The world business landscape changed drastically in 2020. The historic COVID-19 pandemic accelerated trends that had been slowly building for years, forcing companies and employees to change the way they work virtually overnight.
Nearly a year since the pandemic’s start, worldwide vaccine rollouts promise a return to some semblance of normalcy. Still, companies across the globe are left with one burning question: what will normalcy at work look like in 2021—and beyond?
While forecasters are optimistic but uncertain about the worldwide economic recovery in 2021, experts agree that the business world will continue to change significantly over the next five years. Read on to discover five trends experts predict will shape the future of work over the half-decade.
More Employers Will Track Employee Data
The COVID-19 pandemic prompted companies worldwide to turn to remote work—and forced employers to seek new ways to track employee performance. To better understand how workers handle their jobs outside the office, HR teams increasingly turn to new employee data-collecting tools.
A recent survey by Gartner shows that 16% of companies plan to increase their use of technology services to measure employee productivity, engagement, wellbeing, and more. By tracking when employees are active on their work computers, how they spend their time during the workday, and how frequently they use communication mediums like chat or email, employers better understand employee behavior and performance—no matter where they work.
The trend of tracking employee data began before the pandemic. A 2018 Gartner report revealed that half of 239 large corporations observed employee email and social media accounts, gathered their biometric data, and collected data on in-person employee meetings. In 2019, Accenture reported that 62% of C-suite executives used new tracking methods to monitor their employees.
While collecting employee data is part of the new normal, employers must understand the adverse effects of increased surveillance. Accenture’s survey revealed that 52% of employees lose trust in their employers when the employer mishandles data. Other employees report feeling “demoralized” or “incredibly stressed out” about the heightened tracking. Meanwhile, research proves a measurable connection between employee happiness at work and a company’s overall performance. Considering the importance of keeping employees engaged—not to mention ethical concerns about privacy and trust—employers must decide whether the gains of employee tracking outweigh the costs.
Automation Will Bring Massive Job Loss—And Creation
Automation, which includes the advent of artificial intelligence (AI), machine learning, and robotics, will lead to large-scale workforce upheaval in the next five years. As automation displaces workers from many existing jobs, it will simultaneously create new roles for workers to fill.
According to the International Monetary Fund (IMF), the pandemic is accelerating automation, creating a severe disruption scenario for workers. The IMF estimates that automation will displace 85 million jobs by 2025. Over that time, 43% of companies plan to decrease their workforce and increase technology integration, while 41% expect to use more specialized work contractors. By 2025, machines and humans will be responsible for approximately the same amount of work, the IMF says.
While automation leads to job losses across some sectors, it will also spur substantial job creation across others. The World Economic Forum (WEF) expects that the robotics revolution will create 97 million new jobs, many of them in AI, engineering, product development, and content creation.
The WEF attributes the increased demand to humans’ advantage over machines in capacities like managing, communicating, reasoning, and decision-making. In short, as companies turn to machines for more routine jobs, they will increasingly need humans to oversee those machines through tasks such as data analysis, maintenance, creation, and more.
More Businesses Will Focus on Upskilling Their Workers
Companies will invest heavily in retraining their workers to meet the growing demand for employees to fill new roles. The WEF reports that 50% of employees will need to learn new skills to stay in their current position for the next five years.
By enabling companies to fill critical roles from within, upskilling programs increase employee retention, decrease turnover costs, and help companies stay competitive in the marketplace. That’s why Saadia Zahidi, WEF Managing Director, sees employee reskilling as a critical business imperative. “In the future, we will see the most competitive businesses are the ones that have invested heavily in their human capital – the skills and competencies of their employees,” says Zahidi.
Companies recognize the importance of retraining their employees. According to a recent survey, 66% of employers believe they’ll see strong ROI within one year of investing in employee upskilling programs.
Companies Will Shift to Scalable Hiring Practices
While companies help employees develop new skills, they will also change their approach to hiring. COVID-19’s global recession reinforced the importance of remaining agile to quickly respond to changing market conditions. As a result, 32% of employers say they will practice scalable hiring by looking for flexible workers rather than full-time employees.
The average cost of hiring a new employee is $4,000, according to Glassdoor. These costs include recruiting, paperwork, onboarding, and the potential for employee turnover. To minimize costs, companies will turn to contractors, freelancers, or specialists. HR teams can quickly hire these workers to complete specific tasks and offboard them easily when their job is complete—helping companies avoid the up-front costs of hiring or the time-intensive employee termination process.
Aside from cost savings, opting for a scalable workforce allows companies to remain flexible. When changing market conditions heighten or decrease demand for a company’s services, employers with a scalable workforce can quickly add or reduce employees accordingly.
Along with cost savings and increased flexibility, employing a scalable workforce brings new risk. HR teams that manage freelancers or independent contractors must ensure they are correctly paying and classifying these workers. When companies do not comply with international independent contractor regulations, they can face millions of dollars in fines and legal fees, along with outright business bans. Working with an International PEO (Professional Employer Organization) provider helps companies maintain hiring flexibility while also mitigating risk in foreign markets.
The Physical Workplace Will Endure, But Evolve
As the pandemic accelerates a global shift to remote work, some employers and employees question if, rather than when, they will return to the physical workplace. While many companies have instituted permanent remote-work policies, office life will continue after the pandemic—albeit in a changing way.
In a recent survey conducted by Wakefield Research, 94% of employees reported a desire to return to the physical workplace at least once per week following the pandemic. Nearly half (46%) said they wanted to be in the office full-time. Meanwhile, 73% of employees miss socializing with their coworkers in person, while 64% say they have fewer distractions at the office than at home. These numbers point to a clear conclusion: while remote work is here to stay, the in-office experience provides irreplaceable value to employees.
Statistics reinforce the idea that both employers and employees recognize the physical workplace’s enduring role. According to recent research by global commercial real estate firm Cushman and Wakefield, employers will create 5.1 million in-office jobs in the U.S. over the next decade. This number is up from 4.5 million jobs between 2010 and 2020.
While companies maintain physical workplaces, the days of a strict 9-5 office schedule are over. In its place, companies will adopt flexible work models. Some will allow employees to remotely work while having access to regional office hubs. Others will implement the 3-2-2 working model, in which employees spend three days in the office, two days at home, and two away from work entirely.
Regardless of the specifics, employment models that combine on-location work with remote work are the future, says Harvard Business School professor Ashley Whillans. “Employees will demand greater flexibility and organizations will require it,” Whillans said. “What this flexibility will look like will vary depending on the sector and geographic location.”
Embrace The Future of Work With a Global Growth Leader
Staying ahead of changing workplace trends allows employers to attract top talent, keep existing employees engaged, and maintain a competitive edge in the marketplace. As the business world continues to evolve at an ever-faster pace, companies that embrace change position themselves for long-term success. Velocity Global helps companies balance current needs with future goals when growing internationally.
Our global employment experts have unparalleled experience guiding companies through the hiring process in over 185 countries worldwide—all while helping our clients maintain the flexibility they need to adjust to new global trends. Find out how our expansion solutions and global expertise can help your company future proof its growth plans.