INDUSTRY INSIGHTThought Leadership

The future of work: rethinking the workforce model

Technological innovation, the impact of advances in digitalization on companies’ workforces, and the sheer pace of change are bringing about a transformation of business models to cater to the workforce of the future.

Digital and technological advances are evolving faster than ever before and changing how work gets done, who does the work, and what work looks like, according to Matthias Thorns, Deputy Secretary-General at the International Organization of Employers (IOE).

Thorns participated in a masterclass at the Annual GPCA Forum entitled ‘The future of work: Rethinking the workforce model for high-performing companies of tomorrow,’ alongside participants from Accenture and Borouge.

Technology is today considered to be one of the most disruptive megatrends alongside climate change, globalization, and demographic changes, says Thorns. “Companies need to understand the impact of these trends and react to them. Questions which arise with regards to the fast-moving pace of technological change are particularly related to the skills challenge: How do companies ensure they have the skills they need? Skilling and reskilling become fundamentally important in view of the fact that the half-life of skills nowadays is 2.5 years to 5 years,” he says. “In most instances, companies cannot just wait for governments to act but need to engage by rolling out training programs and learning academies for upskilling, hosting digital deep dives, and so on. The competitiveness of the company rests in its ability to ensure it has the right skills at the right time in the right place.”

The impact of technological innovation on employment is “huge,” says Thorns. This includes the way companies organize work, such as working time, location, who will do the work, and monitoring systems; the employment status of workers; the evolution and expansion of skills needed by companies; the coverage of workers in new forms of work by social protection schemes, and so on, he says. Companies need to fully engage their workforce in addressing these issues at company level, he adds.

According to the findings of a recent IOE company survey, a determining factor for companies is the need to engage employees in the transition, rather than “herding them through it,” says Thorns. To succeed, employees can be offered pathways to professional and personal improvement–and they should be engaged in the process of change, rather than merely being informed that change is coming, he says. “The workforce is often more agile than employers think, and keen to participate in skilling and upskilling. A study from Accenture, for instance, shows that more than 65% of workers say it is important to develop their skills to work with intelligent machines in the next 3-5 years.”

The survey also showed the need to “shift the mindset to create an IT culture that promotes more innovative, responsive, and meaningful consumer and employee connections, rather than upgrading to new techniques, sophisticated tools, and technologies. Thus, the focus would be to accompany digitalization with programs to change employee attitudes and not just technology, while allowing plenty of time to do so. Mindsets can take years to change and not just months,” he says.

Some of the challenges are systemic and need a comprehensive response, such as the development of education and training systems that teach the skills needed in the labor market, and the modernization of social protection systems to ensure they cover workers in different forms of work.

According to an Ernst & Young study, only 29% of employers in the GCC countries feel that the education system in their country prepares students with the right technical skills for their job, says Thorns. “Employers’ federations have a key role to play in the governance of skill-building systems as well as in the modernization of labor markets,” he says.

The hunt, meanwhile, for fresh talent is an older problem, according to Thorns. Digitalization and technological progress, and the fact that skill demands are evolving at ever-faster rates have further exacerbated these challenges.

Part of the solution lies in tapping under-represented populations in the labor market, he says. Workforce-participation gender gaps remain wide in the GCC region—over 40% in Kuwait and Qatar, for example. Nationals and youth are also widely under-represented in the private sector in GCC countries, with nationals holding only 13% of digital jobs in Qatar and 5% in the UAE, says Thorns. A study by PWC’s Ideation Center and LinkedIn estimates there are 3.9 million inactive young men and women in the region who are part of the local talent pool, he says. “However, the challenge is not only to win talent but to retain it,” he states. Staff retention is a major concern for GCC employers. A special focus needs to be given to millennials, who in particular expect much more from their employers, says Thorns.

“Millennials regard jobs as opportunities for growth, maturation, and development. They want to be part of a management culture that values the individual and places an emphasis on acquiring and improving skills. Moreover, according to Deloitte, over 60% of millennials think that seven months of tenure means they are loyal. A Deloitte survey found that 43% of millennials and 61% of Generation Z globally would leave their current employment for a new organization within two years. Catering to the needs of this new workforce, ensuring they receive the training they need, and the organizational structure they prefer, will become increasingly important,” he says.

The aim with regards to the hunt for talent is to “create a compelling and meaningful company culture to differentiate the organization as an employer and appeal to younger talent,” Thorns concludes.