to managers, but to general personnel as well.
People want to be valued on a fairer basis, especially those who are aware of their outstanding capabilities. Therefore performance and results based profit sharing models will be more and more required by future professionals.
Additionally, employees of the future will expect
- Greater transparency
- More shared information
- Broader scope of decision making
- Higher level of individual responsibility
- Efficiency and advanced time management
- Equality and acknowledgement for women
Because of all these needs, a shift will take place in terms of employer attitude from the “corporate soldier” to the “co-owner warrior”.
This will lead to one-person “entities” within an organization: Every employee will define their personal objectives and apply their own marketing tools, technical systems, cash flow and legal management.
How companies will need to change their HR approach
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
It is very clear that if a company wants to survive in the future, it must adapt its business policies to the ongoing changes in its environment as well as within the organization.
Since personnel management is a key factor to success, let’s see the most important issues that a company will need to tackle to be able to prosper in the future.
First of all, company managers should be aware that in most cases, it is not the company that employees leave, it is their bosses.
According to the authors of The New Protean Career Contract (2011), companies will not manage the careers of their employees, however, they will provide opportunities to help develop a personal identity and the ability to cope with change, thus employees can take care of their own professional growth in the future.
Likewise, if we want to find the most important quality of a perfect leader, it can be said that those are the best that help their colleagues find their own way to success while motivating them individually.
The three types of leaders:
- Bad leaders are those who are detested.
- Good leaders are those who are praised.
- Perfect leaders are the ones who did something, but people say “We did it ourselves!”
Jeffrey Immelt, the former CEO of GE, said he spent 40% of his working time with HR related tasks and it was the case with top managers of the company too.
So it seems employees not only deserve attention, but this attitude from the management brings outstanding results.
Of course this includes laying down a clear corporate vision and identity that the personnel can easily grasp and accept and also elaborating an arsenal of personal incentives for each member of the workforce.
As a result, employees, motivated in the right way, will be able to “climb the mountain they thought was too high to conquer”.
A new era has come: the time of the “post-managerial” and “post-organizational” swarm organization. It is about power of knowledge and decision making that will be held by the larger masses of the organization (or rather community) working towards a common goal.
Thus the responsibility of leaders will be “spread out” more to the teams and individual workers. Money with such organizations will be of secondary importance and realizing their vision will be their priority.
HR’s new role is evolving
The role of HR will fundamentally change. Leading corporations now include human resource management in strategic management, it is no longer a “lower level” factor in decision making processes.
HR trends unfolding:
- Many HR managers look for candidates for a fixed term or a definite project.
- Value-based selection is gaining more importance.
- This principle no longer holds true: “We can develop in areas that are our weakest competencies.”
- Management needs to deal with standardizing communication, phrasing and the way of thinking within an organization.
- Internal Research & Development will gain more focus. (Presently, research is already a very powerful sector: 90% of all scientists ever lived on earth live with us today.)
- Leading and managing employees will be set on a continuously changing path.
- Since imagination and conceptual thinking, and not money, are the most demanded resources today, it will be more and more important to attract the right talent rather than the funds.
What will matter the most in your hiring policy:
- Employees are your biggest comparative advantage and smallest comparative disadvantage
- Your ability to adapt to change
- Your attractiveness
- Your focus
- Your perseverance and commitment
- Your measurable output
- The salaries you give
Key areas of development
Values and principles
Nowadays the loss of relevant knowledge takes place very fast, but you can also make up for this loss relatively quickly.
What you cannot change fast is the values and principles, so it is crucial that
- You, as a company, understand and set your own values
- You know the values of your leaders and employees
- Make sure that corporate values and workforce values are in harmony
Organizations need to realize that they do not own their employees, but “lease” their knowledge and capabilities.
Accountability and data management throughout the whole process of value creation will be indispensable.
Outsourcing tasks and responsibilities will get more focus and only strategic competencies will be kept under direct control.
Increasing performance and efficiency will incorporate the following:
- Decentralization: “flattening out” decision making processes will give more power to talents further down the organizational hierarchy – faster and more competent decisions mean faster and more beneficial results
- Collaboration: sharing information between employees should be supported since broadening the knowledge base will bring better results at the end of the day
- Transparency: more and more employees require that all processes of the organization are transparent so that working can be based on mutual respect and honesty
- Results-oriented approach: weeding out unnecessary steps, actions and protocols as well as applying the most relevant knowledge will rule; it will no longer be important where or how you work as long as you work effectively
Firms of the future – the Semco and Buffer models
A company without rules?
A company based on trust?
A company looking for wisdom?
The company of the future?
No, it’s been around for a while.
Semco is a Brazilian firm which grew from $4 million in revenue to $160 million in 20 years under the leadership of Ricardo Semler.
How did they do it?
They focused on people, their needs and gave them power:
“The question we were asking was, how can we be taking care of people? People are the only thing we have.” Ricardo Semler, former CEO, Semco
Some interesting “no-leadership” highlights:
- Employers can set their own salaries based on transparent financial records
- Employers decide when they want to work
- No tracking of hours worked
- Most meetings are voluntary
- Any two employees (first to arrive) can join board meetings and vote (even cleaning ladies)
- Leaders are selected by the teams
- Employers can decide what they want to work on
Listen to Ricardo Semler’s TED talk here.
This social media management firm’s core value is “Default to transparency”.
They publicly share their equity formula, employee salaries, pricing and many other pieces of “normally” confidential information.
Transparency helps a great deal to set the guidelines (and not rules!) for the right and acceptable behaviour within a company.
Apart from transparency, Buffer has other values that the founders thought important to incorporate in their business, e.g.:
- Choose positivity and happiness
- Focus on self-improvement
- Show gratitude
“We had no choice: we had to put our values into words as soon as possible. After we did so, it really moved us from the company culture being ad-hoc and left to fate, to us deliberately shaping it.” Joel Gascoigne, CEO, Buffer