Changing Workforce Dynamics - Evolution or Revolution?

I guess, this topic is as trendy as the question – evolution or revolution.?Quite classic!

Whatever is the literary definition of these words - ‘evolution’ or ‘revolution’, it is interesting to reflect these with respect to the current changes in workforce administration and employee engagement.

From a practitioner’s lens, let me outline the top five observations in this space that are redefining the workforce dynamics in enterprises today.

1)??????Blurred Digital boundaries – Digital Natives, Digital Immigrants etc..

Pre-Pandemic markets were abuzz about the ‘Digital Divide’ of the workforce – Digital Natives, Digital Immigrants or Digital Refugees. At a high-level, this classification was based on the adaptiveness or expertise of workforce to use digital or social channels / gadgets etc.. Back then, there were dooms day predictions for the section of employees who found it difficult to switch to the new ways of communicating, collaborating, and working.

With the pandemic impacting the most sections of workforce across verticals and enterprises, we are observing that almost everyone is tuned to digital channels for their work or otherwise. Consequently, the so called ‘digital divide’ is blurred and almost non-existent now, with everyone taking into the new ways of working in this Hybrid Working model.

2)??????Great Attrition or Great Attraction; But Its time for ‘Greater Realization…’

Of late, I have been reading articles on this topic. Some, McKinsey articles talk about 40% turn-over across industries in next 3 - 6 months – which is quite an uncommon market trend in recent history.

It reminds me about the ‘Talent Wars’ which we discussed few years ago and sadly no Enterprise won such wars.

Now, we read stories about how HR departments of enterprises across the globe analyzing their employee data and trying desperately to cut the soaring attrition levels.

Certain sectors like IT Services, Hi-Tech etc. which always had sub 20% attrition levels are finding it difficult to retain or attract talent. By design, their entire business models were developed and prevailed on such lower attrition levels. No wonder, they are in a big mess now and the very basics of their business model is facing severe design flaw.

On the contrary, verticals like Retail, Health-care Providers etc.. always had high turn-over of workforce – more than 40%. However, they bake-in such attrition % in their business models and the entire execution is aligned with such expectation of employee turn-over.

May be, it’s time for these enterprises across verticals and industries to ‘realize’ the situation. This kind attrition levels in market are going to stay; The writing on the wall is clear and cannot be ignored. So, Enterprises need to move forward with 40% or more attrition % as part of their business operating model design and execution.

May be, this is the new normal and its time for new beginnings!

3)??????Faster migration and consolidation into Niche skills

Migration into new skills or consolidation of skill matrix is a common phenomenon in markets, with talents moving between multiple skills over some period and settling down into few niche areas. Typically, this happens over a period – an evolutionary approach. What the markets witnessed around Y2K period during late nineties, perhaps, is a best example where diversified talent across all industries have converged into software development. But it took a while for this swift to happen, as I explained.

What we witness now, during post-pandemic, is much fast paced movements into niche skills across the industry. This is a great time for workforce to change their current work, learn and migrate to newer or Niche skills – a big opportunity to redefine their ‘resume’! With every enterprise becoming a software firm in some sense, the talent movement across sectors into niche skills is very clearly visible. An imminent revolution!

4)??????Resonating with ‘Reward Unfairly ….’

Few years ago, while talking about ‘Future of Work’ trends in a meeting, I was making this point about ‘How Enterprises will have to reward the top performers much more than the average workers..’.

It made my manager jump off the seat literally. He was not comfortable with such language in an employee facing presentation and suggested that I remove this debatable point!

Today, with looming attrition levels, Enterprises genuinely realize the potential of their top performers who has 2X or 3X productivity as compared to average workers. Rewarding or Retaining top performers who contribute to the business growth or impact business metrics, has become much more existential imperative than it was ever before.

Rewarding such high performing talent highly as compared to average performing employees is quickly becoming the way for employee retention. For knowledge-based industries or sectors thriving on individual productivity and lower automation, this will become the new Mantra for employee retention.

5)??????Defying the current HR Predictive Models

Last two years, market has been flooded with AI/ML based prediction models in HR process capabilities like talent acquisition, talent sourcing, employee engagement, employee attrition, and employee attrition. HR Organizations and personnel across the globe made good use of these models to decide their employee actions and value proposition. Needless to mention, these AI/ML models were well ‘trained’ with lot of historic data related to employee transactions in each enterprise, driving the decision making. Today, you can call them ‘steady-state’ models!

I think, post pandemic these models must be ‘re-trained’ again with new data sets - Because the parameters determining a loyal employee are fast changing to suggest employee retention measures; Because the percentages or pattern of employee attrition has turned upside down; Because the very definition of ‘Talent’ is changing in the market for an Enterprise to prepare for their talent acquisition or sourcing. This side of the technology enablement must start all over again – unfortunately!

Finally, while this note just summarizes the current observations at workplace, we need a deeper study to understand if this phenomenon are just symptoms or causes. Whatever is the current situation today, I am sure it will evolve into ‘Self Correction’ mode in times to come.

May be, just like we hear from that white bearded grand old man in every story we read during childhood, TIME may level or heal all these things.

Interesting times ahead. Surely?!?