Many once-powerful employer brands will be unable to attract top talent in the next decade, according to a report on how the downturn will change the future of work by PricewaterhouseCoopers (PwC).

Pay and promotion freezes, changes to pension schemes, cuts in recruitment and slashed training budgets, combined with poor communication, have eroded the bonds of trust between some employers and their employees, the report says. “In contrast, other organisations have excelled at doing more with less to reward, engage and develop their employees in an unstable employment landscape where many individuals view their career prospects as stagnant or diminishing.”

The report – Managing Tomorrow’s People: How the Downturn Will Change the Future of Work – uses scenario planning to map how the crisis will impact on the widely accepted shortage of talent predicted for tomorrow’s world. The success or failure of reward and people strategies will have a decisive impact on which organisations become the successful brands and top employers of the next decade.

The study is the third in the firm’s “Managing Tomorrow’s People” series, and looks back from 2020 and “tells the story of how three fictitious organisations emerged from the current crisis - specifically in terms of their people strategies”. The conclusion from all three scenarios is that, as economies start to stabilise, organisations need to assess whether their people plans - which include the ways people are recruited, rewarded, retained, incentivised, trained and retired - are fit for the future.

THREE IMAGINED ‘WORLDS OF WORK’
With the rapidly changing and increasingly complex nature of the workplace in mind, the report envisages a changed employment landscape where employers use alternative methods to engage specialist talent, issue business passports for highly-mobile executives and how workers with technical skills behave like individual companies outsourcing their administration and billing needs to international trade guilds. It also considers proposals for how employee and executive reward can be reformed. The report is based on three imagined worlds of work.

The Green World - demands for greater transparency and social responsibility in business will be magnified by the economic crisis and will resonate with the desire for environmental responsibility already present in the green agenda. This will impact many areas of people management, particularly in relation to how people are rewarded.

The Blue World - an increased focus on hard people metrics to measure performance and productivity will evolve as companies look at a long-term reality of having to do more with less. This scenario imagines the performance and efficiency culture necessary for dealing with global companies larger than many individual countries, against the backdrop of the emerging economic superpowers of the developing world.

The Orange World - the opportunity for radical new ways of working will emerge through innovation in the Orange World scenario. This world takes the concept of outsourcing and globalisation of the workforce to an extreme portfolio working model where workers organise their working lives like individual businesses in a highly networked world.


FIRMS MUST NOT PANIC
Mark Carter, HR services partner with PwC Ireland said that as the longer term impact of people decisions taken during the downturn begin to be felt, the winners and losers of the war for talent are starting to reveal themselves. “Organisations which continued to focus on investment and employee engagement are emerging as clear leaders. Those who continued to offer their employees new opportunities and invested in their people pipeline have a competitive advantage.”

He said that other companies appear to have panicked and made decisions based on short term considerations that will have long term repercussions for their “people pipeline” and their future business success. “For example, the suspension of recruiting new blood or implementing a redundancy programme which has resulted in key people leaving. Consequently, some employer brands will be damaged as a result of their people management decisions.”

Mary O’Hara, HR services partner, said “looking outward, Irish businesses see expansion into new markets to make up for the lack of domestic demand as one of their biggest opportunities but this also gives rise to significant workforce mobility challenges.”

Mark Carter said that people costs, being one of the largest business expenses, have been at the top of the cost cutting agenda. But he said that short term cost savings may lead to long term damage from reduced people investment which will undermine the ability to compete when the business climate improves, such as reducing graduate intake.