In the last few years, business leaders have turned their search for creative, innovative talent into something of an arms race. They understand the competitive advantage of being a highly rated place to work, and they are striving to show just how much they value their employees. The recreation rooms and wellness centers springing up at many companies have helped in recruiting, but they can also be seen as superficial. To attract the best and brightest people, young and old, companies must take a stand on profound questions being raised today about the value of human activity in the workplace. These questions concern not just Instagrammable workplaces and perks; they concern the context and the content of organizational activity. People want to do “good work,” in two ways: They want intrinsically rewarding experiences, and they also want to make a contribution that fits with their values.
Part of this new focus on the nature of work has to do with technology. Robots and artificial intelligence (AI) are threatening to replace some human tasks, and it isn’t yet clear what jobs will be left or how jobs will be reconfigured. But what humans will most likely focus on are the more participative, collaborative, and transparent aspects of business. As companies seek their employees’ commitment, not just their clocked-in time, people will naturally think less transactionally and more strategically about their jobs; the emphasis will be on the roles people play in how tasks get done, or the input, and the value of that work, or the output.
Typically, institutions lag behind when technological revolutions occur. It took almost a century to relieve the appalling working conditions that were initiated during the Industrial Revolution. Laws designed to regulate work in the age of AI are not yet in place. We believe companies can and should act now to find their own 21st-century definition of good work and develop strategies to deliver it, not only for the sake of employees but because it will keep them competitive (pdf).
What is good work (pdf) in today’s world? We believe it should, at the very least, involve a decent workplace context: fair pay, tolerable levels of change, autonomy and control over one’s work, and a chance for fulfillment. Employees who give customers what they want because they are inspired by their job will create a powerful feedback loop that increases business. For some, good work might include a satisfying work–life balance and opportunities to travel. Good work also encompasses the nature of the organization: Is it inclusive, diverse, and respectful? Do people’s values align with those of the organization? Do employees approve of the goals of the enterprise and see how their efforts contribute? There is typically an element of meaningful purpose: Is the organization, in the view of employees, helping to improve the world around it and make life better?
Not every company can save the world. Many areas of work, such as consumer goods and services, can present ethical challenges for people for a variety of reasons. But how employees experience their day-to-day job, in any industry, is something their bosses can and do influence.
How employees experience their day-to-day job, in any industry, is something their bosses can influence.
If you assume, as we do, that providing a good work experience is truly a significant source of competitive advantage (pdf) for business and government because it leads to better performance and better outcomes — maybe the best source of advantage in a world of complex human–machine interaction — then it is clear that most enterprises need to put considerably more effort into it.
Dissatisfied Rank and File
Large numbers of people are not satisfied with the amount they are working — they feel it’s either too little or too much — and the effect their workload has on their life. PwC’s study “Preparing for Tomorrow’s Workforce, Today” shows that two-thirds of companies are failing to make workloads manageable, and 80 percent don’t prioritize programs to help workers’ well-being or mental health, even though they realize these issues are important. The World Health Organization describes stress as the “health epidemic of the 21st century.”
Myriad factors contribute to employee dissatisfaction. The development of AI makes certain changes inevitable. When jobs are broken down into tasks and some of those tasks become automated, companies need to restructure and revalue people’s contributions. In more and more countries, a job is no longer expected to last a lifetime or lead to a livable pension. People starting employment today will likely retire much later than their parents and work on a much less secure basis, changing jobs often over their working life. Benefits packages and pay policies, however, are still mired in the old “work nine to five, retire at 65” world. The gig economy, the threat of robots, and the overload of 24/7 connectivity are all taking a toll.
Our most recent research explores the factors that can make a difference in creating good work. Our global survey of more than 1,200 business and human resources (HR) leaders in 10 industry sectors in 79 countries clearly shows just how important the human side of work is to people. Working with Lynda Gratton, professor of management practice at the London Business School, we identified 45 organizational capabilities — defined as the ability and the capacity to perform specific tasks that benefit organizations — that are important in today’s working world. We then asked survey respondents which of these capabilities were most vital for the future of their organization. The five selected most often were all related to improving the nature of work: building trust, valuing human skills, supporting mental and physical well-being, managing workloads, and having work spaces that encourage collaboration and creativity.
The survey also asked respondents if their business was taking action to develop these capabilities and others they cited as important. By analyzing these two sets of answers, we identified areas that respondents ranked as highly important for the future but in which relatively low levels of implementation had taken place. This result suggested that it’s a struggle for companies to develop capabilities that engender a good work experience. The results also identified one of the reasons: Organizations are not using technology to help them deliver better on-the-job experiences. Five of these 10 underdeveloped capabilities that put companies at risk — that is, important things that companies are not doing — involve the use of data analytics to make jobs better (see “Making ‘Good Work’ Work Better”).
Making “Good Work” Work Better
The top 10 organizational capabilities companies should be developing but aren’t.
- Using big data and advanced analytics in workforce decision making
- Using data to monitor the skills gap in the workforce
- Using data analytics to eliminate bias from hiring and rewards
- Ensuring HR professionals are trained to use analytics for workforce decision making, predicting and monitoring the skills gap, and eliminating bias from hiring and rewards (capabilities 1–3)
- Developing policies and practices to encourage flexible working
- Managing workloads to ensure employees don’t burn out and do take vacations
- Using predictive analytics for all of the above
- Developing career path models that mirror how people work today, not simply up-or-out paths
- Creating work paths that nurture adaptability and agility by promoting rotations and skills development
- Designing work spaces that promote well-being and accommodate a variety of working styles
It’s as if the threat of what technology can do to the workforce is scaring people from using it, even in positive ways. Risk number four in “Making ‘Good Work’ Work Better” highlights the deficit of analytical skills in HR. Organizations understand that workloads are onerous, but they are not using analytics to plan schedules, create better work environments, or prepare for job skills gaps. Career paths are unclear, but training and development are not mapped against what future jobs might look like. There are concerns that bias is limiting diversity in the working world, but companies are not using technology to help here, either.
The remaining at-risk actions on the list involve the work experience itself. Providing flexibility is not yet a reality, even though research shows (pdf) how much it is valued and also shows how much different segments of the population, including older workers and parents, would value a chance to reenter the workplace on their own terms. And although wellness is a buzzword, companies say they are slow to reimagine workplaces in ways that foster well-being.
The Human Factors
At the heart of all the coming changes in the workplace are the people who will make them happen. People’s working life is their life story: They spend more hours working than doing almost anything else. And working lives are getting longer (pdf): Those who live to 60 years of age have around 93,600 productive hours; those who live to 100 have 218,400. The businesses that succeed will be the ones that create the kinds of narratives that people buy into and then their leaders support with action. These businesses will have to be flexible and adaptable. There is no one-size-fits-all approach; the employee journeys of a 25-year-old recent college graduate, a sales assistant, and a midcareer manager are not the same.
Analyzing the gaps between what business leaders know is important and where they are actually taking action, we have identified five specific areas in which organizations can do something now to lessen the stress and anxiety their employees are experiencing. They need to tackle burnout and boost vitality, build social resilience, encourage agility and adaptability, support “intrapreneurship,” and provide autonomy. We’ll take each in turn and describe practical steps to address these issues, with examples of what some companies are already doing. Our message here is to leadership: Unless senior managers actively embrace this agenda and empower HR to take these actions (see “A Crucial Role for Human Resources”), it will not happen. And unless this agenda’s implementation is measured and linked to management rewards, employees won’t believe it really matters to their boss.
1. Tackle burnout. If people are to thrive and maintain their well-being over longer working lives, then organizations must ensure that their working practices and processes don’t wear employees out. Careers today are marathons, not sprints. But long working hours and being available 24/7 are still seen as proxies for success. Further, it could be that people enjoy their work but simply don’t know how to slow down or are not encouraged to do so. Research has found that 20 percent of employees with the highest engagement levels also report burnout. These “engaged–exhausted” employees have mixed feelings about work: They report high levels of passion and stress concurrently. Companies that don’t recognize the symptoms may lose some of their most driven and hardworking people when they burn out.
Proactively managing workloads and encouraging recovery time — even short breaks — during the day is a good start to boost vitality, but this is easier said than done. The engaged–exhausted are hard to shut down. In 2014, crowdfunding platform Kickstarter started offering unlimited vacation time, but retracted the policy the following year because people simply weren’t using it. The social media management platform Buffer took a different route in 2015: It introduced financial incentives to encourage employees to take more leave. When that didn’t work, it implemented a mandatory vacation policy in 2016. Current data estimates that 56 percent of Buffer employees will have taken 15 days of vacation (or more) by the end of 2018, up from 43 percent. It’s too early to know whether the Buffer employees who took the time off will be more productive, but research indicates that the company could expect an uptick. Rested employees perform better.
Having role models also helps. In 2015, Barclays began to offer a range of flexible initiatives to support people at various stages of their lives, such as those pursuing further studies, parenting, or caring for other family members. The possibilities for workers include working from home, changing or condensing working hours, taking career breaks, and sharing jobs. By telling the stories of people who took up these options, Barclays encouraged more than 3,000 middle and senior managers to become “dynamic worker” champions. In 2017, 57 percent of employees identified themselves as dynamic workers, and their engagement scores, as measured by Barclays, outpaced those of others, with 5 percent higher scores in what the company termed “sustainable engagement.”
People naturally function in what are known as ultradian cycles, periods of high-frequency brain activity (about 90 minutes) followed by lower-frequency brain activity (about 20 minutes). Taking a recharging break every 90 minutes is especially important for workers using computer screens, as they make the brain overly active. There is some initial research that shows that trying to push through the rest phase of the ultradian rhythm triggers the body’s fight-or-flight response. That’s bad news, because it can cause the parts of the brain that handle logic to become less active.
Technology can help here: Some apps and software programs remind and encourage people to take physical and mental breaks regularly throughout the day. PwC Netherlands has made one such tool available to its staff for years. And work spaces can also be designed to reflect the natural rhythm of collaboration. Rows of cubicles are being replaced by communal tables and comfy corners so people can come together as a group and then break apart. Those table tennis and foosball tables, even if they’re not used regularly, at least signal that employers believe downtime is important. The key is to accommodate your employees with a working environment they want, while also recognizing that forcing spaces on people may not always work. A bad workday in an open-plan office isn’t for everyone.
2. Build social resilience. People may think of loneliness and its effect on their productivity as something that happens outside work, within their own personal networks, but that’s not the case. Despite this being the age of social platforms, rates of loneliness in the U.S. have doubled since the 1980s, and businesses are suffering from absenteeism due to depression. A long-running Harvard University study has found that close social relationships are more important than money in promoting happiness. It’s these close ties that protect people from life’s setbacks and help delay mental and physical decline. Social ties are better predictors of long and happy lives than are social class, IQ, or even genes. But the 24/7 work culture means that fewer people are finding friendships outside the workplace, loosening these important bonds. The number of people who report having a close confidant in their lives has been declining over the past few decades.
Organizations can help prevent this isolation by ensuring that their employees can not only disconnect from work more easily but also have the opportunity to create connections on the job. Managers play an integral part as role models by showing their commitment to avoiding excessive workloads and minimizing unpredictable hours. They can also promote more nurturing work networks. The tools they can use to help build networks are already present in common company software, such as Yammer and Slack. Of course, employees may need encouragement and a reason to use these systems. Tata Consultancy Services has developed its own social network called Knome — a slang term related to the interpretation of DNA — that connects 380,000 workers around the world in one online forum similar to Facebook, and is employed by close to 80 percent of the staff. They use it to exchange both private and work-related information, upload blog posts, and create communities with colleagues who share interests. Employees have created more than 9,500 of these online communities where they exchange ideas and collaborate.
3. Encourage adaptability and agility. In the future, when people regularly live to 100, retraining will become the norm as jobs and skills change. The traditional, just-in-case learning models companies use now will not be enough to keep up with rapid technological change. And the stages when training is needed will be different for a recent graduate, for example, than for a machine tool operator whose job is outsourced to a robot. Companies will need to plan for this type of up-skilling. In Singapore, the government is leading the way by giving grants to workers to help them retrain throughout their working lives, not simply to help them gain new skills but also to help them adjust their expectations of what a working life means.
Data analytics can help predict what skills companies will need, but getting employees to take up training will be a challenge. The Australian retail bank Westpac recently created a social learning platform called Learning Bank for its 40,000 employees that tags content to employees’ profiles; workers select what they want to learn. It’s an informal approach that empowers employees to learn what they choose, when and where they want to learn it. In 2017, Westpac added TechU to encourage people to acquire skills in future technology, according to Dave Curran, bank CIO at the time of the launch. “In my mind, nirvana is where people are self-educating to where their interest is, somewhat guided by the organization and people like me, towards where the demand will be,” he said.
Personalization of experiences helps improve adaptability. At Heineken, which employs more than 80,000 people worldwide, the company’s career track tool helps people move laterally within the organization by listing what kinds of opportunities are available that fit with their personal aspirations. Employees can choose to receive information about the experience and capabilities required for the job they want and how to prepare: In effect, it lets them tailor their development plan to the work they want to do. Fastweb, an Italian telecommunications company, recently launched a rotational development program to increase internal mobility as part of its talent attraction and retention strategy.
4. Support “intrapreneurship.” More young people today want to run their own company than ever before, and older people are also switching to entrepreneurialism. Organizations that fail to create opportunities for “intrapreneurship,” that is, encouraging employees to develop new enterprises and commercially viable ideas within the company, risk losing their own workers’ innovative ideas. The key is to create the kind of environment within a company where innovation is encouraged and people can take risks safely. These psychologically safe settings produce fewer errors in day-to-day work even as they create space for experimentation. For intrapreneurship to work in practice, people need time; creativity is often a function of the quantity of ideas produced. A 2015 study found that the first 20 ideas people generate are often significantly less original than their next 15.
There are different ways to build a supportive, intrapreneurial environment. Rite-Solutions, a software developer, created the Mutual Fun platform five years ago, which works as a virtual stock market for ideas by combining social networking and gamification strategies. An employee interacts with the market by first creating a personalized profile, which allows him or her to find others with similar interests or complementary strengths to work with on innovative projects. They can then invest their intellectual capital (in the form of virtual US$10,000) into the “idea stocks” of the colleagues they would support. A decision algorithm derives each idea’s stock values based on the activity and investments in it, while also calculating a leaderboard of players. Successful Mutual Fun initiatives lead to the formation of volunteer teams that could receive real investment.
Not all entrepreneurial ideas work out, so rewarding failures plays a role in encouraging risk taking. In 2006, Tata Group started its Innovista Awards to recognize innovation, even if the attempts failed, with the goal of fostering what it called “appropriate risk taking.” The uptake wasn’t great at first, but participation grew. In 2018, the company recognized 23 innovators. Normalizing, even celebrating failure can help individuals and organizations learn more about the products they are creating and the markets they serve.
Some organizations hold periodic hackathons in which employees present ideas and compete to tackle specific challenges aligned with the company’s broader strategy. Participants can earn prizes and recognition. Unilever has a startup hub to keep bright ideas generated by its employees in-house. It’s an insurance policy, aimed at validating intrapreneurship. Companies want to replicate the success of lightbulb moments such as 3M’s Post-it Note, but they should not forget that it took a decade for Post-its to become commercially successful. (The project failed three times before finally taking off.)
5. Provide autonomy. Faced with a transforming working environment, employees value choices. People regularly tell survey takers that they would give up income for greater control over how they work and for a more meaningful job. Research on powerlessness by neuroscientists shows how it can result in a lack of well-being, thwart motivation, and even damage cognition. A move toward a more autonomous and empowered work culture can help employees feel more satisfied and lead to stronger job performance and greater commitment to the organization. To paraphrase Dan Cable’s thesis in Alive at Work, employers have to proactively find ways to help people release their inner explorer.
Spotify, for example, groups its more than 2,000 employees into agile teams, called squads, that are self-organizing, cross-functional, and colocated. There is no single appointed leader of a squad. The mantra is that “alignment enables autonomy — the greater the alignment, the more autonomy you can grant.” A leader’s job is to figure out the right problem and communicate it, so squads can collaborate to find the best solution.
Gaming software company Valve, famous for its flat organizational structure in which no one has a boss, gives employees desks on wheels and encourages them to push the desks around the building to join projects that seem interesting. Valve holds them accountable for the results. Employees are given clear expectations when they join a new project team, and they must complete 360-degree evaluations when projects end to measure individual contributions. In an industry in which innovation is the lifeblood, Valve is thriving, with 360 employees and a 22-year record.
What Should Business Leaders Do?
Headlines that focus on the war for talent are elevating to the boardroom concerns that have traditionally been the domain of HR, such as skills and productivity. In PwC’s 21st CEO Survey, a 2018 look at chief executives around the world, the lack of availability of key skills was number five on the list of top threats to economic success. In 2019’s survey, it has risen to number three. HR professionals will be the guardians of good work experiences on a day-to-day basis, but it will be top leadership that must guide the overall strategy.
A high-quality workplace experience for employees is critical to developing a learning culture — and thus critical to the continuous improvement of the organization’s skills and capabilities. People don’t unleash their productivity if they’re having a bad time at work. Effective business leaders must demonstrate that they recognize the value of the people experience in their company and must work to improve it. They need to craft a narrative about what the future of work means for their organization and what actions they are taking now to deliver on that future. Leaders who understand this will have a competitive advantage. As the examples here show, some companies are already taking the initiative, rather than simply reacting.
Leaders can be the catalyst for change if they make it a priority. They can bring together communities of innovators within their enterprises; they can empower people to deliver in the ways that best suit them by making wellness and flexible working a differentiating source of energy, engagement, and loyalty. And they can find ways to help employees see into the future of their longer working lives. Data analytics are tools that can offer insight into what work will look like, not ends in themselves. They can help judge what skills people will need and determine how to develop the capabilities that sustain employability.
Good work should not be hard to find or hard to describe. To keep their workers’ attention and harness their potential, companies will have to encourage and develop the attributes and skills that make them innately human. If they fail to do that, their greatest resource, people, will simply walk away.