Future of Work and Skills Survey
The challenges that leaders face today are more significant and complex than they’ve been in generations. Global crises such as climate change and destabilising inequity demand action. Accelerating the workplace’s digital journey carries tremendous execution risk. And people want and need more support and inspiration from their employers. Burnout has become its own epidemic, now recognised by the World Health Organization as an official disease. Weary, anxious workers are resigning from their jobs in record numbers around the world. In the US alone, 20m people quit their jobs between April and August 2021, according to the Bureau of Labor Statistics. The UK’s Office for National Statistics reported more than 1m open jobs in August 2021, and LinkedIn data shows a 26% jump in Australian workers moving from one company to another that precedes and extends through the pandemic.
For organisations to thrive, they need to access their people’s full potential and develop and execute new, dynamic strategies. In our Future of Work and Skills Survey, conducted in September 2021, the nearly 4,000 business and human resources (HR) leaders who responded collectively identified six ‘no-regrets’ moves as important to their workforce strategy—and agreed that they are taking action. But when given a choice to agree ‘slightly,’ ‘moderately’ or ‘strongly,’ only 20 to 30% agreed strongly that they are taking action today.
Lukewarm agreement or action will not move the needle in addressing today’s biggest workforce risks. Leaders must act vigorously and quickly to strengthen their organisations for the most pressing challenges and to prepare for the future of work.
Across all six broad no-regrets categories, the three specific actions that leaders in our survey were most likely to say were important but that they were not acting on are all related to digitisation or automation. The top three inhibitors to progress on these and other challenges were cost, lack of leadership capability and organisational culture. These stumbling blocks highlight the importance of shoring up both the financial and the human capital elements of the tech equation.
Leadership and organisational culture are, of course, linked. For leaders to make progress on their digital agenda and address urgent challenges, they will have to change their own behaviours and their people’s. Leaders will need to lean into data and develop their ability to use it to make more deliberate decisions. They’ll need to help shape their people’s behaviours by modelling changes in how work gets done and by putting actions behind their words on issues such as well-being and diversity, equity, and inclusion targets. Leaders will also have to invest in new cloud technologies, automation, and data models that fuel outcomes-based decision-making and meaningful returns on investment.
These are the actions in our survey that leaders were most likely to say are important but that they aren’t currently taking.
Identifying the risks of replacing human work with technology
Identifying the skills workers will need in the future due to technology
Communicating clearly about the effect of automation and AI on future skills needs
These are the factors that leaders in our survey were most likely to say get in the way of them taking action.
Planning is more important—and more difficult—than ever, as organisations face an increasingly uncertain future. Scenario-based planning, in which leaders imagine and anticipate their needs for multiple possible futures, is one way to be ready for whatever may come. Dynamic planning builds responsiveness into plans, allowing the organisation to revisit strategies and reallocate funding based on changes in the market, the workforce and performance. Committing to both types of planning yields dividends and is more effective than doing just one, because doing both prepares leaders for the breadth of possibilities and gets them ready to be flexible.
But good planning requires the right leaders, behaviours, data, tools and incentives.
Looking more broadly can be particularly beneficial in helping leaders build their forward-looking ability and putting organisations in a better position to thrive financially and otherwise. Yet only 26% of organisations in our survey strongly agreed that they use a wide variety of external data sources and viewpoints in planning. Investing in data will help leaders avoid being caught off guard by the next disruption and will help them build their ability to be intentional rather than reactive in their strategies.
‘The pandemic has increased the pressure for more integrated business and workforce strategies informed by robust scenario planning, which for some is delivering tangible financial benefits.’
As firms accelerate their digital journeys and prepare for the future of work, they’ll need to focus on their people and pull levers within their control to get the most out of them. Building trust in the organisation and the organisation’s leadership is one of those levers. PwC research has demonstrated that people want to work for employers that show they care. They also want the organisations they work for to live up to their purpose, values and culture. It’s heartening that in the current survey, almost 40% of leaders said trust between workers and their direct supervisors is very important. But returns on trust won’t be fully realised until leaders step up and bring their purpose and values to life. Among other things, leaders should support mental and physical well-being, establish greater levels of internal and external transparency, and close gaps in workforce diversity and pay equity.
Leaders need to be consistent, making sure their actions match their words. Also, many workers are grappling with mental and physical health concerns because of the pandemic. Some are still reeling from social and political unrest. And some are anxious about job security amid ongoing digitisation. To put employees at ease and retain them, leaders must institute supportive policies, open clear channels of communication, offer opportunities for upskilling to support their people’s long-term employability and show their commitment to having an inclusive organisational culture. Taking these actions will require accountability. In our survey, only 27% of respondents strongly agreed that leaders in their organisation are held accountable for diversity and inclusion results. Leaders need meaningful incentives and consequences to encourage them to deliver on tomorrow’s diversity and inclusion commitments.
Optimising productivity is about focusing on what you can control, and it’s integral to overcoming challenges related to digitisation and automation. Our survey confirms what has been widely reported elsewhere: remote or hybrid work boosted productivity in most workplaces. In our survey, 57% of respondents said their organisation performed better against workforce performance and productivity targets over the past 12 months. Only 4% said their company performed significantly worse.
Given these findings, now is the time for leaders to build an environment that supports sustainable productivity rather than fret about monitoring employees. Being productive for a day or week is meaningless if that productivity comes at the expense of well-being. Giving workers flexibility to manage their work and home lives as they see fit and take time to rest, and supporting their diverse circumstances and needs, will help them to be healthy, mentally and physically. And this will make it more likely that they’ll perform well in the long term.
‘Leaders need to engage with and listen to their people when responding to employee burnout and the desire of people to work for organisations that live up to their purpose, values and culture.’
Leaders know employees will need new skills to help their organisations flourish into the future. But the development of skills brings benefits beyond the realm of pure business. Employees who see their organisation investing in their long-term development will be more likely to trust leaders and feel happy and cared for—and therefore less likely to quit.
Yet the most significant struggle that leaders in our survey reported having in their upskilling efforts is in identifying the skills that workers will need in the future. The second- and third-most-cited challenges for leaders have to do with using analytics to predict skills gaps. It’s imperative that businesses make investments in systems that inventory and maintain an inventory of current skills and that support visualisation of gaps in future skills. These gaps can be mitigated with a range of measures, including general and targeted upskilling, targeted hiring and onboarding, enhanced on-the-job coaching, and the designing of career paths and succession plans that enable mobility and subsequently build new skills and experiences, enabling retention.
Digitisation will continue to be a top concern for leaders and a source of anxiety for workers. But the pandemic proved the importance of technology in engaging customers, creating new ways of working and even promoting productivity.
The best way to continue rolling out new technology solutions is with transparency and collaboration. Communication can even be personalised based on workforce segmentation. Different stakeholder personas, needs and preferences should be considered in messaging. Co-creation of technology solutions is also critical. Get employees comfortable with being part of the solution, even looking for automation opportunities. Impress the point that transformation will be human-led and tech-enabled. Executives can reassure employees that where technological solutions will be brought in, the impact on humans will not be as calamitous as they might fear. And when jobs will be affected, leaders must handle that, too, with transparency and humanity—not only for workers’ sake but because anxiety affects performance.
Given the many ways in which the pandemic highlighted the importance of organisational resilience and agility, it’s alarming that only 28% of leaders strongly agreed they can rapidly adjust their workforce strategies. Disruption won’t end with the pandemic, so it’s important for businesses to use all of the tools at their disposal to best position themselves for the future.
Some organisations have a cultural preference for building versus borrowing talent or else have difficulty moving quickly. Even when thinking about how to make in-house-only workers more agile, it’s important to increase recruiting capabilities and internal mobility and redeployment. But there is value in having access to ready-to-go, vetted resources for when your needs shift. Leaders looking to make their culture more open to contingent workers must build trust by sharing stories from elsewhere in the market or from their experience that demonstrate how contingent resources can help drive success. They also must emphasise some of the less obvious benefits of a different talent mix, such as the potential to reach more diverse workers and spark creativity with fresh ideas from outside the organisation.
All of this requires the business to develop, deploy and track a common workforce-strategy framework. And it’s essential that HR leaders and senior business executives be on the same page in this effort. Fewer than one-third of our survey respondents strongly agreed that the HR function is effective in developing and delivering their workforce strategy, and this number was even lower among non-HR leaders, at only 15%. HR and other business leaders have some work to do in closing that gap in their perception and increasing those percentages.
In analysing our survey data, we noticed that respondents in the telecommunications, media and technology (TMT) industry were almost always 5 to 10 percentage points above global responses in stating the importance of these six no-regrets moves and strongly agreeing that they were taking action. For instance, 37% of respondents in the TMT industry strongly agreed that they use dynamic planning, compared with 30% globally. On the other hand, respondents in government and the public sector and in energy, utilities and resources (EU&R) were often 5 to 10 percentage points below global responses. For example, those in EU&R were half as likely as their surveyed peers to strongly agree that they can identify the skills the organisation will need in the future due to technological change (13%, compared with 26% globally).
As for countries and regions, China, India, Brazil and the Middle East were generally more optimistic about their current capabilities. For instance, 45% of respondents in India strongly agreed they can anticipate the risks of replacing human work with technology, compared with 21% globally. Germany, the Netherlands, Ireland, Switzerland and Japan were generally less optimistic. In Japan, just 12% strongly agreed that workload is manageable, compared with 26% globally. Respondents from the US were generally in line with the overall global percentages.
It makes sense that certain sectors that are either chronically under-resourced, such as government and the public sector, or that are fully in the throes of disruption, such as EU&R, have the least confidence in their abilities and the level of action they have been able to take in these six important areas. It’s also logical, then, that tech-oriented industries such as TMT, which tend to have a professional, in-demand workforce, are more confident of their firms’ abilities and preparedness for the future. Countries and regions that are more optimistic will see that the sentiment is contagious. And a more optimistic workforce will feel free to do their best work and be their best selves.
In September 2021, PwC commissioned a global survey of 3,937 business executives and HR-focused leaders. The survey polled leaders in 26 countries and regions and 28 industries.