Ten years ago, Innecto made some predictions about what reward might look like in 2025. After a turbulent decade, what’s in store for pay and HR professionals in the next 10 years? Justine Woolf makes some predictions.
When Deborah Frost, then CEO of Innecto Reward Consulting, wrote about how reward might look in 2025 for Personnel Today, she explored potential trends towards matrix organisations and more social ways of working. She also asked how skillsets, base pay and working environments might evolve.
A decade on, the pandemic has created a seismic shift around flexibility and work-life balance, and data scientists are pondering the effects of aging populations. Business leaders are grappling with how new technologies like AI, robotics and HR tech might plug worker shortages and impact performance.
Demographic shifts
According to Our World in Data, in the 1950s the average woman had five children but today that number stands at 2.3, mainly fuelled by a drop in fertility in certain developed countries where the number has fallen below one.
This could eventually have a dramatic impact: if our workers drive our businesses and enable economic growth, how will we manage with fewer people in the working age category?
It is likely we will see further extensions to the working age. This might increase experience and mentoring capacity, but brings obvious challenges around health, vitality and tech skills.
This could mean the glass ceiling could take even longer to crack, meaning gender parity takes longer than the forecasted 100 years. One solution might be to embrace big tech to enable a “business revolution”.
AI and Big Tech
By 2035, remote working as we know it could evolve into our ‘avatars’ (virtual selves) attending virtual offices.
Imagining a mass uptake of AI, many skillsets important today would become outdated, putting a new emphasis on reskilling and a different inflexion on recruitment.
While manual and practical dexterity might be devalued, analytical thinking, technological literacy, programme management, project management and flexibility will gain importance.
Recruitment and onboarding are already happening virtually, and could become even more immersive with new starters training, meeting colleagues and getting to know workspaces before they step foot in an actual building.
Greater automation
From a reward perspective, we expect that much of the ‘business as usual’ – like matching roles, doing job evaluation or managing pay review – will be automated.
Some of the more mundane HR tasks like report-writing and data collation will also be replaced by AI-powered automation, freeing up time to focus on the softer side of the role – the individual and their needs – and think more strategically, aligned with business leaders.
Advances in tech are also likely to mean more in the way of unified platforms (a one-stop shop for all your people’s needs) and more data being crunched, which could also increase transparency and fuel workers either moving around or negotiating higher salaries.
In general, businesses could face a tricky paradox: they’ll need to work harder at making employees feel valued in workplaces that are likely to be more digitised and therefore involve less natural human interaction.
New era of job design
A word to the wise, however. As organisations reinvent operating models to leverage AI and other new tech, changes to internal workflows and supply chain processes will almost certainly impact jobs and challenge organisational design.
How many roles are made redundant? How will new roles be conceived? Where will their value lie alongside the technology? Who will manage the systems, either company-wide or within functional areas? We’ve already seen some businesses row back from replacing customer-facing roles with AI. All these questions require careful consideration.
It will also be important to pre-empt issues around behaviour and personal data. In our physical business settings, we have written and unwritten rules of engagement.
Operating in a virtual world will bring undesired behaviours to record, collect, assess and act upon – all additional work for HR.
Work-life balance and flexibility
With the pandemic having already opened Pandora’s box on hybrid working, employee expectations will continue to challenge HR to provide authentic, tailored work experiences that empower people to do their best work.
The four-day week and other compressed hour models will certainly gain in traction, but HR will need to stay agile. Already, we are seeing ‘four-day-weekers’ taking on second jobs on the fifth day, undoing the whole premise of improved work-life balance.
Employer-funded provisions might become more commonplace to avoid women leaving the workplace.”
Childcare provision will also be increasingly important because the UK’s existing options are diminishing and too expensive.
It will be interesting to see how much closer we move towards Scandinavia’s gender parity accelerator policy models, which have had such a strong impact on parental leave and gender parity.
Employer-funded provisions might become more commonplace to avoid women leaving the workplace and the gender pay gap widening again.
Struggling to stand out
If HR decisions are being dictated by data and AI, there is a danger that the entire employer value proposition becomes very vanilla.
The benefits of increased transparency might make businesses more homogenous – particularly if increased transparency legislation makes the marketplace on pay more open.
This will place greater importance on differentiation: understanding each age demographic and life stage will become more important.
We can expect more personalisation around the total package, enabling increased focus on what individuals need and value.
Employee experience will become more entwined with customer experience, with increased focus on determining an interconnected service profit chain.
Meanwhile, pension ages will need to be reconsidered and, with that, a greater onus on HR to devise sustainable ways for the increasingly powerful older generation to be rewarded for their knowledge and experience – and perhaps even incentivised to pass it on to the younger generation.
How businesses engage with the metaverse could also dictate the way employees experience reward and recognition.
If avatars do become commonplace, they open the door to virtual reward through unique NFTs and collectibles or tickets to virtual experiences. Virtual attendance might also be tied into green benefits and incentives as environmental issues bite harder.
If the pandemic has taught us anything, it’s that we live in a VUCA – volatile, uncertain, complex and ambiguous – world. The next 10 years will certainly be interesting and keep us all (and our avatars) on our toes.
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