Future of the World Project: Kim Fulton on the Future of Work

Headline Idea

Work is being reformulated in the biggest shift in our lifetimes. The pandemic accelerated a shift from an industrial mindset for office work that has lingered even as we have lived in a service economy for a number of decades.?

About the Interview

In September, PRISM’s George Coe and Johan Gott sat down with Kim Fulton, a friend and former colleague, to discuss the future of work as part of our Futures of the World Series. Kim is an Employee Experience Expert at Kearney and leads the firm’s New Era of Work platform. She has spent her career rethinking how companies should adjust their organizational strategies to enable talent and drive greater impact. PRISM was excited to speak with Kim on the changing relationship between employers and employees and how changes in the labor market are forcing companies to adjust not only their HR strategies but their entire approach to organizational strategy.

Our Takeaways?

• The pandemic changed everything, and nowhere are its impacts clearer to see than in how we now work. Increased flexibility and remote working mean that office work is moving from a rigid industrial-inspired structure to one that finally reflects the shift to a services economy and is increasingly worker-centric. While the pandemic spurred this trend, workers are not prepared to let it go, and they may not have to because the shifting power dynamics in the labor force heavily favor workers.
• Companies need to increase their focus on attracting and retaining talent, this in turn may mean that executives need to reassess how they structure their organizations. Kim’s belief is that the employee experience should be central to the design of work rather than simply a byproduct of other organizational choices. This approach creates the conditions for employees to drive greater impact and value for the organization as well as creating more rewarding and enjoyable work experiences.?
• Many executives are aware of the challenges before them and are open to experimenting with new approaches to attract, retain, and engage talent, however, there are few tried and tested best practices available to replicate in order to actually make this transition happen. The pandemic disrupted work in profound ways and spurred the creation of many potential solutions, but much remains to be seen in where companies will land.?
• These shifts are shaking up norms, one example is how we are moving from a model of work that often forces women to adapt to rigid workplace structures and practices to one where work needs to be redesigned and reimagined in ways that work for women. Demand for workers and the increased flexibility of work are breaking the myth that a traditional Monday-to-Friday, 40-hour workweek is necessary and that schedules cannot be flexible. Companies are making clear efforts to attract women back into the labor force after job losses and caregiving demands forced so many to exit during the pandemic.
• Although increased attention toward improving employee welfare and increasing flexibility has many positives, the model adopted through the pandemic did not benefit all employees equally. For example, many Gen Z workers, who were just entering the workforce, lost important access to learning, coaching, and the social aspects of in-office work. This has augmented the need for employers to rethink how they create meaningful in-person interactions that are not solely about co-location.?

The Interview

Read the full conversation below. The conversation has been edited for clarity and style.?

PRISM: Can you tell us a bit about what you are doing now??

Kim Fulton: I’m focusing on what I'm calling “The New Era of Work”. Basically, I am looking at work from an employee experience perspective and reimagining how work is designed and structured so that employees have meaningful fulfilling careers and can drive greater impact for the organization.?

With the way the employee sentiments and the labor market have shifted in the US, companies are struggling to attract and retain people, trying to drive strategic priorities with a burnt out workforce, rethinking their employee value proposition, and figuring out how to structure hybrid and remote work so there's lots of conversations about how to navigate this new era of work.?

PRISM: To get started on the topic, and perhaps beyond the pandemic, what do we actually start to see when we apply that “employee experience” lens that we don't see when we apply a normal, traditional HR lens?

KF: In some ways, the pandemic is so central, because leading up to it the way that work was designed and structured hadn't changed in decades. It was very uniform; most workers had a Monday-to-Friday, nine-to-five, and largely on-site relationship with work, where there was a lot of oversight and coordination. Even when you think about the way organizations are designed, we start with identifying the vision and objectives. Strategy then comes in terms of the products and services that will be delivered. From there comes the operating model, which brings the question: How do we organize to deliver? The last choices are around the capabilities needed and how to attract, retain, develop, and incentivize people to deliver. Traditionally, the employee experience has been a byproduct of all the other organizational choices. An alternative is to start with a vision and the objectives for the organization and then ask: How do we position employees to thrive in delivering against those goals? Once we know that answer, we can design the work and the organization around that to create an environment where employees can thrive rather than just be functional in their role.

PRISM: This view sounds different, but is it really? Like in a sense, we've always thought about it that way, and the talk has been there but often action is missing? How different are these mindsets really?

KF: If you think about things like employee engagement, which is the way that we measure and talk about the employee experience, most organizations that I talk to say that their employee engagement scores are pretty good. Where there are gaps, it leads to incremental changes and tweaks, but it doesn't drive meaningful innovation in how work is designed. This means that the majority of organizations end up being functional but not thriving. Employees are resources to deploy to achieve organizational objectives, and the goal is to maximize productivity and efficiency. Employee experience becomes just a byproduct that gets tweaked around the edges. This changes completely when the starting point is to think about how employees can be positioned to thrive in the organization. Then, we have to start looking at things like how we make sure that the health and wellness of every employee is protected. In the current environment, that means things like managing burnout and mental health first. Right now, many companies are managing burnout with bandaid solutions like meditation apps and mindfulness sessions to treat the symptoms rather than redesigning the work to actually prevent burnout from happening in the first place.

PRISM: Is there a change in companies’ willingness to trade these things off now? Like is this just a new way of thinking about productivity and efficiency, and in a sense just that they are recognizing more of the long-term costs of doing things the old way? Or, is this more of a stakeholder capitalism idea with the employees as a stakeholder and now we're willing to sacrifice some profits because we have obligations to more people than our shareholders?

KF: It's more of the former. When we design work in a way that employees can truly thrive – so that their health and wellbeing are protected, so they have ownership and autonomy over their work, so there's trust and support among co-workers – all of those things are linked to positive outcomes, like increased productivity, innovation, collaboration, better interpersonal relationships, and better mental and physical health. When all of those things are in place, it positions employees to actually drive greater impact for customers and the organization. That's the argument here: Value is being left on the table by not taking the approach that puts more emphasis on employees. At the same time, with the market dynamics and the impacts of the pandemic, leverage has shifted towards employees. There's record level job openings and resignations. So employers are being challenged to respond to what employees are looking for. I think the pandemic also really caused a lot of people to take a step back and re-evaluate work, because life was so disrupted for almost everyone. People started looking at work in the context of their overall health, their relationships, their communities, and all their various passions and hobbies and pursuits that they usually are involved with. That has led to a sort of a collective re-evaluation of the ideas around What is the role of work? and How do we want this to fit into a full life going forward? I think this is driving some of the shifts that we're seeing.

PRISM: Interesting. I think about the economy at the moment and it is very much a sort of labor power economy because there are labor shortages. This makes it feel like the power is more in the hands of the workers than it was before the pandemic. How entrenched are the changes that are happening? I can imagine some lasting, but others might be softer and might disappear once the economy shifts again??

KF: Yes, It will be interesting to see how things play out longer term, because there are all these short-term pressures. For example, right now retailers are trying to address significant turnover and worker shortages. So, they're significantly increasing wages, paying for college tuition, and loosening the qualifications required for hiring, for example. It seems that there is going to be a near-term period where there is a lot of disruption, and then, after that, things will settle a bit. At the same time, however, things seem to be trending towards workers having more leverage in the longer term because the size of the working age population is not growing very quickly and labor productivity rates over the last decade have been lower than they have been historically. And there are some longer term shifts like Baby Boomers retiring, “long COVID” effects, and a lot of people exited the workforce, including caregivers. This makes it seem like workers will continue to have leverage, not just in this next six-month period but for an extended period. I think we'll probably see lots of shifts, and companies are trying different things. Some of it will stick and some of it won't. But there are a few things, like flexibility, which are here to stay. Workers have seen behind the curtain, they know that remote work is possible, and the vast majority of workers want at least some degree of flexibility going forward. Mandates to return to the office are being met with resistance and workers now have access to more employers. If you're willing to work remotely, the pool of employers that you can work for is much larger.?

I think the pandemic also highlighted the value of in-person, human connection; there were high degrees of loneliness and isolation through the pandemic. At the same time that there’s flexibility, there's a hunger for that in-person, meaningful connection. A lot of companies are trying to figure out the balance between wanting to get together in person but thinking about doing that with intention and for a purpose that's around building relationships and building culture, not just co-location.

Then the other big question deals with burnout and mental health. It's been so prevalent through the pandemic and was a problem before. Workers seem to cite long work hours and high demands as the biggest drivers of burnout. To me, that's the big question that companies are going to have to figure out, because there's an economic trade off, wages are going up, there aren’t enough workers, and yet people are burning out because they have too much work. Something is going to have to give.

PRISM: I think there are a lot of very significant changes here in terms of what the labor market looks like. As you said, the pool of employers is now so much larger. We’re basically almost going to a global labor pool, which is an incredibly different model from what we have had before. Maybe in big cities it's been a little bit like that before, but in smaller cities this could be a game changer, right?

KF: Exactly. Companies that are choosing to switch to a remote-first model now see that opportunity in having access to a much larger talent pool. At the same time, companies don't have so much money wrapped up in office space and all the services that go along with that. That frees up a lot of money to invest in your employee experience. So, you can do things like offsite retreats or other initiatives to build the relationships, culture, and trust that enable teams to then work effectively while remote.

PRISM: I'm fascinated by this point. I think that the point that was really interesting is the longer-term dynamic of having an aging population and therefore greater worker power because there's not enough of the labor force particularly in the West. It seems like in the services space there are sort of twin dynamics where it's easier to hire people and use a global workforce but at the same time it’s getting much more expensive to higher domestic workers, who are often just unhappy. Are we at a point where we could see a shift toward global outsourcing? Or, is that still far away because of barriers like language and capabilities?

KF: Over the longer term, I think it’s possible. Like you said, there are some barriers to doing it, like even the basics of time zones and language. That all has to be overcome, but to work remote first, companies are learning to be more asynchronous so that we don't all have to meet live and sit in front of our computers all day. So there is potentially an opportunity to have more offshore service workers, but we really aren’t seeing a lot of that yet.?

PRISM: What are the differences, if any, from a generational standpoint? Do Gen Z attitudes play into this?

KF: It's interesting because I think the reality during the pandemic has been a little bit different than what was expected at the outset. For example, many thought that Baby Boomers wouldn’t want to work?remote work?and Gen Z would be all over it. In reality, a lot of Baby Boomers are so established in their careers; they have the relationships, and they know what they're doing in their job. So, to be able to do it from home was pretty easy once the technology was sorted out. For Gen Z, you've got people who are fresh out of university and might be in their first job. So they're looking to learn and build their skills from other people in the organization. Work is a huge part of social life for a lot of people at that stage, so if you're living alone and, all of a sudden, the world goes into lockdown and you're not going into the office, then your social life is significantly impacted. We have seen in?the reported loneliness rates that it has been much worse for younger employees and for women.

PRISM: I wanted to go back to the paradigm shift idea. What does the new paradigm that you mentioned actually look like in terms of accomplishing the goals of connecting workers to the vision of the company and empowering them to execute the vision as opposed to just executing tasks?

KF: One dimension is on the meaning and purpose side of things. And there's sort of two sides to that coin: one is the organizational meaning and purpose - the reason the organization exists. Is it contributing positively to society and the environment? Do employees connect with it? Do they care about the mission of the company? Second is actually connecting that to the work that employees do every day. It's about bringing workers closer to their end customer to be able to see the impact of their work, creating a sense of progress by understanding how daily and weekly tasks build towards larger goals, and enabling employees to achieve their broader aspirations. It’s about ensuring that employees feel that their work is a valuable and worthwhile use of their time, energy, and talents.?

Another dimension is?health and wellbeing. Flexible work is going to be a big factor in that. The more that we can enable asynchronous working, the more true flexibility workers will have. That’s needed so that you don’t have everybody working from home, but tied to their computer in meetings all day. This requires redesigning processes with more documentation and collaborative tools, so that employees can advance their work independently while remaining aligned with the broader team. This will also give more ownership and flexibility. Some of this is about managing outcomes versus activities and processes. This is something that companies are talking about a lot, but questions remain about how to do this in a way that protects work/life balance. If the approach is to delegate work with defined deliverables and timelines but minimal guidance in how to get it done, there is a risk?that people end up working even longer hours than they were before.?

Another dimension is ownership and autonomy. This comes into the way we design organizations, particularly large organizations. So much of the decision making gets elevated and pushed up in the organization. But whenever we talk to people about what they love at work and what drives intrinsic motivation, one of the things that comes up is that people like it when they feel like they have ownership over their role and that they're empowered to make decisions, try things, and move the needle on metrics. So pushing decision-making lower in the organization works. Even in manufacturing contexts where workers could have the opportunity to re-engineer processes or talk to customers and collaborate with them to come up with new products and ways of doing things. That ownership drives a thriving environment for employees.

PRISM: We talk about workers in general, but in reality a manufacturing worker is very different from a person working in a meat processing facility, and they are both very different from an office worker. What do we really mean when we talk about the future of work? Who is the future of work for? I am assuming the focus is on the office worker, but maybe that's not how you see it.

KF: No, this new era of work impacts all workers, but?the dynamics are a bit different for office vs. frontline workers. For office workers one of the biggest questions right now is around flexible work. In a lot of those frontline roles where labor dynamics have really shifted a lot – like in retail and food services – they cannot find anyone to hire at all. So, wages are going up dramatically and perks are being offered to attract and retain workers. They're getting creative in how they're recruiting employees and loosening some of the job requirements to widen the pool of people available to them. So, it's workers in those frontline roles who actually have a lot of leverage right now.?

PRISM: What’s the situation then for manufacturing? It seems like some services companies’ goals are a bit incongruent with what you might be able to do with the manufacturing labor force. Do you just accept that and the fact that you have different dynamics for different parts of the workforce? Or do you double down on automation to try to get around that??

KF: The flexibility piece really is tied to office work and corporate roles because even the retail and food services will need to have people in the stores, and manufacturing has the same challenges since you need to hire workers where the plant is. That said, we are starting to see leading organizations challenge the assumption that there cannot be flexibility in frontline roles. For example, some organizations are identifying portions of roles that do not need to be onsite, such as some remote monitoring, analysis, and administrative tasks, to enable manufacturing employees to do aspects of their role remotely.?Others are introducing greater flexibility by providing frontline workers with scheduling apps that enable them to select preferred hours and swap shifts with co-workers. I'm not a manufacturing expert, but I do think automation is also going to play a big role in that transition.?

PRISM: I would assume that there is a lot of resistance to this idea, right? Do you see that? Where's the resistance to getting this done? Is it conservatism from leaders? Is it that we don't already have a finished playbook to do it? Or is it actually the staff that is just used to working his particular way? What do you see as the biggest obstacle??

KF: So far, I have been pleased to see how on board many executives and leaders have been with these concepts. For many, the questions are more about the “How?” than the “Why?” Many CEOs and executives have recognized the significant disruptions in the market and are now saying, “How do we need to evolve our employee experience to be an employer of choice going forward.”?

PRISM: I can see how the onus of making this right is on the middle management. It’s easy for the top executives to say, “We need to be like this”, “We will sell our office", and whatever else, but for the middle manager actually tasked with delivering this stuff, this must be a difficult environment to operate in?

KF: Yes. At the end of the day, a person’s direct manager is one of the biggest impacts on their job satisfaction and work wellbeing. I think more and more companies are seeing the need to build new leadership capabilities or shift the emphasis of some of the leadership capabilities. Just having the technical and business acumen to deliver the work is not going to be enough in this model. The human element and the people skills are going to be a big part of it, too.?

I think this remote work experiment over the last two years has gone a long way to demonstrating that it is possible to work like this. If we had only been a month or two, everybody would likely have been eager to jump back into the office, because it's easier. But, the prolonged period of working remotely made people realize the value and also start figuring out how to make it work.

PRISM: In a sense, it almost sounds like we are talking about the actual shift to the service economy. Obviously, this happened decades ago, but we were still in the manufacturing paradigm. Like, office workers went to the office and worked nine to five. They are the manufacturing worker and everything is built off that model. It's a command and control system. What you’re describing now, sounds like the actual service economy that was expected. Now, we're actually adjusting all the service jobs to the actual vision of what that was meant to be. Is that what's happening?

KF: I like the idea. I think that’s a good way of thinking about it. What you said is true: it was always sort of a manufacturing mindset. And technology has enabled us to do this because we can all be in different places and still meet and work together; we don't have to be physically together. Before the pandemic, there was basically one uniform model of how work was structured, and how we all go to work every day. That's all been completely shaken up in the last two years.

Creativity and innovation are going to be critical going forward and that requires this like unstructured work time: periods of flow where workers aren’t constantly distracted by Slack messages and emails, and more work-life balance and flexibility so that workers can step away and have the lateral thinking that lets you make the connections that lead to creative thinking. A lot of this more flexible, more autonomous work is conducive to that type of innovation and creativity.?

PRISM: Another lens to think about it, too, is a gender lens. It's like we are now creating workplaces that are actually catering to women. This is obviously based on a somewhat stereotypical classification of men and women, but is that something you think about?

KF: Yes, flexible work has been one of the key strategies to promote workplace gender equity for a long time. But prior to the pandemic, flexibility wasn't baked into the work model; it was treated as a special accommodation or perk so it wasn’t really fully equitable. If everybody starts working flexibly, then for sure, it creates opportunities to level the playing field. Caregiving has been a significant challenge to workplace gender equity for a long time and the pandemic highlighted those challenges more than ever. Many women exited the workforce because they couldn't balance full-time work with personal and caregiving responsibilities. US job losses also disproportionately impacted women of color. Things have actually gone backwards in some ways. Companies are looking to hire women back into the workforce now and flexible work models are an important strategy for women and all employees to meaningfully participate and balance work and personal life. Flexible work doesn’t just support women, but provides a more inclusive workplace overall and is an important aspect of any company’s Diversity, Equity, and Inclusion (DEI) agenda. There is a lot of work left to do, but there is probably greater opportunity than we've seen in a long time if inclusion and equity are intentionally designed into new work models from the outset

PRISM: Right, but hopefully, the whole childcare aspect is not a permanent shift. And that's going to go back to normal??

KF: Yes, except that it's also never been great at the same time. Childcare is so expensive that families make the trade off whether it is economically better to pay for childcare or have one parent stop working. There's a whole lot of room for improvement in the childcare space and how people balance that with work.

PRISM: Is there anything noticeable at the moment from a skills perspective, like a skills gap? I feel like the main talent demand has been in service industries where there are technical and engineering skills needed. I can imagine at some point, we snap back and we do not have people to build bridges and roads and stuff and then we just end up with a different type of skills gap. Is there anything like that happening there at the moment? Or, is it basically the same as it was??

KF: In general, companies aren't going to be able to hire their way out of the labor shortage. So there's going to be upskilling, reskilling, and capability-building with incoming workers and the current workforce. Many companies that we’ve talked to are facing significant gaps in digital skills and are also thinking differently about leadership capabilities

PRISM: Is there any other final point that you think we should make here just to make you sort of complete the conversation?

KF: I think the overarching message – and the thing that I'm excited about – is that there's so much opportunity ahead. We started the conversation talking about how?work has largely remained unchanged for decades. The pandemic caused this shake up and paradigm shift, and there's real opportunity going forward. We're seeing companies experiment and try all types of different things. And who knows exactly where things are going to settle, but I know there's a lot of opportunity for interesting work and more fulfilling and well-rounded lives and careers for people going forward.