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The Workforce
     May 2010
Contents

1. A view from Friends Provident ......................................... 4

2. Foreword from Future Foundation...
6. Rewarding Work .............................................................. 19
6.1. Key Finding ........................
1. A view from Friends Provident
   Friends Provident is delighted to present the second of our ‘Visions of Britain
   202...
2. Foreword from Future Foundation
   In the second chapter of Visions of Britain 2020, our focus shifts to the workforce
...
3. Executive Summary
  We have found a number of stark changes between the workforce of today and
  the workforce of 2020....
4. The Changing Face of the
   Workforce
4.1.   Key Finding
       As P.J. O’Rourke once observed, age and guile beat yout...
74% of Britain’s teenagers want to go to university or college. In the immediate
       future traditional graduate destin...
they’ll be offered a three year or five year contract which they might have to
       renew or apply for their jobs again....
4.5.   The greying workforce
       Older workers today: 5.14 million
       Older workers in 2020: 7.16 million

        ...
This year the average worker in the UK is 42 years old. In the last recession of
       1990 / 91, these workers were 22. ...
receptive audience for flexible, part-time and home based working. In the
       research conducted for this project, we f...
5. Flexible working is not the holy
   grail
5.1.   Key Finding
       Our report findings show that it is wrong to percei...
5.2.   Age brings increasing flexibility

           Attitudes towards work flexibility
           % agree or strongly agr...
In 2009 84% of the UK population wanted a society in which they would be able
to devote more time to family life (Eurobaro...
5.5.   Older people and flexible working

           “Do you ever work from home?”
           % yes, by gender, age and so...
“Which, if any, of the following do you expect from your career in
           the future?”
           By age


           ...
5.7.   Conclusions
       The desire for flexibility is forced upon some but for many flexible working
       creates more...
6. Rewarding Work
6.1.   Key Finding
       The most important rewards are not financial. To retain workers companies must...
6.2.   Salary versus age – older and graduate workers

           “What are the three most important things to you about y...
In the tight employment market of 2020, the requirement to be flexible will be
       pushed on employers. They will have ...
Ian Brinkley agrees that by 2020, workers will be looking for a higher level of
       stimulation at work and that job de...
“I believe that staff should have the flexibility to choose their
           own benefits”
           % agree or strongly ...
7. Productivity
7.1.   Key finding
       The corporate desire to measure everything will not help in the development of
 ...
spending more time, energy and resources on their line managers to ensure that
       they are able to have those difficul...
8. Conclusions
  The workforce of 2020 will look starkly different to that of today - with changing
  demographics meaning...
While flexible hours offer some relief to parents and carers, flexible working is
not a solution for all – many of us woul...
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Visions of britain the workforce 2020

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In the second of our Visions of Britain 2020 reports we look at what the worker of 2020 could look like and how the working environment will need to adapt to meet the needs of these new emerging workers.
Our findings identified a number of stark changes between the workforce of today and that of 2020. We looked at the workplace of the future through the eyes of three groups: those over 55, new graduates and the ‘sandwich generation’ who are struggling to balance the dual demands of young children and ageing parents.
We believe these three groups will face some of the biggest challenges in the workplace of the future. But in this new decade, we believe we will have more freedom than ever before to shape our own destinies for the better.
We hope the fascinating insights within ‘Visions of Britain 2020’ will help guide you in these choices.

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Transcript of "Visions of britain the workforce 2020"

  1. 1. The Workforce May 2010
  2. 2. Contents 1. A view from Friends Provident ......................................... 4 2. Foreword from Future Foundation .................................. 5 3. Executive Summary ........................................................... 6 4. The Changing Face of the Workforce .............................. 7 4.1. Key Finding .................................................................................................. 7 4.2. The changing graduate landscape .............................................................. 7 4.3. A degree of change ....................................................................................... 8 4.4. The sandwich generation ............................................................................. 9 4.5. The greying workforce ............................................................................... 10 4.6. The failure of corporate memory.............................................................. 10 4.7. Over 50 but not over the hill ..................................................................... 11 4.8. Conclusions ................................................................................................. 12 5. Flexible working is not the holy grail ............................. 13 5.1. Key Finding ................................................................................................ 13 5.2. Age brings increasing flexibility ............................................................... 14 5.3. Graduates, young people and flexible working ....................................... 14 5.4. The sandwich generation and flexibility .................................................. 14 5.5. Older people and flexible working............................................................ 16 5.6. The importance of real-life social networks............................................. 17 5.7. Conclusions ................................................................................................. 18
  3. 3. 6. Rewarding Work .............................................................. 19 6.1. Key Finding ................................................................................................ 19 6.2. Salary versus age – older and graduate workers .................................... 20 6.3. Rewarding the sandwich generation ........................................................ 20 6.4. How money fails to motivate ..................................................................... 21 6.5. The challenge for management ................................................................. 21 6.6. Reward packages........................................................................................ 22 6.7. Conclusions ................................................................................................. 23 7. Productivity ....................................................................... 24 7.1. Key finding.................................................................................................. 24 7.2. Measuring the wrong values ..................................................................... 24 7.3. Measure for measure ................................................................................. 25 7.4. Conclusions ................................................................................................. 25 8. Conclusions ....................................................................... 26
  4. 4. 1. A view from Friends Provident Friends Provident is delighted to present the second of our ‘Visions of Britain 2020’ reports. Produced with the Future Foundation, we aim to paint an insightful and realistic picture of British society ten years from now. In the second chapter of this, our first theme, we focus on the perspective of the worker in 2020 through the eyes of three groups: those over 55, new graduates and the ‘sandwich generation’ who are struggling to balance the twin demands of young children and ageing parents. We ask how the workplace will need to adapt to meet the needs of these workers and their very different circumstances. We believe that these groups will face some of the biggest challenges in the workplace of the future. However, at Friends Provident, we also believe that with careful planning and consideration of the choices available to us, challenges can be made into opportunities. In this new decade, we have more freedom than ever before to shape our own destinies for the better. We hope the fascinating insights within ‘Visions of Britain 2020’ will help guide you in these choices. Trevor Matthews, CEO, Friends Provident
  5. 5. 2. Foreword from Future Foundation In the second chapter of Visions of Britain 2020, our focus shifts to the workforce of 2020 - in particular what types of worker will make up the working population and what the pressures on each of these groups will be in 2020. To create this report we’ve combined a number of different methodologies with the aim of building the most accurate view of the future. We’ve surveyed 1,000 representative Britons and have examined their opinions in greater detail by using focus groups. We’ve interviewed several employment experts to gain their insight into the workforce of 2020, they are:  Ian Brinkley, The Work Foundation  Adrian Furnham, Professor of Psychology, University College London  Mike Emmott, Chartered Institute of Personnel and Development  Charles Cotton, Chartered Institute of Personnel and Development We have combined these with expert opinions from our ‘Delphi Paneli’ - a way of aggregating expert opinion to create a consensus on what the future will look like. Barry Clark, Future Foundation i Bernard Brown, Partner, Head of Business, KPMG Guy Bailey, Senior Policy Advisor at the CBI David Amos, Senior Policy Advisor at the Cabinet Office Graham White, Director of Human Resources at Westminster City Council)
  6. 6. 3. Executive Summary We have found a number of stark changes between the workforce of today and the workforce of 2020. By 2020 people management will be a much more demanding task – in measurement, in motivation and in maintaining a sense of what the organisation is. Our research into the workforce of 2020 shows that three types of worker will make up the majority of the working population by 2020: graduate workers, sandwich-generation workers and elderly workers. As well as discussing the pressures on each of these audiences, our report shows that the leaders of companies will face new and very demanding challenges by 2020. Challenges that require completely new skills. This report illuminates disruptive change in four areas: Greying of the workforce. Older workers will hold all the aces (and most of the knowledge) while inexperienced graduates will need to become more enterprising to find work. More money, more problems. For our worker of 2020, money has become less important. In the backlash of the banking crisis bonuses have become less popular and packages are simpler. (In)flexible working. Flexible working doesn’t solve all our problems – indeed we imagine it will mean longer hours. For many of us, financial pressures mean that we’d rather work longer hours and earn more. Unproductive metrics. Business feels compelled to create metrics to measure the value of what it does, and what its people do. By 2020 more enlightened companies will recognise that measuring the knowledge economy may actually limit it, at the cost of creativity.
  7. 7. 4. The Changing Face of the Workforce 4.1. Key Finding As P.J. O’Rourke once observed, age and guile beat youth, innocence and a bad haircut. Older workers, who have so often felt marginalised in the employment market, will be in a much stronger position in 2020. The recession has vividly illustrated the value of experience while older workers have a more philosophical outlook on work which better equips them for a more flexible future. There will be a huge increase in the number of these workers – as well as graduate workers – who will have to become more enterprising to get into the increasingly competitive working environment. In between these growing bands of old and young workers, a band of ‘sandwich-generation’ workers will face their own unique pressures, forcing employers to rethink their approach. 4.2. The changing graduate landscape Graduate workers today: 6.62 million Graduate workers in 2020: 9.06 million Proportion of workers with a degree 30% 25% 20% 15% 10% 5% 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: British Household Panel Survey/ nVision Base: 7,600-9,900 aged 16+, GB
  8. 8. 74% of Britain’s teenagers want to go to university or college. In the immediate future traditional graduate destinations – finance and the public sector in particular – will recruit smaller numbers. This raises the prospect of graduates being displaced into other industries or struggling to realise the investment they’ve made in their own education. Our forecast shows that, by 2020, the number of graduate workers will have increased by nearly 50% - a reflection of the demands of the knowledge economy. What this means is that a basic degree will be an entry-point into elite jobs in the knowledge economy rather than a mark of distinction. To realise a premium a degree from a top university or an MBA will be required. 4.3. A degree of change Our forecast shows a steadily more qualified workforce - driven by the needs of a knowledge economy. Currently 70% of boys and 78% of girls aged between 11 and 16 would like to go to university or college. It makes absolute sense for them to do so; the graduate wage premium - across the OECD - has remained very stable. Looking at current trends, there is no indication that the situation will change. Indeed Professor Adrian Furnham believes that the wage premium around the ‘golden triangle’ of London, Oxford and Cambridge will increase over the next ten years as companies compete to attract the very best talent. The current recession has had the effect of encouraging rather more school leavers into tertiary education as a means of deferring entry into a tight job market. The recession will have an impact on graduate careers and recruitment. Finance and the public sector – both traditionally big recruiters - are likely to be employing fewer graduates in the next few years. This will have the effect of shifting people into other sectors such as the creative industries. Britain is a world leader in creative industries and the sector is an exemplar of the knowledge economy. The attractiveness of working in this area is such that graduates will have to be more enterprising to gain entry. “Graduates going into that sector [creative and cultural] now are much more likely to be self-employed, more likely to be in temporary jobs, more likely to work part-time... ...the routes into that sector have become more diverse and there are some hints that there is a greater degree of entrepreneurialism going on.” Ian Brinkley, The Work Foundation Professor Adrian Furnham also foresees that change will be forced upon graduates. “[Graduates] who have jobs will think of themselves as more fortunate... I think they’ll be forced to [accept being more flexible], I don’t think they’ll choose to. I think everybody wants security but I think security of every form will go down, so
  9. 9. they’ll be offered a three year or five year contract which they might have to renew or apply for their jobs again.” 4.4. The sandwich generation Sandwich generation* 16% 14% 12% 10% 8% 2002 2007 6% 4% 2% 0% Total MenWomen 16-24 25-34 35-44 45-54 55-64 65+ AB C1 C2 D E Source: British Household Panel Survey/ nVision Base: 8,500 aged 16+, GB The so-called ‘sandwich generation’ are defined as people who have both dependent children and parents who require care. Among people in the prime of their working lives – those aged 35 to 44 – one in seven is a member of the sandwich generation. This hard-pressed group have to deal with enormous time and cost pressures. With current policy aimed at keeping the elderly in their homes, and with a fast ageing society, the sandwich generation will inevitably grow. Already 28% of UK workers find it difficult to fulfil family responsibilities because of the amount of time they spend at work. Sandwich generation workers will therefore force employers to increase the provision for flexible working simply because they are too valuable to lose, but increased flexibility may not be enough.
  10. 10. 4.5. The greying workforce Older workers today: 5.14 million Older workers in 2020: 7.16 million Proportion of workers* aged between 55 & 70 25% 20% 15% 10% 5% 0% 2011 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: British Household Panel Survey/ nVision Base: 7,600-9,900 aged 16+, GB In 2020 there will be more older workers in the workforce. In 2000 the average age of a UK worker was 40. In 2020 it will be 44. One in five workers in 2020 will be 55 or older, according to the British Household Panel Survey. The demographics are well known but the events of the recession have served to highlight the value of experience very powerfully through the failure of corporate memory. “One of the great shocks of this downturn was the realisation that hardly anyone, particularly in the senior reaches of companies, actually remembered what the last recession was like. This was particularly acute in government and the corporate sector... You’ve got no collective memory left in the organisation. I think a lot of firms have found that the loss of corporate memory from their older and more senior workers is quite a difficult problem” Ian Brinkley, The Work Foundation 4.6. The failure of corporate memory Alistair Darling commented recently on a cultural change within the Treasury, which saw fewer people around who had dealt with a recession before. The knowledge of how to cope with such a situation had retired from the organisation, leaving many staff unable to rely on past experience.
  11. 11. This year the average worker in the UK is 42 years old. In the last recession of 1990 / 91, these workers were 22. Many would have been on a gap year or still studying, and would have no experience of managing a company in a downturn. This could mean many companies were in the hands of ‘recession-novices’. We’d argue that the recent recession has made business leaders appreciate the merits of retaining experience, placing older workers in a more powerful position than ever before. At the height of the credit crisis, much was made of learnings from previous recessions, with companies extolling a range of buzzwords from innovation to R&D. Retaining staff who have experienced a recession first-hand will be amongst the key learnings from this one. 4.7. Over 50 but not over the hill Attitudes of those aged 50+ to working longer “Taking into account the current economic climate, what are your thoughts about the future?” 1% I will have to work beyond my 13% planned retirement to supplement my pension 26% I need to work longer, as I am giving financial help to a family member The current state of the economy has made no 15% difference to me I would like to continue working, but jobs are scarce for the over 50s I will have to live off my savings 7% until I get a job 3% If I cannot get a job, I will have to apply for financial help Refused 35% Source: skilledpeople.com/nVision Base: 766 respondents aged 50+, UK, 2009 Graphics from nVision for Barry Clark A recent Consumer Attitudes to Saving survey shows among pre-retirees, 48% of workers said they would like to work either full or part-time after the usual retirement age. In the data above, a third of retirees say they would like to continue working but feel frustrated at the lack of opportunities. We also see how many older workers feel that working on is a necessity. Two thirds of our Delphi Panel agree that by 2020 we will have a problem with skills shortages. A lack of talent, in addition to a new found respect for experience, will likely create many more opportunities for older workers – a
  12. 12. receptive audience for flexible, part-time and home based working. In the research conducted for this project, we found that older workers are much more willing to take a pay cut to receive the option of flexible working than younger workers. Only 8% of 16-24 year olds would be willing to earn less money in return for flexible hours. Among those aged 55 to 64 the figure rises to 19%. 4.8. Conclusions The workforce of 2020 will be greyer than it currently is. An unintended consequence of the recession of 2008/2009 is an appreciation of the value of experience. This creates a scenario in which older workers will be able to stay active and supplement pensions while contributing in a powerful way. Graduates may have to become more entrepreneurial in their approach to job seeking and will get into employment in more diverse ways than has previously been the case. Finally the needs of the sandwich generation will force the hand of employers on offering greater flexibility.
  13. 13. 5. Flexible working is not the holy grail 5.1. Key Finding Our report findings show that it is wrong to perceive flexible working as a complete solution to the delicate act of balancing work and life. Flexible working can and does create anxiety. As social animals we struggle with being cut off from others and we fear that we become invisible to those with the power to promote and reward. Professor Adrian Furnham believes that flexible working – in the sense of working from home – can create anxiety: “People at home feel cut off from what’s going on... If I am trying to manage you from a long way away, although you might deliver your stuff on time, I’ve really got very little sense of you as an individual and whether you are capable of working at a new level... ...promotability requires interaction. We are social animals and working from home can be very lonely.” Also, a corporate culture can’t be expressed without community. Without a community, knowledge – our most precious resource – can’t be transferred naturally. Our data shows a real paradox in attitudes to flexible working. Graduates, who have just spent three or four years studying independently seem less enthusiastic about home working while older people (for whom relationships at work are so important) are the most likely to work at home. This seems counter-intuitive at first but there is a logical explanation.
  14. 14. 5.2. Age brings increasing flexibility Attitudes towards work flexibility % agree or strongly agree, by age 0% 10% 20% 30% 40% 50% 60% 70% 80% In the future I think that flexible working will mean that in general people will work more hours overall I think the Government should consider introducing a 'parent' leave which can be split between the father … I think most people still work from 9am to 5pm, five days a week In principal, I think that paternity leave for fathers should be increased My employer offers about the right level of flexibility for those who have to care for children and other … My employer is more flexible in terms of work hours than they were 5 years ago I feel that it is increasingly difficult to balance work and home life In principal, I think that maternity leave for mothers should be increased I think I am more productive when I work from home than 16-24 in the office 25-34 I prefer to work in an office rather than working at home 35-44 I don't have the right facilities to do my job at home (e.g. 45-54 broadband/IT set-up) 55-64 In the future I expect the number of people working from 9am to 5pm to increase 65+ Source: Friends Provident/The Future Foundation/nVision Base: 1,000 respondents aged 16+, GB, 2009 : 5.3. Graduates, young people and flexible working The data we’ve collected shows a naivety among young (16 – 24 year old) workers. More than any other, this group believes that it is difficult to balance work and home life, so they are the most likely to believe that traditional working patterns will continue. They want this to happen too, so that they can be visible within the organisation, and so improve their chances of progress. It’s not surprising that young people, new to work, have some skewed expectations of working life. What is concerning is the fairly gloomy outlook they have (a majority of them anticipate that flexible working will mean longer hours). 5.4. The sandwich generation and flexibility “Everybody works better if they have the opportunity to have more influence over when they work. It’s an obvious one for the sandwich generation – the problem for them is that there is too much domestic and family related work to deal with. Flexibility doesn’t fully answer their problem. Indeed it’s fair to say that flexibility doesn’t answer anyone’s problems altogether.” Mike Emmott, The Chartered Institute of Personnel and Development.
  15. 15. In 2009 84% of the UK population wanted a society in which they would be able to devote more time to family life (Eurobarometer). Looking ahead and anticipating life in 2020 and beyond, only 38% of the population imagine they will have more time to spend with family. Another 43% think they will have less time with their family. We anticipate that family life will become squeezed. Flexible working may help in some ways but the majority of us still anticipate that flexible working means working more hours overall. Importance of flexible working in job-making decisions for parents By gender “If you were applying for a new job, how important a factor would the availability of flexible working in deciding to apply?” Men Very important Important Not very important Not at all important Women 0% 20% 40% 60% 80% 100% Source: Equality & Human Rights Commission/nVision Base: 3,138 working parents aged 18+, UK, 2009 22865: The Singleton Society The consequence of this is that flexible working becomes more important in choosing jobs. Some people may not be able to take up jobs that they are qualified for because other commitments preclude a regime with rigid hours.
  16. 16. 5.5. Older people and flexible working “Do you ever work from home?” % yes, by gender, age and social grade Source: Friends Provident/The Future Foundation/nVision Base: 1,000 respondents aged 16+, GB, 2009 : Professor Adrian Furnham believes flexible working will be increasingly valued by older people and that they’ll see it as a key benefit. He believes that the ability to work less hours will suit their lifestyle. As a consequence of this, many older workers will be able to look after grandchildren. Certainly grandparents are more often involved in childcare and so flexibility will be desirable. This is also the generation who approach retirement only to see their financial position being less robust than they hoped. For them staying on in the current job but on a part-time and more flexible basis may seem not just desirable, but essential.
  17. 17. “Which, if any, of the following do you expect from your career in the future?” By age 0% 10% 20% 30% 40% 50% 60% 70% To continue working after my official retirement age 16-24 25-34 35-44 45-54 55-64 65+ Source: Friends Provident/The Future Foundation/nVision Base: 1,000 respondents aged 16+, GB, 2009 : 5.6. The importance of real-life social networks While a more flexible work style helps parents and carers, it simultaneously introduces new fears and anxieties. For many work flexibility is a problem and not a solution. The debt burden that graduates will have in 2020 will be great and they will understandably be keen to progress within the organisation and maximise the return on their education. They will likely feel that working at home will hinder their progress as they will have a limited profile within the company. Employers have their own concerns. Information is easily conveyed to employees whether they are in the office, at home or in the pub. The transfer of knowledge – the key commercial asset of the future - is more peculiar. Knowledge is transferred through face to face contact. Having a dispersed workforce is therefore counter-productive. Providing space (both in terms of place and time) for people to interact is critical in the development of knowledge- based businesses. How aware are business leaders of the way knowledge is transferred and in how to facilitate it? “A lot aren’t. It’s essentially the difference between world leaders and the mediocre. It’s very hard to think of a world leading company that doesn’t at least aspire to create those working relationships within their offices.” Ian Brinkley, The Work Foundation
  18. 18. 5.7. Conclusions The desire for flexibility is forced upon some but for many flexible working creates more problems than it solves. Flexible working, and especially working from home, can hamper team working (a guiding principle of work organisation), the transfer of knowledge, communication, the development of a work culture and can deny the satisfaction that comes from working with others (especially for older workers). The key in managing flexible working will be in applying it sensitively, to balance individual needs with those of the organisation.
  19. 19. 6. Rewarding Work 6.1. Key Finding The most important rewards are not financial. To retain workers companies must offer a job which is richer rather than just making employees richer. By 2020, designing interesting jobs won’t be enough; jobs will have to become more interesting and stretching over time. Career development must be built into evolving job descriptions. The importance of salary declines steeply with age – 36% of 16 to 24 year olds name money as one of the three most important factors about their job. That figures slides to 28% of the 55 to 64 year olds. One of the factors driving this is graduate debt. University fees will grow exponentially over the next ten years. The Russell Group of leading universities has been campaigning for a rise in student fees for some time. “I imagine that many of them are going to be coming out with significant debts and they will be looking to pay those off as quickly as they can. I think they are going to be focused on (in the early stages of their career) salary and bonuses.” Charles Cotton, Chartered Institute of Personnel and Development.
  20. 20. 6.2. Salary versus age – older and graduate workers “What are the three most important things to you about your current job?” By age 0% 10% 20% 30% 40% 50% 60% That my job is satisfying 16-24 25-34 Salary level 35-44 45-54 55-64 65+ Source: Friends Provident/The Future Foundation/nVision Base: 1,000 respondents aged 16+, GB, 2009 : At the same time the importance of job satisfaction rises with age. For older workers a satisfying and enjoyable job is paramount. Those aged over 65 are the most extreme. For them, workplace friendships and a sense of reward are vastly more important than money. This creates an interesting dynamic around employment opportunities for those beyond the current retirement age. 6.3. Rewarding the sandwich generation The sandwich generation face some very difficult choices between a need to maintain income to support two generations and at the same time having to meet onerous care obligations. Charles Cotton of the CIPD believes that some companies may come to recognise this as an opportunity to gain or retain good people: “... organisations that are able to be flexible and then build their work patterns around those individuals [i.e. the sandwich generation] may find it easier to attract them and have a competitive advantage over those organisations that can’t.”
  21. 21. In the tight employment market of 2020, the requirement to be flexible will be pushed on employers. They will have the additional pressure of paying enough to retain experienced workers. 6.4. How money fails to motivate Currently only one in four workers are willing to work at a boring job in return for good pay (see chart below). This reflects a long-term steep decline in our willingness to tolerate boredom. We expect this trend to continue in the long term (although the recession of 2008/2009 may cause a small blip). As a society of workers we will continue to expect more stimulation in the workplace. Asked to rank their priorities in seeking a new job, 36% of British people chose ‘an interesting job’ while 20% chose a ‘good salary’ according to a 2009 survey for Eurobarometer. “I’d be willing to work at a boring job as long as the pay was good” % who agree or agree strongly, by gender, age and social grade 70% 1999 2002 2007 60% 50% 40% 30% 20% 10% 0% 55+ AB C1 C2 Total Male DE 16-34 35-54 Female Source: nVision Research Base: 1,200 respondents aged 15+, GB Graphics from nVision for Barry Clark 6.5. The challenge for management We make the case that people find greatest reward in the job itself. Therefore job roles need to be finely engineered to be appealing to elite workers. The real challenge for managers of people is not in designing the job role but in ensuring that it offers development and that it continues to stretch people years after they have taken up the role.
  22. 22. Ian Brinkley agrees that by 2020, workers will be looking for a higher level of stimulation at work and that job development will be critical: “...you can interpret a lot of the data to suggest that employers get the initial job right. They attract people into it and then don’t develop the job. As people gain experience the initial novelty wears off... I’m pretty certain that’s why you’ve still got these very high reported levels of people saying that the job doesn’t make the full use of the skills they’ve got.” For graduates – many of whom enter the job market with high expectations of working life, job development is central to how rewarding their work life is. To retain these workers, companies will have to work harder on developing people. 6.6. Reward packages By 2020 it is likely that remuneration packages will be simpler without many of the benefits we see today. To an extent this will be due to wary employers taking less of a role in pension provision. Among the experts on our Delphi Panel only half agreed that companies will compete for the best people through high quality pensions – 33% of the experts thought this 2020 scenario extremely unlikely. It is our view that, by 2020, bonuses will be less common as part of packages. Public opinion has been influenced by bonuses awarded to bankers. Nervous companies, aware of public hostility towards bonus payments, may scale them back in favour of increasing salaries. Companies may feel that bonuses are counter-productive, leading to actions which can be selfish or even anti-social. Public sentiment has turned – for example many feel that it’s inappropriate to award bonuses to NHS managers as it rewards actions which may not be in the best interests of patients. A clear majority of workers would prefer to have the ability to choose their own benefits (see chart overleaf). Older workers are the least likely to agree to this perhaps because their own financial situations are more assured compared to youngsters. Charles Cotton of the Chartered Institute of Personnel and Development believes that pay will be tied ever more tightly to performance and to the desire to retain talent. “I think at the top end there are a lot of governance issues so I think organisations may be a bit reticent in giving out rather large bonuses to the top executives unless it’s deferred over a number of years or they can really justify it or have a good story to tell to shareholders and to the media. Our reward management survey shows that one of the key changes planned for 2010 by our sample was that they were going to differentiate the pay award and the bonus award between high performers and normal performers. Rather than smearing the pay award around, it’s going to be more targeted towards those people who either add most value to the organisation or who the organisation really needs.”
  23. 23. “I believe that staff should have the flexibility to choose their own benefits” % agree or strongly agree, by gender, age and social grade Agree strongly Agree 80% 70% 60% 50% 40% 30% 20% 10% 0% Total Male Female 65+ ABC1 16-24 25-34 35-44 45-54 55-64 C2DE Source: Friends Provident/The Future Foundation/nVision Base: 1,000 respondents aged 16+, GB, 2009 : Lynda Gratton, Professor of Management Practice at London Business School, believes that current reward systems often stifle creativity and innovation. “Now, many of our companies have become very competitive. Reward systems pit people against each other and it gets difficult, therefore, really to be cooperative. These companies that are competitive, tournament-based, create the big freeze [i.e. a working environment characterised by low morale and interaction which is poor in creating new ideas].” Gratton argues that cooperation is vital in creating dynamic and successful teams who are capable of delivering innovation. To foster this sort of cooperative environment, managers must coach and mentor effectively. Hence many organisations will need to improve people management skills. 6.7. Conclusions It’s a mark of the rising affluence in this country since the war that we’ve come to define rewards in non-monetary terms. We believe that by 2020 UK GDP will have continued its resolute upward growth bringing greater prosperity for most. The consequence of this is an insistent desire for stimulation and growth at work, a desire that will create new demands of people managers.
  24. 24. 7. Productivity 7.1. Key finding The corporate desire to measure everything will not help in the development of knowledge and ideas. Few truly comprehend where ideas and innovation come from – only companies that understand that some things cannot be measured will succeed. 7.2. Measuring the wrong values In 2020 staff – particularly knowledge workers – will be a bigger cost in relative terms than they are now. Employers, aware of the rising cost of employing and training workers will seek to monitor their effectiveness. Among our Delphi Panel of experts, 67% agree that employers will have metrics in place to measure productivity. The first problem is that any productivity measure must be multi-dimensional. A single measure invites staff to focus their energies on achieving that goal – probably to the detriment of other useful activities. Secondly companies are likely to focus on measuring inputs rather than outputs. There will be a tension between measuring productivity and giving people the space they need to be creative. Only the most imaginative and philosophical companies will recognise that creating metrics does not facilitate creativity. People need to be given the right space and environment to generate ideas. Ian Brinkley agrees, saying: “[Productivity] will be measured badly. There is an obsession with trying to measure everything. What you should be concerned with is: what is the actual outcome, the outputs? People are obsessed with trying to measure the inputs which is pointless.” The third problem is a lack of standardisation. As yet there is no commonly used method of calibrating the generation of ideas and knowledge. However, economists are close to creating a measure of how the creative element of industry contributes to GDP. While a useful contribution, it is likely that the measures employed by economists will be too theory-based for practical application. Charles Cotton of the Chartered Institute of Personnel and Development is sceptical about the current ability of British managers to performance manage their teams. However he sees some signs that businesses are responding to the challenge. “I think, to be fair, organisations themselves recognise that [managers often don’t have the right skills to reward productivity]. They are, increasingly,
  25. 25. spending more time, energy and resources on their line managers to ensure that they are able to have those difficult conversations... ...organisations are now ensuring when they do promote people to people management responsibility that they have those skills beforehand.” 7.3. Measure for measure The measurement of productivity means radically different things for different groups. Graduate workers: Productivity measures place a degree of pressure on graduates – they will be eager to play to the scoring system in order to progress and deal with the debt created by their education. For this reason the evaluation of performance must be multi-faceted – the existence of only one or two measures will encourage staff to strive to achieve only those goals, to the detriment of the company’s broader ambitions. Sandwich-generation: For this group these measures can be a source of great anxiety. As they attempt to balance jobs and family, they will fear that others, free of the commitments, will be able to produce more, be more flexible and appear to produce more. This is a test of the natural inclination of employers to measure on numbers alone. The value of contributions needs to be measured as outputs and needs to be measured sympathetically. Older workers: These workers are in a different position. Their contribution will often be their experience; productivity per se may not be so important for this group. A different evaluation method will be required; the value of experience needs to be calibrated on a separate scale. 7.4. Conclusions In 2020 productivity will be measured and the best companies will show a sensitivity in calibrating performance. The elite companies will accept that some things really cannot be measured.
  26. 26. 8. Conclusions The workforce of 2020 will look starkly different to that of today - with changing demographics meaning new rules, processes and ways of working that will affect us all. Soaring numbers of graduates mean that job seeking will change forever. Older workers will hold the aces like never before, and sandwich-generation workers will create entirely new working patterns. The task of managing people in a more flexible environment will become wholly more difficult in 2020. It will require a skill set that, in most cases, doesn’t exist now. For graduates, strange though it may seem, they will be motivated to work in traditional and not-so-flexible ways. With student debt a problem, we expect this group to be eager to advance – a more ambitious breed of graduates. The difficulties they will find entering the job market, however, mean they will apply a whole new level of enterprise and innovation to the job seeking process. Faced with a squeeze on both their money and their time, the sandwich generation will require sympathetic employers. The relative shortage of skilled labour and the appreciating value of experience will be their levers to force a more flexible approach from employers. The problem of an ageing society has benefits for older workers. The prejudice that surrounds this group will not disappear entirely but the value of experience has been highlighted by the recession and will lead to more power than ever before within this group, as knowledge and corporate memory become key. Another major issue is the riddle over flexible working. Demographic changes and the extension of the sandwich generation will force employers to offer greater flexibility in order to retain elite workers. However, home working provokes unintended consequences. Principal among these is that when we’re removed from the workplace and our colleagues, we remain individuals with a lesser sense of belonging to an organisation. This means the slow death of the company man. Future workers may feel themselves to be freelancers more than company people. It’s much harder to express a company culture and to share goals when workers are geographically spread. It’s also harder to exchange knowledge. Home working goes against the benefits of people working in teams and it may not be too strong to suggest that flexible working damages the knowledge economy.
  27. 27. While flexible hours offer some relief to parents and carers, flexible working is not a solution for all – many of us would rather trade flexibility for more pay while for others it means exclusion, a lower profile and being cut off from the very human interactions that will create the ideas for the knowledge economy. In 2020 people management will be a much more demanding task –in measurement, in motivation and in maintaining a sense of what the organisation is.

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