May 19, 2022
May 19, 2022
The pandemic didn’t invent workforce issues related to accelerated digitalization, flexible working, reskilling, and upskilling or diversity, equity, and inclusion, but it certainly exacerbated and hastened them. The combination of these issues has created two significant risks for companies. First, the world of work that organizations have invested in is no longer fit for purpose. Digitalization and the democratization of work require fundamentally different ways of connecting talent to work. The use of work options such as automation and gig workers presents both opportunities and risks. Second, the established, functional response to work and workforce issues is no longer fit for purpose. Today’s hiring policies, compensation administration, and workforce planning, to name a few, are all responding to new challenges with old solutions. So, is it any surprise that we see companies of all sizes and sectors struggling with talent management while responding to the opportunities presented by digitalization?
If the ways we design work and our organizations are no longer creating value, then it’s time to rethink both and introduce new ways of functioning—a new work operating system. In a new work operating system, organizations can apply four principles to create the internal changes needed to meet the external moment, whether it’s today’s pandemic, supply chain, and inflation issues, or unknown future disruptions.
Organizations are holding themselves back by continuing to define work as “jobs” and workers as “job-holding employees.” In a new work operating system, current and future work is deconstructed into skills and capabilities required to perform the given tasks. Freeing work from the “job” is an act of agility. By doing so, organizations can more clearly isolate the best option for performing a given body of work, whether that may be through an employee, artificial intelligence (AI), or a gig worker.
From corporate leaders to employees, most people tend to see a binary narrative between automation and jobs. And while this may be true in some circumstances, an “either/or” mind-set artificially limits organizational opportunity. By deconstructing jobs, leaders more clearly see where a particular type of automation (robotic process automation, machine learning, collaborative robotics, etc.) can substitute for human work, augment workers’ skills, or transform human work. In fact, one-third of executives say that the impact of automation on jobs will deliver the biggest return on investment in the next two years, according to Mercer’s 2022 Global Talent Trends report.
The pandemic plunged the world into alternate work arrangements as remote work became dominant for numerous workers. This experience has elevated the desire among many, but especially women and minority populations, to demand continued flexibility going forward. In the new work operating system, managers think beyond organizing work in fixed jobs. Instead, they consider various ways in which talent can engage with work. Internal and external talent marketplaces, which match workers with available opportunities, potential roles, and training based on their skills, interests, and preferences, have grown in popularity, for example. Marketplaces allow for the rapid deployment of employees or gig workers to where their skills are most needed. They also provide a framework for borrowing talent from other departments or companies. Strikingly, 40 percent of executives say they used AI-driven tools to uncover skill insights and power their internal talent marketplaces last year. An additional 48 percent plan to invest in such technologies this year, according to Mercer’s report.
Limiting human work to performing specific roles people are hired for has far too high of a frictional cost for our rapidly evolving world. Future-fit organizations eliminate that cost by increasingly flowing talent to work. Specifically, future-fit companies will embrace three models of connecting talent to work: fixed, flex, and flow. Fixed roles will continue to be used in situations where a convenient volume of work or compliance requirements necessitate a more traditional job. Flex roles involve talent in a traditional job, but with the flexibility to express their skills or acquire new skills in another function. Flow roles, meanwhile, will be unbounded from jobs completely and seamlessly connect talent with projects and assignments by matching skills to specific tasks.
These four principles can generate unparalleled organizational resilience and agility. Importantly, reaping these benefits does not require an immediate, complete organizational overhaul. Instead, most companies can likely identify one to two areas where prototyping the new work operating system can offer immediate benefits. Perhaps there are areas where the work is changing so quickly that traditional job descriptions and training cannot keep up. Or, perhaps automation presents some new opportunities. Maybe there are areas where full-time workers for some positions are hard to find, and new work arrangements are being considered to fill the gaps. However a new work operating system gets piloted, it can coexist with more traditional systems while building an organization’s ability to adapt and transcend the more conventional and limiting concept of “work with jobs.”
The rapidly changing nature of work requires a new work operating system. To successfully implement it, boards of directors will need to fully understand and stay on top of the shifting profile of risks associated with new ways of working. For even as resilience and agility are optimized, continued success rests on the understanding that we all live in a state of perpetual obsolescence.
Ravin Jesuthasan is the global leader of transformation services at Mercer.
NACD: Tools and resources to help guide you in unpredictable times.