This blog post is the fourth part of our Evolving Workplace series. To hear more thought leadership, check out series episodes on the Remarkable Leadership Podcast.
What are the important choices organizations need to make in the next few (less than five, probably sooner) years to stay ahead of the competition? In some cases, these are things they must do to survive and stay in business. As part of our ongoing series on the Evolving Workplace, we’ve taken a look at how we got where we are in terms of remote, hybrid and in-office work. Now we have to ask: so what now?
In coming articles, we’ll look at what all this change means for individual workers and for leaders in the 21st Century. None of those will make sense if we don’t look at the context in which those jobs take place. What are the organizational challenges employers must address? Only then will those decisions make any kind of sense.
Here are five important trends that will impact the choices organizations make in the next few years.
The use and increased power of AI
We are probably all sick of hearing it, but AI is going to drastically increase the individual power of the user-employee while eliminating millions of existing jobs. Without being alarmist, we’re already seeing this in customer service jobs. Chatbots have replaced live humans in most interactions until only the most complicated challenges get kicked to real people. Some jobs will be impacted more than others.
The best example is bank tellers. To look at raw data, the number of people employed in the traditional role of “teller,” has dropped over 60% since the introduction of the ATM. Add in smartphone apps and you’ll see that banks are opening fewer, mostly smaller branches as in-person banking is dropping at about 20% a year.
The people who do work in customer-facing roles are filling the traditional role of a teller (mostly for older and poorer customers who don’t or can’t work with technology.) AI and other technology have made the individual far more productive. They handle far more customers in a shift than their counterparts a decade ago. More importantly, since they aren’t needed to perform simple tasks, many front-line bank employees are now opening accounts and handling services that used to be performed by more senior, experienced workers.
A similar change happened after the introduction of the PC, and laptops in particular. In 1993, six percent of the US Labor force was involved in secretarial or admin positions. That is now down to less than two percent and dropping. 75 million jobs just disappeared in less than a decade.
Organizations have a choice to either adapt to and benefit from the power of AI (knowing it will have huge impacts on staffing and services) or continue to pay more for labor costs, among other things.
Reaching customers has changed forever and Sales needs to adapt
No company can survive long if it doesn’t bring in revenue. Traditionally the role of Sales in an organization has been pretty well defined: people either take orders (inbound) or reach out (outbound) to prospects in order to get them to buy from the company. With fewer people buying from brick-and-mortar stores or interacting with sales people, this sounds like a job for automation and AI. The problem is that most people now use cell phones and screen (and then block) calls from anyone they don’t already know. Parents of millennials and gen Zs know that even if they don’t block you, few people check (let alone act on) voicemails.
Email outreach is largely considered spam and is becoming less and less effective, even with the help of AI in crafting the most targeted messages possible. What will your organization’s sales efforts look like five years from now?
Finding people to do the work
Finding, employing, and training good people has always been a challenge. It is about to become more difficult than ever. The paradox of current employment is that there are plenty of human beings to fill jobs, but they either aren’t trained to do them (resulting in big salaries and an inability to grow organically) or salaries make those jobs undesirable. That can lead to trouble finding good employees or keeping them. Current retail sales jobs have a Sixty percent turnover rate, meaning almost two thirds of people quit their jobs within a year.
Some employers are mandating return to office or hybrid work with a few days a week on-site. That addresses some of the demands for flexibility and work-life balance, which attracts talent. On the other hand, it still limits recruiting to the immediate vicinity of the workplace.
This doesn’t even begin to address the issue of public policy and changes in society’s approach to things like Diversity Equity and Inclusion. On the one hand, some employers will celebrate having the limits taken off on who they can hire and rid themselves of the costs associated with those efforts. This will cause a rise in the cost of hiring certain people, especially in middle management roles. Others will continue to find ways to leverage talent pools that are largely ignored or not accommodated. Employees, especially women, visible minorities, and the disabled, will likely suffer short-term upheaval in their roles.
Facilities, real estate, and operating costs
How much space do you need to operate at full capacity? What if you want to expand? If you let people work from home, do you need to have enough space for them?
How much floor space do you need for work to get done efficiently? What if some of those roles go away due to automation, AI, or increased efficiency? If you’re in a hybrid environment, your office will be empty some days and packed to bursting on others.
The return to office movement makes sense to employers on many levels, but the economic impact is real, especially with leases on many offices due to expire in the next three years. Allowing work from home makes more sense if you look at it on a square foot per revenue basis. If you are going to have a traditional office space, how will you accommodate hybrid work so that it maximizes collaboration while not resulting in empty cube farms several days a week?
Increased consolidation of the business environment
In times of uncertainty, many entrepreneurs and business people find it easier to sell to larger organizations. Whether this consolidation of industries in a few hands is a long-term good thing or not, it’s happening in a lot of industries.
It's easy to say that “organizations have to choose” how to address these challenges. But organizations don’t do anything but exist. It is the people, particularly the leaders, who must be willing to understand and adapt to a changing work and business environment. Resilience, leading through change, and a capacity to accept some sunk costs and shift to the challenges of a new economy will be the key.
We will examine this topic in an upcoming episode of our limited podcast series, The Evolving Workplace. You can also learn more about how to help the people in your organization make sense of what’s happening and adapt to the changing workplace by visiting KevinEikenberry.com and learning how we can help people be better leaders.
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