Tomorrow’s Knowledge Workers: The Evolving Workforce and the Challenge to US Businesses PARC Futures Workshop Ken Parekh and Mary Walker Management Consultants with the Deloitte Mass Career Customization TM Initiative April 30, 2008

Which workers are we talking about? “ A person who works primarily with information or who develops and uses knowledge in the workplace” (from Wikipedia) Related labels: professional-managerial mass upper middle class web workers skilled workers symbolic analysts creative class “ Related labels” from: Robert Reich; Richard Florida; and the Brookings Institute working paper The Decline of the White Working Class and the Rise of a Mass Upper Middle Class (April 2008).

“ A person who works primarily with information or who develops and uses knowledge in the workplace”

(from Wikipedia)

One Page Summary on the future of knowledge workers 1.There won’t be enough of them. 2.Their expectations will be different. 3.Technologies will transform when, where and how work is done.

Converging key trends are dramatically changing the US talent marketplace 1 Shrinking Pool of Skilled Labor 5 Evolving Expectations of Gen X and Gen Y 2 Changing Family Structures 3 Increasing Number of Women 6 Increasing Impact of Technology 4 Changing Expectations of Men By 2012, there will be a 6 million person gap between the supply and demand of knowledge workers in the U.S. Only 17% of households now have a husband in the workforce and a wife who is not, down from 63% in past generations. Nearly 60% of bachelor’s and master’s degrees in the U.S. are awarded to women. 84% of male executives agree they would like to realize professional aspirations while having more personal time. Baby boomers are almost twice as likely as Gen X/Y to be work-centric, with only 13% of Gen X/Y being work-centric. The remaining 87% of Gen X/Y are family-centric or dual-centric. 76% of households now have broadband connectivity while mobile phones, messaging and email has become pervasive . Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

And these trends are global, not just US 1 Shrinking Pool of Skilled Labor 5 Evolving Expectations of Gen X and Gen Y 2 Changing Family Structures 3 Increasing Number of Women 6 Increasing Impact of Technology 4 Changing Expectations of Men In 2006, 40% of companies worldwide reported difficulty filling jobs. 60% of households in Australia and Hong Kong have female heads of households. Since the 1980s, China and the UK have had double-digit increases in the percentage of women in the finance, legal, and medical professions. Men in Western Europe are more likely than women (20% vs.. 8%) to feel limited by the need to sacrifice everything for work. In Latin America and SE Asia, many employers have implemented programs to enhance work-life balance and encourage social responsibility. In the EU27, 54% of households had access to the internet during the first quarter of 2007 and 42% had a broadband connection. Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Shrinking pool of skilled labor By 2025, the working age population is expected to drop by 14 percent in Japan and by 7% in Germany 76 million Baby Boomers in the U.S. will begin to reach retirement age Domestic US labor force will only grow at rate of 1% Low birth rates in many countries Increased competition for skilled workers globally Stagnant college graduation rates in US Decline in competency in basic skills among US high school and even college graduates Source: Employment Policy Foundation Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 1

By 2025, the working age population is expected to drop by 14 percent in Japan and by 7% in Germany

76 million Baby Boomers in the U.S. will begin to reach retirement age

Domestic US labor force will only grow at rate of 1%

Low birth rates in many countries

Increased competition for skilled workers globally

Stagnant college graduation rates in US

Decline in competency in basic skills among US high school and even college graduates

Increasing gap between number of jobs and number of workers Numeric Change in Labor Force by Age, Projected 2004 - 2014 (in Thousands) Source: U.S. Bureau of Labor Statistics, Labor Force, Occupational Outlook Quarterly 49, no. 4 (Washington, DC: GPO, Winter 2005/2006). By 2012, there will be a 6 million person gap between the supply and demand of knowledge workers in the U.S. 65+ 55-64 45-54 35-44 25-34 15-24 Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 1

Changing family structures affecting roles Source: 1. Catalyst, Two Careers, One Marriage: Making it Work in the Workplace (New York: Catalyst, 1998) With updated data for 2005 from U.S. Bureau of Labor Statistics, Annual Social and Economic Supplement, Current Population Survey Washington, DC: GPO, 2005). Changing Family Structure 1950-2005 Only 17% of households now have a husband in the workforce and a wife who is not, down from 63% in 1950. Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 2 17.4% 63.4% 40.6% 20.4% 24.2% 10.8% 12.8% 3.5% 5.0% 1.8% 1950 2005 Male Single Parents Female Single Parents Other Families Dual-worker Families Traditional Families

Increasing number of women in paid work Source: W. Michael Cox & Richard Alms, “Scientists Are Made, Not Born” New York Times, 28 Feb, 2005; US Department of Education; US Department of Labor Law Medical MBA Dentistry Veterinary Pharmacy % Share of Professionals Degrees Awarded To Women In 2007, women comprise: 58% of college students 51% of new entrants to workforce 48% of workforce The proportion of degrees awarded to women vs.. men in the US has risen sharply since the 1970s. 50% Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 3

In 2007, women

comprise:

58% of college students

51% of new entrants to workforce

48% of workforce

Changing expectations of men towards work Male Executives Who Want to Realize Professional Aspirations While Having More Personal Time Men today are less likely to sacrifice family and personal time for work. Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 4 Source: Jody Miller, “Get a Life!” Fortune, 28 November, 2005; Catalyst, Women and Men in US Corporate Leadership: Same Workplace, Different Realities, (New York: Catalyst 2004) Strongly Agree Somewhat Agree Somewhat Disagree Strongly Disagree 36% 12% 48% 4%

Evolving expectations Generations X and Y around work / life Baby Boomers (38-57) 41% 22% 37% Members of Generation Y are more family-centric than Baby Boomers “ We recognize that changes in work structures come with an economic cost, and we are willing to be paid less in exchange for a better working life.” Stanford Law students Andrew Canter and Craig Segall 50% 13% 37% Generation Y (under 23) Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 5 Work-Centric Family-Centric Dual-Centric

Gen Y’s expectations of the workplace Want transferable skills that support job mobility Expect to have many jobs over their lifetimes High value placed on engagement and attention from companies, bosses, mentors Broad attention span and multitasking Communicate via multiple channels High use of computer games, have developed job-related skills via gaming Willing to trade off between income and job demands Less willing to unquestioningly adhere to “traditional” norms around the workplace 5 From various sources, including Carolyn Martin’s and Bruce Tulgan’s work on Generation Y in the workplace.

Want transferable skills that support job mobility

Expect to have many jobs over their lifetimes

High value placed on engagement and attention from companies, bosses, mentors

Broad attention span and multitasking

Communicate via multiple channels

High use of computer games, have developed job-related skills via gaming

Willing to trade off between income and job demands

Less willing to unquestioningly adhere to “traditional” norms around the workplace

93% of US teens use the internet 64% online US teens age 12-17 participate in content-creation activities Content creation: it’s not just about the created objects. Discussion and social interaction are key. Teens often work together to create content Some teens are multi-channel “super communicators,” using multiple communications tools on a daily basis Gen Y teens and technology: Creating, contributing, communicating 5 From the Pew Internet and American Life Project: report on Teens and Social Media (December 2007).

93% of US teens use the internet

64% online US teens age 12-17 participate in content-creation activities

Content creation: it’s not just about the created objects. Discussion and social interaction are key.

Teens often work together to create content

Some teens are multi-channel “super communicators,” using multiple communications tools on a daily basis

Gen Y consumers: Mary buys a prom dress Selected the dress Searched for and purchased dress online Used savings to purchase accessories Researched dresses online Visited store with friends and digital cameras, trying on dresses and taking photos Uploaded photos to Facebook and asked additional friends to comment 5 Example from the blog of the Digital Youth Research Project.

Selected the dress

Searched for and purchased dress online

Used savings to purchase accessories

Researched dresses online

Visited store with friends and digital cameras, trying on dresses and taking photos

Uploaded photos to Facebook and asked additional friends to comment

Gen Y “Gamer Generation” goes to work The stereotype 92% of kids age 2-17 have regular access to video/computer games. Gaming experience shapes their attitudes, expectations and beliefs about how the world and the workplace operate. Gaming is highly social for Gen Y and part of their collective experience. The reality Gaming develops skills that are highly applicable to knowledge work. 5 From The Kids Are Alright: How the Gamer Generation is Changing the Workplace by John Beck and Mitchell Wade.

92% of kids age 2-17 have regular access to video/computer games.

Gaming experience shapes their attitudes, expectations and beliefs about how the world and the workplace operate.

Gaming is highly social for Gen Y and part of their collective experience.

Gaming develops skills that are highly applicable to knowledge work.

Increasing impact of technologies Explosive growth in broadband Cellular phones are commonplace Virtual private networks (VPNs) enable secure access to corporate applications from outside the office Virtual workplaces are being designed and adopted As technology continues to advance, new models for how, where, and when work gets done open up new possibilities. Copyright © 2007 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. 6

Explosive growth in broadband

Cellular phones are commonplace

Virtual private networks (VPNs) enable secure access to corporate applications from outside the office

Virtual workplaces are being designed and adopted

Experts’ vision of the internet in 2020 Global, low-cost network available to (almost) everyone Free flow of information will blur national boundaries and other traditional groups Rise of region-states, “corporation-based cultural groupings” and “reconfigured human organizations tied together by global networks” Humans will remain in control of the technology No independent autonomous intelligent agents - yet Sophisticated, compelling virtual worlds Greater transparency and less privacy, with a mix of positive and negative consequences English will remain common online but Mandarin (and possibly other languages) will have significant presence Some people will choose to be technological refuseniks 6 From the Pew Internet and American Life Project – Future of the Internet II report (September 2006).

Global, low-cost network available to (almost) everyone

Free flow of information will blur national boundaries and other traditional groups

Rise of region-states, “corporation-based cultural groupings” and “reconfigured human organizations tied together by global networks”

Humans will remain in control of the technology

No independent autonomous intelligent agents - yet

Sophisticated, compelling virtual worlds

Greater transparency and less privacy, with a mix of positive and negative consequences

English will remain common online but Mandarin (and possibly other languages) will have significant presence

Some people will choose to be technological refuseniks

Laptops are increasingly the assumed standard for personal computers. Many companies say that out-of-office work is “nothing special – just part of how we do business now.” Urban nomads: People connected anywhere, anyplace Not just for business travelers, but for people going about their daily lives in their local environment A single smart device (cellphone+internet) taking the place of multiple pieces of equipment Assumption that you can access your personal files from any device Mobile technologies are transforming work and life 6 Quote from The Telework Coalition’s Teleworking Benchmarking Study Best Practices for Large-Scale Implementation in Private and Public Sector Organizations – Executive Summary (2006). “ Urban nomads” from The Economist - Mobile Edition (April 10, 2008).

Laptops are increasingly the assumed standard for personal computers.

Many companies say that out-of-office work is “nothing special – just part of how we do business now.”

Urban nomads:

People connected anywhere, anyplace

Not just for business travelers, but for people going about their daily lives in their local environment

A single smart device (cellphone+internet) taking the place of multiple pieces of equipment

Assumption that you can access your personal files from any device

These six trends are converging -- causing an increasing disconnect with traditional work patterns Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative. Changing family structures Changing expectations of men Shrinking pool of skilled labor Increasing number of women in paid work Evolving expectations of Gen X and Gen Y Increasing impact of technology

(Some) Business leaders are responding… Business challenges on the radar of future-focused C-level executives: Shifts in employee skills and expectations – attracting and retaining employees Shifts in customer skills and expectations -- attracting and retaining customers Shifts in skills and styles for leadership – developing leaders and managers for this new workforce Shifts in technologies -- impacting both the marketplace and the workplace

Business challenges on the radar of future-focused C-level executives:

Shifts in employee skills and expectations – attracting and retaining employees

Shifts in customer skills and expectations -- attracting and retaining customers

Shifts in skills and styles for leadership – developing leaders and managers for this new workforce

Shifts in technologies -- impacting both the marketplace and the workplace

… but it won’t happen overnight. “ Never mistake a clear view for a short distance.” Folk saying, in current times attributed to Paul Saffo

And key pieces of the solution still need to be developed….which is where you come in. Our Business PARC works closely with other organizations – from leading global corporations and government agencies to newly formed ventures – to discover breakthrough concepts that deliver value and solve real needs. By aligning our expertise with their strategic interests, our clients can: strengthen innovation effectiveness; extend scientific and technical capabilities; anticipate and respond more quickly to emerging industry trends; cultivate new market opportunities or business models; and acquire intellectual property while maximizing existing assets.

Our Business

PARC works closely with other organizations – from leading global corporations and government agencies to newly formed ventures – to discover breakthrough concepts that deliver value and solve real needs. By aligning our expertise with their strategic interests, our clients can:

strengthen innovation effectiveness;

extend scientific and technical capabilities;

anticipate and respond more quickly to emerging industry trends;

cultivate new market opportunities or business models; and

acquire intellectual property while maximizing existing assets.

Tomorrow’s Knowledge Workers: The Evolving Workforce and the Challenge to US Businesses PARC Futures Workshop Ken Parekh and Mary Walker, Consultants Currently with the Deloitte Mass Career Customization Initiative April 30, 2008