Imagine a world in which the human resources function as we know it vanishes and is replaced by automation, outsourcing, and self-organizing teams. Or a world in which top talent is fought over so fiercely that the most adept tech workers hire agents to negotiate and manage their careers.
It may sound like science fiction. But the world of work is changing so fast that either scenario could become reality. Megatrends such as digitization, the rise of automation, and shifting demographics are disrupting the way we work, and the way companies relate to workers. The dizzying pace of change makes it difficult to plan for — or even think about — the long-term. And with so many complex forces at play, making linear predictions based on recent trends is too simplistic.
We at PwC have spent some time envisioning four alternative future worlds of work, each named with a color. These admittedly extreme examples of how work could look in 2030 are shaped by the ways people and organizations respond to the forces of collectivism and individualism, on one axis, and integration and fragmentation on the other.
These scenarios can help organizations think through possibilities and how they will prepare to meet them. One prospect is that the world could move away from big company capitalism as technology enables small businesses and niche marketers to become more powerful. Or collectivism could take priority, as societies and companies work together through a sense of shared responsibility. Will “me first” prevail, or will societies come together for the greater good? Will digital technology mark the end for large companies, or will it enable large companies to slash their internal and external costs and become more powerful?
Of course, it’s likely that the future will be one in which elements of all four of these worlds — Red, Blue, Green, and Yellow — are influential. But the logic behind each world holds significant implications for those in charge of hiring and developing workers, and for those working in these worlds.
The Red World
In the Red World, in which individualism and fragmentation reign, small is powerful. Technology allows tiny businesses to tap into the vast reservoirs of information, skills, and financing that were formerly available only to large organizations, and it gives them power and incredible reach. Innovation and people are inseparable, which will trickle down to how companies find, manage and reward workers.
People strategy. HR no longer exists as a separate function, and entrepreneurial leaders rely on outsourced services and automation for people processes. Full-time “permanent” employment is only around 10 percent of the workforce. Automation and digital platforms become the norm to find talent and to match workers with employers, and skills with demand — like a superpowerful LinkedIn. Imagine apps and tools that alert you when your organization needs new skills or capacity, based on the conversations happening within your business.
Workers. Amid ferocious competition for talent, those with in-demand skills command the highest rewards (far more so than they do today). Rather than centering exclusively on compensation, contract negotiations involve factors such as the ownership of intellectual property and the freedom to work. Workers are left to themselves — to sink or swim, and to identify their own skill gaps and build their expertise. Performance is judged mainly on short-term results — this is not a world for the slow and steady, but for the rock stars who can deliver results, and fast.
The Blue World
In the Blue World, an individualized and integrated world, global corporations take center stage, becoming larger, more powerful, and more influential than ever — some even have more sway than nation states. Companies see their size and influence as the best way to protect their prized profit margins against intense competition from their peers and aggressive new market entrants.
People strategy. The science of human capital has advanced significantly to the point where the chief people officer, sometimes known as the head of people and productivity, has a sophisticated understanding of the connection between technology and performance. Top talent is fiercely fought over. Like the sports stars of today, the best performers of tomorrow need to engage an agent to negotiate and manage their career. HR uses advanced metrics to predict future talent demands and to measure and anticipate performance and retention issues, and deploy sensors and data analytics to continuously measure and optimize performance.
Like the sports stars of today, the best performers of tomorrow need to engage an agent to negotiate and manage their career.
Workers. Companies prize a small group of “super-workers,” who maximize their productivity with physical and medical enhancement techniques and equipment. Imagine employers who provide cognition-enhancing medication to their employees — and workers who gladly take it in order to gain an edge. As most people struggle for temporary work, a corporate career separates the “haves” from the “have-nots.” Companies provide many of the services, from children’s education, eldercare and health care, that previously came from the state or other sources. Those without a corporate career find it much more difficult to obtain those services. Workers consent to have their data, health, and performance monitored obsessively, often in real time. Those who thrive under the relentless pressure to perform will reap excellent rewards, as will in-demand contract workers with specialized skills.
The Green World
The Green World — collective and integrated — is driven by the need for a powerful social conscience. Reacting to public opinion, increasingly scarce natural resources, and stringent international regulations, companies push a strong ethical and ecological agenda. Social conscience, environmental responsibility, diversity, human rights and fairness are corporate imperatives.
People strategy. The CEO drives the people strategy for the organization, because the people in the organization, their behaviors, and their role in society have a direct link to the organization’s success or failure. HR — renamed “People and Society” — takes on a new role as guardian of the brand, and assumes marketing, corporate social responsibility, and data analytics functions. Success depends on creating the right culture and behaviors and on guarding against sustainability and reputational risk throughout the supply chain. Many people decisions, from diversity ratios to the number of layoffs companies can make during a downturn, are tightly controlled by regulation. Compensation strategies revolve on total rewards, which recognizes corporate citizenship and good behaviors along with performance.
Workers. Employees, no less than corporations, are held to high ethical standards. Workers understand that their conduct and ethics are taken seriously and that performance is assessed against a wide range of measures, including how efficiently workers manage their travel and resources. Employees enjoy family-friendly, flexible hours and are encouraged to take part in socially useful projects. They trust their employers to treat them fairly in terms of pay, development, and conditions, and in return, are expected to reflect the culture of the company in their approach and behavior.
The Yellow World
In the Yellow World — in which collectivist impulses thrive in a fragmented world — workers and companies seek out greater meaning and relevance. Humanness is highly valued. Workers find flexibility, autonomy, and fulfilment, working for organizations with strong social and ethical records. There’s a strong desire to contribute to the common good.
People strategy. The traditional core functions of HR are held by business leaders, the collective, or taken on by new worker guilds. The concept of fair pay predominates. Organizations and workers respect one another’s needs and capabilities. Conflicts between technology and automation, on the one hand, and humanness and individuality, on the other, will usually be resolved in favor of the latter. Because customers are likely to resist automation, companies will offer human driver options on self-driving taxis or put stamps on products to indicate they were made by people rather than by machines.
Workers. Workers feel the strongest loyalty not to their employer, but to other people with the same skills or cause. This is the perfect breeding ground for the emergence of new worker guilds — far more powerful than today’s unions — that develop in order to protect, support, and connect independent workers, and often provide training and other benefits that have traditionally been supplied by employers. Guilds assume responsibility for members’ well-being, pensions, training, and even their university educations.
We’re aware that some of these developments may seem unlikely or even whimsical. But there’s a lot we don’t know about the future. And right now, that uncertainty is raising a lot of questions and anxiety. Imagining these four worlds offers one way to stop wondering and speculating and start planning. From each world, work backward by thinking about what your workers and HR function will need. How might the characteristics of each world come together to create a scenario that is uniquely yours? In each scenario, how will your talent needs change? How can you attract, keep, and motivate the people you need? How will your organization need to evolve to stay competitive?
The answers may not seem obvious today. We may not know all the answers. But by imagining different scenarios and taking steps to plan now, we can face the future of work with a greater sense of confidence.