As we navigate the aftermath of the pandemic, we’re confronted with ongoing turbulence stemming from changing demographics, technological advancements like generative AI, evolving social norms, and the imperative to achieve Carbon Net Zero. By the end of the 2020s, the workforce and the nature of work itself will be markedly different from what we see today.
Our research highlights four critical factors that demand organisations’ vigilant attention:
An ageing and shrinking workforce
The world population is ageing in an unprecedented fashion. The 2020s will see the impact of falling birth rates and increasing longevity start to affect the shape of the workforce. The workforce is shrinking and almost all advanced economies will see the share of population aged between 20 and 64 decline over the next decade. This situation is not just confined to the developed economies: many emerging economies are ageing rapidly too. Employers globally will find they are fishing in ever shallower talent pools.
The impact of GenAI on jobs
The advance of generative AI and possibilities for automation of work are hot topics for the future of work. There are clearly fascinating technological developments underway, however, their impact on employment and the wider economy are difficult to assess.
An extensively cited 2013 Oxford Martin study by Frey and Osborne suggested that 47 per cent of US jobs were at risk of automation over the next 10-20 years. This sparked a long debate in which OECD economists argued that the figure was likely to be much lower, on the basis that routine tasks, rather than entire jobs, were likely to be automated. In this scenario, jobs would be upskilled rather than destroyed, as the removal of the more tedious components would free workers to concentrate on higher value elements of their jobs.
Recent evidence of automation causing large-scale job displacement is hard to come by. The impact of automation on work is likely to be far more nuanced than either the optimistic or dystopian narratives convey. Automation affects the tasks that make up a job and not the entire job directly. What does seem likely is that AI will change the way we work by taking over many routine tasks, but these will be routine thinking rather than manual tasks. The challenge for both employers and employees will be to keep their skills up to date so they can keep pace with technological change.
Analysis by the World Economic Forum finds that many more jobs will be created than will be destroyed by artificial intelligence and automation. However this is not necessarily good news for employers or employees. These new jobs are unlikely to be in the same locations as those which are lost and will require different skills.
The shift to Carbon Net Zero
The shift to Carbon Net Zero will likely speed up in the 2020s. Many governments have set legally binding targets for 2050 or earlier. The work needs to begin this decade, and the impact on jobs will be significant. A transition of this nature will inevitably make some skills obsolete while creating demand for new ones. Jobs will be destroyed, created and, perhaps most importantly, changed.
All this will be taking place against a background of rising skills shortages. All major economies will be trying to do the same things at the same time and will therefore be needing the same sorts of workers. Those countries and companies with a buy-not-build approach to employee resourcing may find themselves in difficulties.
Changing expectations of employers
Companies are facing increasing scrutiny from the public, media and investors with directors being held responsible not only for financial performance, but also for running companies according to broader ESG interests.
This scrutiny extends to their treatment of employees, with stakeholders expecting fair wages, decent working conditions, and a commitment to diversity and inclusion. Stakeholders increasingly expect organisations to apply the lens of sustainability to their workforce as well as their operations. It is becoming less acceptable to hire and fire at will. For some companies, the wider social and economic impact of the employment they bring to the local community is part of their license to operate. Employers have to think carefully about how to mitigate the social impact of reduced employment. Talent sustainability, achieved through upskilling and reskilling initiatives, is paramount.
In summary, as employers reflect on what their business strategies mean for jobs and skills, we identify three priority actions:
Fostering a culture of continuous learning is essential for building an agile and resilient workforce. Employers should provide opportunities for upskilling and reskilling to ensure employees remain competitive in an evolving job market.
Employers should engage in ongoing dialogue with their workforce to understand their needs, concerns and aspirations, thereby fostering a collaborative approach to skill development and career advancement.
Implementing targeted upskilling and reskilling programs is essential for addressing specific skill gaps within the organization.
By prioritizing these measure, employers can build a future-fit workforce that is adaptable, agile, and resilient, thereby positioning themselves for success in an ever changing landscape of work.
Gillian Pillans is an HR and organizational development expert and Research Director at Corporate Research Forum.
