Integrating Technology and Cultivating Talent in a Sustainable Workplace

These intertwined elements demand an organisational culture that champions adaptability, lifelong learning, and inclusivity. Embracing these changes will empower both workplaces and workforces to thrive in a future where innovation, sustainability, and well-being are at the core of business success.

I had the opportunity to interview Emma Parry, Professor of HR at Cranfield Business School and Raj Singh, Non-Executive Director at AXA UK, Vanguard and AIB to get their thoughts on the Future of Work.

What broader perspectives should businesses consider while navigating the changes in relation to workplace of the future?

Emma: The future of the workplace hinges on the time frame considered. While media and consultancy narratives suggest imminent radical changes due to automation and AI, reality might be more gradual. In 50 years, transformative advancements are plausible, but within the next decade, changes may unfold incrementally rather than dramatically.

Digitalisation has progressed over five decades, particularly in manufacturing through automation and robotics. Today, AI's capabilities are extending to cognitive roles, impacting broader work segments. In the near future, AI will likely augment tasks, complementing human roles rather than replacing them entirely, though some job displacement will occur.

The challenge lies in integrating AI thoughtfully into workplaces, crafting strategies to manage transitions effectively. This scenario defies the "robots taking jobs" narrative, focusing instead on enhancing human productivity. While significant changes loom, a completely automated workplace in the next decade seems overstated. We should consider broader perspectives on this topic.

What are the biggest changes you've seen in the workplace since the start of your career?

Raj: Over the last 40 years, the workplace, particularly in financial services, has transformed significantly. Traditional entry-level roles, where individuals learned foundational skills through hands-on experience, have largely vanished. Today, new entrants face higher expectations, requiring advanced training and education even for entry-level positions. As operational roles become mechanised, fewer opportunities exist, yet those available demand high cognitive and analytical abilities.

My children, after navigating intensive investment banking training across various countries, exemplify the rigorous selection process today. For instance, my son's recent experience involved 51 interviews for mid-level positions at top UK firms, highlighting the competitive landscape. Companies invest in thorough vetting to mitigate hiring risks, given fewer intake opportunities.

Looking ahead, mechanisation will further diminish basic roles, transferring analytical tasks globally. This landscape challenges educational systems to align with evolving skill requirements. As automation continues, the emphasis will shift to higher skill levels, reshaping job prospects significantly.

Emma: I agree with Raj's insights on workplace transformation and future skill demands. While manual roles persist due to incomplete automation, there's a growing need for high-level, complex roles requiring critical thinking, problem-solving, interpersonal, and influencing skills. This trend results in the "hollowing out" of middle-tier jobs, initially noted in financial services and now evident in education, health diagnostics, and legal sectors.

As AI advances, this hollowing out deepens, impacting future skill requirements. Lower-level role skills must evolve, embracing digital and various human skills. Simultaneously, the demand for advanced skills, particularly technical expertise in S-T-E-M and higher-level management, leadership, and cognitive abilities, will soar.

The workplace is influenced by automation, changing work styles, and sustainability efforts. These shifts affect task and organisational design while driving new skill needs. So, both low and high-skill requirements will shape future workforce dynamics, underscoring Raj’s observations.

Emma, when envisioning the workplace of the future from a sustainability perspective, what strategies should organisations employ to design a truly sustainable workplace of the future?

Emma: In addressing sustainability within organisations, it's crucial to take action—often through small, impactful steps rather than sweeping changes. My experience suggests that starting with micro-actions, like reducing plastic use, revising paper and travel policies, can significantly impact large organisations. Initiating change from the bottom up can be especially effective.

Sustainability, whether environmental, inclusive, or equitable, revolves around fostering a culture and mindset that holds individuals accountable at all organisational levels. As an HR professional, I stress the importance of aligning reward and recognition systems with these values to drive cultural shifts. Building a culture of accountability is essential to embedding sustainability in organisational practices, yet this is an area that often needs improvement. Thus, it's about designing systems that encourage responsibility and collective effort towards sustainability goals.

Raj from your perspective, if you look at the Workplace pre-pandemic and the workplace now post, pandemic - how do you define the hybrid work culture, especially in the context of return-to- office?

Raj: The shift to remote and flexible working models has introduced various challenges for businesses, particularly large corporations. Historically, remote work was practiced by a small segment of employees whose roles were conducive to working from home. However, the pandemic catalysed widespread adoption of remote working, leading many employees to expect this flexibility as the norm.

While remote work has advantages, corporations face dysfunctionalities, especially in sectors like financial services and technology. Employees in urban areas like London and Manchester are increasingly resistant to returning to the office, often defying contract stipulations.

The absence of cultural cohesion and interpersonal skill development is evident when teams work remotely, which hinders productivity and integration within large firms. High turnover rates among young employees further exacerbate these issues, as they often seek workplaces offering greater remote flexibility. In response, some companies have moved operations overseas to regions like Ireland to combat recruitment difficulties.

This global shift in work perspective, driven predominantly by younger generations, challenges businesses to balance employee expectations with organisational needs. Large firms, influenced by shareholder interests, might relocate jobs to lower-cost regions such as India or the Philippines. The future likely holds some flexible work arrangements, but disciplines around work patterns must tighten to maintain functionality. While extensive research on this transition remains limited, ongoing observation is crucial as companies navigate this evolving landscape.

Emma: We're in a transitional phase regarding remote and flexible work, with emerging research but incomplete clarity. Raj emphasized challenges for office-based roles, representing 40% of the workforce, while frontline jobs remain largely non-remote. During the pandemic, homeworking was born out of necessity, not choice, leading to underestimated complexities in hybrid setups, which disrupt team cohesion.

Employees now seek greater autonomy, valuing choice and control in work conditions. Organisations must thoughtfully set boundaries that accommodate flexibility while ensuring necessary in-office interactions, especially for new employees who benefit from face-to-face integration.

Inclusivity and equity are vital, as those less visible can face reduced opportunities and evaluations. With more flexibility comes the risk of inequity. Instead of a reactionary return-to-office mandate, companies should explore models that balance operational needs with employee satisfaction. Simply requiring two days in the office weekly may not be the optimal solution.

Raj: The approach to remote work varies widely across industries and organisations, reflecting diverse operational needs. In higher education, some institutions allow remote work consistently, except when teaching requires in-person presence. Other institutions demand regular office attendance, demonstrating the variability in work culture.

Successful implementations of flexible work models often occur when senior leaders set clear boundaries and empower teams to navigate their schedules independently. Such environments thrive on psychological safety and trust, minimising risks like resistance to office return.

When looking at workforce of the future, what methods do you find are the most effective for assessing and addressing the skills gap?

Emma: I'm not a big fan of the term "most effective," as it resembles "best practices" and often doesn't work as expected. However, I see organisations beginning to tackle this effectively. To start, assessing the skills gap requires considering both short-term and long-term aspects:

• In the short term, it's important to understand how things might change over the next two to three years. This involves using solid modelling and data analysis, leveraging the advances in technology and digitalisation which allow us to collect and analyse data far more effectively than 20 years ago. For the next few years, off-the-shelf tools can be quite beneficial in merging external data with internal business and employee data.
• In the longer term, quantitative methods aren't sufficient due to uncertainty. Instead, organisations should focus on qualitative foresight, including scenario planning and discussions about expected changes in technology, ways of working, and sustainability. These dialogues help understand the necessary skills and tasks required by the organisation.

Successful organisations make time for these long-term conversations regularly. While you cannot reliably predict data for 10-20 years due to high uncertainty, adopting qualitative approaches is crucial. Addressing skill gaps involves leveraging learning & development (L&D) systems that focus on skills instead of roles, promoting flexibility and agility.

If you had to look at future skills, how can organisations attract people who have the best potential in relation to future skills required and how can they retain them?

Raj: To attract and retain talent with strong future skills potential, organisations must clearly envision their future workplaces by analysing industry-specific technological changes. Differentiating as employers involves categorising roles based on flexibility, particularly remote work eligibility. Not all positions suit remote leadership, especially for those not yet established as leaders, but clear segregation of flexible positions can help avoid perceived unfairness in in-office requirements.

Highlighting job flexibility can draw top talent, while consistent skill and leadership development is crucial. The increasing use of AI tools, like contract drafting, necessitates training employees to use such technologies effectively. Implementing mandatory training ensures skill enhancement across the workforce, as voluntary training is often underutilised.

Leadership development at all levels is particularly important. Strong leadership across middle management and executive tiers is essential for successful organisational change. Therefore, the CEO and board should prioritise future-of-work initiatives as a strategic focus, fostering leadership capabilities throughout the company. This comprehensive approach will equip organisations to effectively implement change and maintain competitive advantage by ensuring quality leadership and skilled talent.

Emma: Examining the evidence, it's clear that the fundamental factors attracting and retaining employees haven't drastically changed over time. Although there's an increased focus on flexibility, this need for choice and control in how people work is longstanding, highlighted more visibly by the pandemic.

Key elements remain consistent: fair and equitable pay, a culture rooted in trust, opportunities for development, engaging work, and prospects for growth. These are timeless desires that shouldn't be overshadowed by current trends.

It's crucial to distinguish between what attracts individuals—such as career opportunities and financial packages—and what truly retains them. Often, the main reasons employees leave is tied to management quality, organisational culture, and personal relationships, rather than monetary benefits.

Moreover, there's a prevailing notion that companies must retain talent at any cost. However, in today's evolving labour market, marked by shifting skills, needs, and competition, this mindset may not always be appropriate. Building robust relationships with employees is key, acknowledging that sometimes a mutual parting is beneficial. Organisations investing in alumni programs and maintaining positive connections can offer a path for former employees to return or enhance the firm’s reputation, aiding recruitment efforts.

The objective should be to foster motivation, engagement, and productivity among employees, retaining them when it aligns with organisational needs, but not feeling compelled to hold onto everyone indefinitely. Shifting away from the pressure of retaining at all costs could be a valuable strategy for modern organisations.

Conclusion

From my perspective, the discussion with Emma and Raj highlighted the challenges and opportunities in shaping the future of work. Integrating technologies like AI requires a focus on human-centric design, sustainability, and inclusivity.

Emma stressed the importance of gradual AI integration and robust assessments for evolving skill needs. Scenario planning and strong L&D systems are vital for an agile workforce.

Raj pointed out the importance of flexibility and adaptive leadership to attract and retain talent. Balancing operational needs and employee expectations is crucial for success in flexible work models. Identifying short-term and long-term skills is essential for ensuring individual effectiveness, enabling employees to adapt to evolving roles and technology while maintaining core competencies.

Thank you, Emma and Raj, for your insights. Your guidance offers a clear path for organisations to remain resilient and competitive in this evolving landscape.