Two Questions for the Future of Work

What will the working world look like in 2030, and what questions does this raise for employers? To explore how work will change over the next decade or so, it’s useful to look at demographic and technology trends that predate the pandemic:

???????Demographic change. By 2030, Millennials and Gen Z will account for about two-thirds of the world’s working age population. While we often think of Millennials as the next generation of young workers, by 2030 the oldest Millennials will be 50 years old. The attitudes and preferences of these generations will define the working world and have been partly shaped by the pandemic.

In addition, aging populations in the Industrialized West, Japan and China will make it more challenging for employers to find workers. In 2030, the youngest Boomers will turn 65 and older Americans will comprise 21% of the population. China’s population could begin to decline for the first time.

???????Disruptive innovation. The pandemic accelerated technology adoption and disruption, giving us remote work, telehealth and distance learning. This will likely endure, driven by the increased appetite of business leaders to embrace disruption after the pandemic and by the digital-native proclivities of Gen Z. As disruption speeds up, the next generations will have not just multiple jobs, but multiple careers, over their lifetimes. And as disruption brings new technologies to market, it will enable fundamentally different models of work.

These forces raise at least two questions for employers in the future of work:

1. How will you find the talent for entirely new categories of work?

For years, many companies have been struggling with “skills gaps” — disparities between the skills employers need and the assessed skills of available workers. The Great Resignation compounded the challenge of finding qualified workers, but what lies ahead will take this to the next level. Employers will face a “perpetual skills gap”, requiring a fundamentally different approach to talent built around soft skills and aptitude prediction.

This involves two shifts, First, soft skills will displace hard skills in desirability, creating new skills gaps. Over the last couple of decades, we have seen the Internet commoditize knowledge — giving patients access to information once only held by doctors and reshaping work for countless knowledge professionals, from architects to lawyers. In much the same way, the next decade will see disruptive technologies commoditize hard skills. Workplace automation will be most proficient at taking on technical and analytical tasks — the domain of hard skills. As these tasks get automated, we will need humans more than ever to provide the things machines struggle with — context, interpretation, empathy — the domain of soft skills. The bottom line? Today’s gaps in STEM skills will be replaced by new gaps in soft skills.

But the future will bring an even bigger shift: from skills to aptitude. Over the next decade, accelerating disruption will create new job categories — professions that have never before existed. Consider how the computer revolution of the last three decades didn’t just disrupt existing professions such as travel agents or bank tellers; it also created entirely new categories of work, from Web Designers to Social Media Strategists and Cloud Architects.

The rise of professions not yet imagined could make skills gaps persistent and perpetual, particularly if approached with today’s mindsets. Closing the gap will demand a fundamentally different approach to recruiting and talent development: one that focuses not just on identifying skills but on predicting aptitude.

This is a sea change from how most companies currently approach talent. The algorithms powering the early stages of today’s corporate recruiting typically rely on keyword matches between résumés and job descriptions — yielding applicants who have held very similar job titles or conducted very similar activities at very similar organizations.

In a world of entirely new job categories, what use is a system optimized to look backwards at old jobs? Hiring for aptitude is about finding candidates who have never done this sort of work before, but who have a high predicted propensity for success in the role.

Getting there will require creativity in where employers look for workers. Research by the Harvard Business School on “hidden workers” points to armies of workers — from those with extended résumé gaps to career changers and military veterans — who are typically overlooked by recruiters, rendering them all but invisible to most employers.

It will also require creativity in how employers assess talent. In a world of increasingly sophisticated behavioral data and analytics, what data could you leverage to predict aptitude — and how would you access it? While there are challenges to be worked through — from privacy concerns to compliance with anti-discrimination regulations — success in the future of work will require the sorts of shifts described here.

2. How will the intersection of automation and the “Fulfilment Revolution” reshape your workforce?

The workplace of 2030 will be shaped by the intersection of two transformative trends: automation and the “Fulfilment Revolution”.

The Fulfilment Revolution

Running through many drivers of the Great Resignation is a common thread: workers are reassessing their lives to achieve more fulfilment and self-actualization relative to pay. Yet, this is just the opening salvo of a “Fulfilment Revolution” which will unfold over the next decade, driving many workers to expect — and achieve — more fulfilment at work.

If extrapolating from the experience of a few months to the next decade sounds like a stretch, consider how technology and demographics will unfold over this period:?

First, the Millennial and Gen Z workers that will dominate the workforce of 2030 will increasingly demand work experiences that are flexible and fulfilling. In a survey that predates the Great Resignation, 44% of Gen Z respondents said they would rather be unemployed than be in a job they don’t love.

Second, technological breakthroughs and new organizational models will increasingly enable work experiences that are democratic and worker-empowering. The Exit to Community (E2C) movement seeks to build startups with a different exit in mind — instead of an IPO or acquisition, these companies mature into ownership by their community of stakeholders. Meanwhile, technological advancements such as blockchain will enable new models such as the Decentralized Autonomous Organization (DAO) and Web3. DAOs are flat organizations with no central leadership, governed by a community organized around specific rules. Web3 is the next iteration of the internet, designed to be truly peer-to-peer without large companies as centralized intermediaries. It could be particularly potent in the gig economy. Imagine an uber without Uber — a ridesharing platform in which the drivers own and manage their own network. Lastly, technological breakthroughs in fields such as virtual reality (VR) — and its logical endpoint, the metaverse — could be game changing in making work more fulfilling. These technologies could enable more flexible approaches to work and empower workers to bring more of their authentic selves into the workplace.

Delivering on workers’ expectations for increased fulfilment will make company culture more important than ever. Employers will need to understand what is driving workers’ aspirations before building organizations that can deliver on those aspirations by embedding these values deep in the company’s purpose, structures, and metrics.

Automation

Of course, these trends won’t be universal. Every workplace isn’t going to transform itself into a DAO. High-skilled workers may appear better positioned to benefit from the Fulfilment Revolution than their low-skilled counterparts. So what does the future hold for low-skilled workers? Will restaurant workers in the US or factory workers in China benefit from the Fulfilment Revolution?

In a social media-connected world, aspiration spills over borders with the speed of a forest fire. This phenomenon — which gave us the Arab Spring and spawned “Social Media Influencer” as a job category — will make the aspiration for fulfilment widespread, even if the ability to achieve it varies.

We see evidence of this in the post-pandemic environment. Many low-skilled workers walked off their jobs during the Great Resignation, leaving the hospitality sector with large numbers of unfilled vacancies. China is seeing increasing pushback against the “9-9-6” work culture. Expect this to continue in the years ahead. Indeed, many of the trends driving the Fulfilment Revolution are not unique to the West. Gen Z in China and India are every bit as digitally native, socially conscious, and purpose-driven as their western peers.

As the Fulfilment Revolution spreads, many employers will face two choices with respect to their low-skilled workers: either provide more fulfilling jobs or increase pay to compensate for the low levels of fulfilment.

One way out of this quandary will be automation. Recent months have already seen an uptick in automation in hotels, restaurants and other blue collar workplaces. Expect this to be a lasting shift, much like the pandemic-driven shift to virtual/hybrid work. Many employers who feel unable to increase fulfillment or pay for human workers will turn to machines instead.

But there may also be another path: challenging entrenched mindsets about low-wage workers. Today, many employers are trapped in a self-fulfilling prophecy: they think of low-wage jobs as having high churn, so they underinvest in creating work experiences that are fulfilling or provide advancement opportunities. This underinvestment, in turn, drives workers to leave, creating high churn. A labor market in which workers and other stakeholders are no longer willing to accept the old model might finally motivate employers to break out of this vicious cycle — benefiting both workers and employers.

The intersection of these two imperatives — deliver fulfilment or automate — will reshape much of the working world by 2030. The impact will vary across locations and sectors. How will they impact your?workforce??

I am a Director at?the EY Research Institute. The views in this article are mine and do not necessarily reflect the views of the global EY organization or its member firms.