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As the social landscape shifts, so must businesses—after all, businesses rely upon humans to exist. Deloitte has called 2018 the year of the “social enterprise,” and corporate responsibility is emerging as an increasingly important component to businesses. In his annual letter to CEOs, Larry Fink, BlackRock’s chairman, CEO, and co-founder, stresses the importance of implementing new models of corporate governance that focus on long-term strategy, delivering value to communities, and fostering diversity of thought, ethnicity, gender, and career experiences.
Make no mistake—for the most part, businesses have always been socially minded, and impacted their communities and beyond. But thanks to today’s radical transparency, any negative impact isn’t tolerated. To create positive change, businesses know they need to engage with all stakeholders, including their employees, customers, and larger communities.
How a business delivers on that change starts with how it operates internally—and that means it starts with people. Human capital refers to the value an individual or group of people brings to an organization, business, or other community. According to Deloitte, the major human capital trends for this year are driven by three major factors: demographic shifts, heightened expectations for social responsibility, and technological advances. Here’s what to expect.
Two major demographic shifts are altering the current workforce: aging workers with longer career trajectories, and an increasingly fractured work ecosystem.
An aging workforce comes with two major challenges: The first is that older workers require different care and resources, and the second is the issue of ageism in the workplace.
Firstly, as businesses begin to see workers with 40-year, 50-year, or even longer career paths, it’s important to think about how to help those employees shape their careers. Under the traditional model, workers were cycled out once they reached their 60s and given a pension. Now, people aren’t necessarily retiring that early. As a result, businesses must consider how to help employees continue to learn and develop over a much longer career arc, and offer opportunities to pivot if they’re looking for a change.
Current challenges with baby boomers are that some employees “retire in place,” while others become overworked with no one qualified to take over their projects. Finding a way to create a sustainable late-career situation will be important as workers retire later.
In addition to these challenges, ageism is a concerning reality that we often don’t address. People want to work longer, but it’s harder for older workers to find jobs. There’s also evidence that older workers experience less growth in their existing jobs as a result of age discrimination. Older workers can provide valuable experience and diversity of thought, but only if businesses allow them the opportunity to do so.
One way to abate age discrimination in the workplace is to implement mentor programs. By pairing older workers with younger ones, you can provide valuable information transfer to younger workers and make older employees feel valued.
In addition to the rise of longer careers and older workers, business owners need to navigate an increasingly fractured work ecosystem.
Traditionally, employees would work set hours at a company office and be supervised at all times. But because of an all-encompassing internet, this is no longer the case. Companies have started to hire more remote and contract workers, which presents coordination and quality control challenges. It also means that it’s harder to create a cohesive work culture that successfully integrates full-timers with remote and contract workers. In addition, alternative workers are often not provided with benefits such as health insurance and paid leave that full-time workers have access to.
Businesses need to figure out how to incorporate remote workers into their culture and internal processes, and understand that they deserve to be treated equitably as employees.
Businesses are increasingly judged by the positive change they enact, but social impact doesn’t only apply to the outside world. What also counts is how a business treats its employees and ensures their well-being, both in and out of the office.
While it’s important to establish initiatives that give back to your local community, it’s also important not to let those measures distract you from boosting employee morale. Of course, you want to do whatever it takes to keep your employees happy because it’s simply ethical, but it’s also been shown that employee well-being has strategic value. Better citizenship records are associated with better financial performance, and correlate with higher-quality hiring and higher retention rates. Employee satisfaction is also an important part of reputational management, as any mistreatment of your employees can quickly become public.
But what does supporting employee well-being even mean? The idea of well-being has come to encompass all aspects of a person’s life, from physical health to emotional balance. But in many countries, people are working longer hours and taking fewer vacations; for all the talk of work-life balance, it seems to be lacking. Here again, though you may simply want your employees to be happy and lead fulfilling lives, there is evidence that a balanced emotional state leads to higher productivity.
Technology affects almost every aspect of our lives, so it makes sense that it would also impact how businesses operate. According to Deloitte’s study, three major ways that technology is beginning to affect the workplace are through artificial intelligence (AI), people data, and productivity tools.
For a long time, most of our fears about AI have been stirred up by speculative or fantastical Hollywood movies. Recently, though, there has been a real fear that AI will destroy jobs, and studies predicting significant job loss due to AI only exacerbates that fear.
Despite an impending fourth industrial revolution, researchers predict that humans will fare much better than machines in situations with high levels of ambiguity and unpredictability. Not only that, but for AI to even exist, humans must teach computers.
So, the challenge for business owners is less about how to push back on technology and more about helping employees work alongside the machines that increase their productivity.
Employee data is another area that requires some adaptation to technology—with HR departments becoming increasingly automated, there is more data collected about employees than ever before.
That technology can be used to effectively address pain points and better meet employee needs but also comes with risks and challenges. How much information is too much? When do we cross the line into invasion of privacy?
And with more data comes the added concern of cybersecurity. Cyber attacks are becoming more of a “when” rather than an “if,” meaning employers must be adequately prepared to protect employee data and use it responsibly.
Finally, technology is a major player in managing employee productivity. Slack, Atlassian, Cisco, and other companies have created tools that make workplaces more connected than ever.
At first, hyper-connectivity was championed as a way to increase collaboration and productivity. But now, we’re starting to see inboxes fill up and employees get bogged down with messages. The challenge is balancing how much we communicate and when. Where is the tipping point between necessary communication and unnecessary stress? Businesses must be prepared to navigate this if they expect their employees to be healthy and productive.
These trends may be for human capital in 2018, but they indicate major shifts that will take us beyond this year. Businesses must be prepared to deal with shifts in the social landscape if they expect to remain relevant and effective. This may seem overwhelming for your business, but don’t think you need to tackle all of these trends once—simply being aware of possible challenges can be enough to help you adapt as you grow.