The Future of Work: A Glimpse into 2024’s Transformative Trends
As we enter 2024, organizations must consider trends affecting how they operate and manage their goals in the year ahead. In this blog, we explore trends related to skills and talent experience predicted to be significant organizational focus areas in 2024.
Adapting to a skills-based economy
As disruptions in the labor market ushered in a new skills-based economy, organizations learned that they had to adapt to this new reality, and both employees and employers started to realize the importance of extending qualifications beyond obtaining a degree. In the last decade, we’ve seen considerable changes in the labor market, such as the Structural and Cyclical Resets. According to an article by the Harvard Business Review, the Structural Reset became apparent during a tight employment market in the late 2010s, where employers were required to reduce degree requirements when filling talent gaps in middle to high-skilled positions. This shifted the focus to hiring based on demonstrated skills and competencies.
Next, the labor market experienced the Cyclical Reset during the COVID-19 pandemic. During this period, forgoing degree requirements became far more pronounced, with a rising need to find skilled workers, especially in the health sector. Harvard Business School reports that since the start of the pandemic, resets removing degree requirements occurred in 27% of occupations. These changes were most likely a result of a cyclical labor shortage.
Deloitte reports that 73% of business executives expect talent shortages in the next three years, and 70% of respondents are pivoting to sourcing candidates for their skill sets. Deloitte’s research presents an example of a global commercial real estate firm, Cushman and Wakefield. The firm has begun looking into how the skills of those who serve in the military, such as leadership, engineering, and strategic planning, can be applied to different industries. Objectively, the rise of skills-based organizations highly depends on the industry and skills required in a particular occupation. In some organizations, however, individuals can be valued according to how their skills match the organization’s goals rather than their position alone. Organizations like McDonald’s, Amazon, and Vodafone are among a number of organizations globally that are investing in reskilling programs and recognizing reskilling as a strategic imperative by providing their employees with opportunities to train for new roles internally.
Adapting to a skills-based economy and tackling the skills gap within organizations can be challenging for employees and organizations. Read more about how to tackle skill gap changes through effective leadership here.
Prioritizing skills training and ongoing development
In an economy centered around skills, organizations have the chance to reassess their employee lifecycle, offering ongoing skills training opportunities essential for project completion and goal achievement. Udemy, an education technology organization with an online learning platform, has reported a year-over-year increase in skills learning. Udemy’s 2024 Global Learning and Skills Trends Report has announced nearly 10 million new global learners over the last year, raising the demand for skills training to record levels.
Further, according to a LinkedIn report on global talent trends, organizations highly rated for employee training have a 53% lower attrition rate. Here’s an overview of how companies are evolving into skills-based organizations based on Udemy’s research:
- Shifting the focus from “We need people who can fill these jobs” to “We need people who have these skills.”
- Transitioning from barriers in technology and access to qualified candidates to barriers in processes, practices, and organizational inertia.
- Evolving organizational structure where functions are siloed into organizational fluidity where work is distributed among skill groups.
A skills-based approach can also help leaders better invest in their teams, thus increasing success in navigating change and maintaining employee engagement. In their report, Udemy identifies four critical skills for successful modern leaders:
- Creating an inclusive culture
- Collaborating through technology
Considering these criteria for modern leadership, interest in development areas such as Emotional Intelligence (EI), management fundamentals, and communication has also been growing steadily.
As dialogue around leadership development continues to expand, MHS offers a number of tools and solutions to help further this conversation and offer avenues for actionable planning and development, including the scientifically validated Emotional Quotient-Inventory 2.0® (EQ-i 2.0®). The EQ-i 2.0 is a comprehensive measure of an individual’s EI and provides valuable insights that can be used to coach strengths and weaknesses in different aspects of emotional and social functioning.
Improving the employee experience
Another trend expected to continue this year is a growing emphasis on employee experience. At first glance, the concept of employee experience may seem straightforward. However, organizations must provide employees with an environment that adapts to their needs as they change. Forbes describes employee experience as meeting employees’ expectations during pivotal moments like the first day on the job, performance reviews, or even major personal life events.
Mercer conducted a global survey to better understand how workforce needs and attitudes have changed in response to the 21st century landscape. Their findings on emotional well-being indicate that “nearly half of employees report feeling stressed in everyday life, with higher levels of stress in younger populations.” With respect to addressing employee stress and burnout at work, Mercer suggests the following approach to fostering a psychologically safe workplace:
- Show care, consideration, and acknowledgment of each individual.
- Maintain two-way and open communication for setting clear expectations and managing work-life balance.
- Recognize employee efforts and contributions, and respect sharing of opinions and perspectives.
People have unique needs, and supporting and understanding these needs on the micro and macro level will enhance employee experience. Recognizing diverse personality types in the workplace elevates communication, collaboration, and conflict resolution, leading to a more engaged and productive team. This understanding also allows for personalized development and leadership approaches, contributing to a positive and inclusive employee experience.
Adapting to the rise of AI, generative AI and automation
The rise of artificial intelligence (AI) is evidently changing parts of our workforce. According to the McKinsey Global Institute, as much as 30% of current work hours in the U.S. economy could be automated by 2030. Although some types of work could be replaced by automation, we also expect to see new types of work created that can work closely with AI.
Organizations need to implement a skills strategy that involves reskilling their employees to stay ahead of competitors and leverage the AI revolution. A new study by IBM reveals that over the next three years, executives estimate that 40% of their workforce will need to reskill as a result of AI and automation implementation. Harvard Business Review suggests that reskilling workers is necessary to handle disruptions caused by AI changing the nature of work.
Although AI can automate the process of certain roles, human intelligence is far from becoming obsolete. Udemy maps out an example of how human intelligence can work together with AI to optimize an organization’s performance. In this example, AI can perform a skills gap analysis by identifying skills needed versus skills available within an organization. A person then enters the loop by verifying the analysis in relation to organizational goals and begins to activate the required skills in the workplace.
More than anything, the rise of AI represents another significant change and shift in how organizations do business. A key part of successful change management is understanding the personnel side of the experience, along with individual and organizational reactions to change. People respond to changes in their environment in different ways, and a person’s comfort with and ability to adapt to change is an important factor for their success at work.
Have questions about any of the trends mentioned in this blog? Get in touch with a member of our team.