The confluence of digitization, machine learning, aging and shifting populations, polarization, consumerization and alternative ways of working have directed to a complete transformation of business models. Potent macroeconomic forces are changing the business landscape. These forces include – a shift in the demographics, a rise of greater individual choice, an increase in client sophistication and revolutionizing of technology.
These factors had been identified by the Manpower Group almost a decade earlier and their structural impact is evident today in the emergence of a Skills Revolution. From the rise of robots, globalization and mass migration to the shock vote of Brexit, the U.S. elections and wider geopolitical uncertainty, it is an accurate assessment to conclude that a Human Age has arrived.
In this Human Age, technology is transforming the need for physical infrastructure and assets and enabling organizations to create value through capture, analysis and exchange of vast amounts of data. Developing job skills of the future is crucial for candidates to remain employable in this environment of heightened risk and compressed margins. Agility and performance are critical.
Here’s a closer analysis of the transforming of business models to accurately evaluate its impact on the workforce of today:
Technology and digitization are transforming business models today and will continue to do so. This unprecedented growth of innovation and global outsourcing has to the led to the emergence of the skills revolution. The Skills Revolution can be defined as an incipient need for organizations to help people upskill and adapt to a fast changing world of work.
In order to maintain relevance in this ever-changing world of work, skills and talent matter. Skill cycles today are shorter and 65 percent of the jobs Generation Z will perform do not even exist yet. The need for robust talent pipelines with relevant skills and an appetite for continuous learning where the focus will be on developing resilient careers versus jobs which only pay the bills will be greater than ever.
As the business models continue to transform, people with the right skills will increasingly call shots, create opportunities and choose how, where and when they work. Those without these essential abilities will look to the future and are not able to see how their circumstances will improve.
Helping people upskill and adapt to this fast-changing world of work will be the defining labor challenge of our time. In the future, a more attractive and sustainable approach will be required. Businesses should ask themselves – how are we ensuring our workforce is agile enough so we can continue to compete?
Finding the right balance of technology, talent and human connection is what will enable both people and businesses to succeed. The move to non-asset intensive platforms with access to people, reach and value creation will define success. It will be these new business models and candidates who understand their network effects that will be able to compete and win, capturing competitive advantage which is increasingly transient.
As technology continues to evolve the way companies operate, business models with fewer assets will dominate. Interactions and information will bring together producers and consumers in exchanges that create value for both and lend a competitive advantage to the platform business. Organizations like Amazon with a base of more than 300 million active users will continue to leverage prime efficiency and seemingly infinite choices. A trusted brand with an easy to use interface will have little need to advertise and hence, will be able to move into newer markets such as logistics, groceries and music overnight.
Loyal consumers will enjoy even more ease of consumption and innovation. At the same time, these mighty platforms will benefit from their exponential ability to create greater value out of an existing value chain and continue to dominate the purchase environment.
This will upset the old models of business, out-compete them and in some cases lead to their complete extinction, given their inability to contend with the lower prices, greater choice and online convenience that internet platforms voluntarily offer. Bookstores, video stores, taxi companies and travel agents are already the casualties of this transformation; others need to watch their back. Sectors like logistics are ripe for disruption as old favorites may decelerate in anticipation of supersize newcomers. The fine line between winner and loser candidates of this age will undoubtedly be their bi-directional networked value creation, global and local interaction, and of course, speed.
Some of the most successful newcomers in the Human Age have been platforms like Alibaba, facilitating exchanges between buyers and sellers, and Uber, defining on-demand transport without the ownership of either vehicles or drivers. Both of these platforms create opportunities beyond borders with lower costs and seemingly limitless scale.
Amazon’s Alexa-enabled Echo is also upending traditional players, paving the virtual way for thousands of online services, skills and applications, from cookbooks and smart home control to management of shared portfolios. Taiwan’s online marketplace, Pinkoi has more than 20,000 independent designers and artists showcasing their work with customers across 47 countries.
Artisans, entrepreneurs, app developers, freelancers, small businesses, and individuals can come together and exchange more ideas and resources more than ever before. As Millennials and Generation Z especially go ever more digital – over a third are online almost constantly – the potential of platforms is only going in one direction: up.
An advancement of technology, transparency, choice and control means new models of business are emerging, forcing the shift from pipeline businesses, intermediaries and mass markets to platform businesses and their one-size fits-one approach. Consumerization is on the rise. Individuals today, whether customers or employees, want to decide where, what and how to consume, work and live.
In the world of employment, this increasing candidate intimacy means people will want more than access to jobs: they will want value, choice and a personalized approach to help progress their careers and lives. Pure transactional relationships between employers and candidates will build neither trust nor brand loyalty as the applicants believe there is no job for life, yet long working lives ahead. Employers will need to do things fundamentally differently to attract, retain and engage people for varied careers over the long-term, even if they will not be the employer for life.
Talent will be the single most important factor that will ensure competitiveness, inclusive growth and the ability to transform and compete with newcomers. Work is being reorganized and businesses will need to adopt more sophisticated people management practices to respond to this pressure of alteration. Digitization and demand for workforce data will play a more critical role than ever in enabling better and faster decision-making and enhancing market transparency.
Leaders will need to rethink the structure of work and be clear which roles could be done where, by whom or by what. An evident indicator of this fact is that 44% of business leaders say that they are already using workforce data to predict business performance. Hitachi is using sensors to capture happiness metrics from its Human Big Data, while Bank of America uses sensors to understand how group dynamics impact performance.
Company expectations will continue to shift as they demand more data-based people decisions. The playbook is changing and basic concepts of scale, value and competition are being redefined. Human resource management must shift from an art to a science and will require a more coordinated, precise talent strategy that aligns with the real-time needs of the business.
As the business models continue to develop, the polarity between old and new will create tensions in politics, media, societies and even within companies. Old versus new strategies, technologies and ways of getting work done will mean that becoming more agile will cause higher internal friction. This can impact decisions and progress, just as it does in the disengaged communities that do not experience any growth or development. To mitigate these dangers effectively, companies will need to adapt so that they can keep the business running smoothly with one hand while preparing for a different and uncertain future with the other.
Leaders steering into uncharted waters will need to drive innovation, disrupt and blaze a trail towards new ways of working while managing short-term goals and shareholder demands. In this increasingly choppy environment with the dichotomy of achieving today’s targets while preparing for tomorrow, responsive and responsible leadership will be required to drive future competitiveness, growth and inclusiveness.
The countering forces will be strong and the desire for protectionism, conformity to old norms of security and predictability will cause significant tensions and political polarization. In this environment of unpredictability, individuals with in-demand skills will continue to call the shots while those without will be at greater risk of being left behind. Finding the right balance of technology, talent and human connection will be what enables both people and businesses to succeed. For greater insights into understanding these job skills of the future, consult our experts at Manpower today.