"Only the lucky few will do more than serve a machine" Isaac Asimov, 1964
Authors: Stuart Matthews and Robert Jeffery
Fortunately, the fabled sci-fi writer was wrong and the robots aren't in control (yet). But what are the major forces shaping the workplace of tomorrow? And how should HR professionals react to them?
If you want to understand why a keen eye on the future direction of work - encompassing economic shifts, the development of tomorrow's skills and technological advances - is so crucial to being part of an organisation today, you could do worse than take a trip to your local branch of Blockbuster Video...
Except you can't. Once the pre-eminent video and DVD rental chain in the world, with thousands of branches spanning everywhere from Tokyo to Lima, Blockbuster was undone in double quick time by the arrival of a disruptive rival called Netflix, which offered DVD rental by mail. In 2000, Netflix offered to sell itself to Blockbuster. The offer was declined.
Even by 2005, Netflix was still just an upstart business slowly building scale. But by 2010, it had so fatally undermined its competitor's business model that Blockbuster filed for bankruptcy and delisted from the stock exchange in its native US. By 2013, Blockbuster was out of business, with Netflix having pioneered streaming technology that had rendered even the concept of owning a DVD obsolete in many parts of the world.
With greater foresight, it's arguable Blockbuster could have moved quicker - or at least embraced the future rather than hoping it would go away. But history is littered with similar examples, and their number only keeps growing as business becomes more volatile.
In 1960, the average company in the S&P 500 - the benchmark of multinational fiscal health - stayed in the index for 55 years. Today, it is around 18 years. Only 12 per cent of Fortune 500 firms in 1955 were still listed 60 years later. This is partly down to technology rendering business models obsolete (a trend accelerated by the rise of Silicon Valley) and partly because of financial engineering. But it's also true that many businesses have sat back and watched as global demographics have completely shifted, and have failed to understand how the rise of a global middle class, or the availability of a mobile labour market, would turn how they operated upside down.
Across the world, businesses haven't examined the future from a broad enough perspective, preferring to interrogate only their own sector or specialism, argues Laura Harrison, people and strategy director at the CIPD. While governments often think deeply about the skills they need and how they will invest in future talent, businesses (and HR professionals in particular) tend to be playing catch-up in the debate.
Making work better - for individuals, organisations and society - is only possible if work itself becomes more human, and more attuned to human needs. That means jobs, and companies, that are designed with people in mind; where being flexible and catering for the expectations and needs of diversity, ages, cultures, backgrounds and commitments is the new normal.
So many of the questions about how business and society will operate in the future fall squarely in HR's in-tray. Will we treat people as disposable cogs in the machine or hand them autonomy and stability? Will we increase bureaucracy or move to a model (best articulated, aptly, by Netflix's visionary former chief talent officer, Patty McCord) where people are judged by their results, rather than a more traditional means of performance management? Will we allow the emergence of the 'gig economy' to make some people's lives more precarious, or will it mean flexibility and choice for all?
The answer, says Harrison, is partly about a better grasp of work itself: "HR's primary concern should be a thorough understanding of the work people do, and what enables them to do it - we need to reduce our focus on policies and processes and put the human back into job design."
Meanwhile, an understanding of behavioural science - how and why people do what they do, as individuals, teams or organisations - offers the opportunity to put the human into decision-making and problem-solving. Handily, this is also the exact sort of skills and knowledge that sets HR apart as a profession.
And because so much of the future is contingent on what people, employees and consumers will look like, HR professionals have a vital stake in the discussion - to ensure the strategic elements of HR (such as skills development or workforce planning) are informed by the facts, and to help governments and experts make decisions that affect the future supply of talent.
"HR should be absolutely central to discussions about the future of work," says Harrison. "It certainly shouldn't be over in the corner doing its admin. As an HR professional with an identity, you have to feel you have some stake in the future as it's being created - and that means thinking about the public good is more important than doing the most short-term thing."
For HR to begin building on such thoughts, it must be willing to free itself from the purely operational and focus on more strategic concerns; considering the workforce of tomorrow rather than only the workforce of today, no matter how hard that is. If you are spending a large part of every day dealing with the immediate employee-related issues that land across your desk, are you able to think ahead? asks Harrison.
"It's important to ask whether the things you're doing day-to-day add value," she says. "Studies show HR is a devil for taking on new ideas and initiatives, but it can be harder to step back and ask what they are really achieving."
On these pages, People Management delves into some of the most pressing areas that may affect businesses in the coming years, and asks experts how GCC governments and businesses in particular should react to them. After all, the line between Blockbuster and Netflix is thinner than you imagine. As Harrison says: "The only thing certain is there will be more change."
The future of work is...
...about being truly inclusive
In some ways, the typical GCC private sector workplace, particularly a white-collar operation, is a poster child for diversity. With employees drawn from around the world, the office can be a cultural melting pot of ideas, creativity and comedic misunderstandings. But in the variety of this environment, it can be easy to miss what is not there.
"The most challenging type of diversity is gender diversity," says Khaled El Merachli, a consultant with Willis Towers Watson. "Women are still struggling to fulfill their ambitions to undertake senior leadership roles. Studies indicate the ratios of women in senior positions in GCC countries is still lower than other regions."
This is confirmed by a CIPD survey of GCC decision-makers - Workforce insights: a Middle East perspective - which suggests women make up around 26 per cent of workforces in the region, compared to around 40 per cent globally. There is clearly an issue with progression, too: only 15 per cent of local businesses can say that women make up more than 31 per cent of senior managers, and only 18 per cent can say the same about middle managers.
At the bottom of the regional pile sits Saudi Arabia, where there is still some way to go, with women holding just 13 per cent of the jobs. Saudi social enterprise Glowork is a gender-specific recruitment portal that has placed 26,000 women in the workplace since Khalid Alkhudair founded the business in 2011. It's a figure he expects to rise to 50,000 by 2017, driven in part by the fact roughly half the country's recent graduates are female.
The CIPD survey suggests that lack of flexible work opportunities, as well as lack of women in an individual sector, are key barriers to female progression. But 18 per cent of organisations have increased the number of women in executive board roles in the last 12 months, and the majority are taking action on the topic, with training and mentoring topping the list of interventions.
Although gender has been a hot topic, diversity incorporates different cultural backgrounds, age groups, skills and special needs. And the academic understanding of the term increasingly morphs with the idea of inclusion - that while meeting certain quotas for key demographics is useful, it means little if people do not have equality of opportunity and progression. Ultimately, in an inclusive workplace, difference should not be an issue.
While a diverse workforce can be difficult to achieve and may present new management challenges, there are distinct benefits, too. Successive studies have shown that diverse organisations are more financially successful because they bring multiple perspectives to problem-solving and innovation. "Young nationals who work in big organisations and find themselves dealing with Westerners, Asians or other Arabs start opening up to the fact there is more than their own little bubble," says Hanan Nagi, founder and CEO of UAE-based HNI Training & Coaching. "That helps them become not just more productive, but flexible and emotionally intelligent, too."
...in a world that feels smaller,
Globalisation as a concept has had a bad press of late. The UK's vote to leave the European Union dealt a blow to unity within the continent, while resistance to the Trans-Pacific Partnership - a huge trade deal involving the US and Asia - has been growing among a broad spectrum of the politically active. The Doha talks on multilateral trade have stalled. Apple and General Electric are among companies that have opened manufacturing facilities in the US as they begin to 'reshore' jobs, a phenomenon that has hit the Indian business process outsourcing (BPO) sector hard. And closer to home, lower oil prices may in the future dictate the extent to which countries invest their oil-generated wealth abroad, as well as where.
There is evidence globalisation may have peaked: Global Trade Alert calculates that the volume of world trade was static between January 2015 and March 2016. To compensate, countries may seek to increase trade on a regional basis, or find geographically closer trading partners. For the GCC, this means the Indian sub-continent or Africa.
Yet while globalisation's progress may be imperfect and stalling, it has spread rapidly and had a wide-reaching impact. Backed by sovereign wealth funds, governments have reached out globally and invested in businesses through their state enterprises. The result has seen the Gulf's vibrant trading activity boosted and a surge of newly mobilised people arriving to find work and build businesses.
"Globalisation drives the war for talent, affects the movement of people, and the growth of people moving across borders," says Steve Girdler managing director EMEA & APAC at HireRight. "The Middle East is in such a strong position to take advantage of globalisation because, in terms of how it has embraced talent coming in from around the world to help drive businesses, it has a successful model."
Without a doubt, globalisation is far from over, and there are a number of signs that investment is simply shifting from the likes of China to even lower cost economies. Africa has huge untapped potential, both as an employee base and a consumer market, and could certainly be the story of the coming decades. But political upheavals in parts of Europe and the US have shown that the liberal orthodoxy of the free market, which drives global trade, should not be taken as a given.
...where 'caring' counts
It is generally a given that companies can no longer put the pursuit of profit above all other goals. Social media means transparency is everything, and companies that do wrong - or don't actively seek to do good - have few places to hide. At the same time, consumers expect high standards from the people they buy from, and millennials increasingly seek out employers who aspire to a higher purpose.
Welcome to the modern-day version of corporate social responsibility (CSR). And since employee engagement is a critical side of the coin, it's an area where HR is involved. In the GCC, the idea of CSR is still in a nascent stage, and while there are plenty of examples of companies engaging in community-focused activities, aligning such programmes with their core business is rare, says N. Craig Smith, INSEAD chaired professor of ethics and social responsibility.
There are, however, some standout examples of businesses making a real difference. In its annual sustainability report, developer Majid Al Futtaim, for example, demonstrates CSR activity that encompasses everything from green building policies to labour standards and localised economic development, all under a sustainable umbrella. The company's reporting on the issue is notable for its depth, transparency and efforts to measure the value it achieves in its local communities.
But many organisations still see community activities as something "more akin to philanthropy," warns Smith. True CSR (in its current understanding) means broad activities that demonstrate concern for wider society, and the notion of being a good 'corporate citizen'. It can be seen in consumer goods giant Unilever's 'Sustainable Living Plan' that sets ambitious targets for environmental impact in its manufacturing processes (it now sends no waste to landfill from 600 different factories).
But there is a disconnect lurking. KPMG's fourth annual Global Consumer Executive Top of Mind Survey shows a distinct gap between the importance of CSR to executives in building brand and loyalty, and how much consumers valued those same actions. When it comes to CSR, 30 per cent of executives have it in the top five of their to-do lists to build trust, whereas only 16 per cent of consumers identify it as important. What we mean by CSR (if we mean anything at all) will continue to evolve.
...and people demand more, faster
What do customers want? No question tests a business more, or more often. Getting the answer right is both crucial and difficult. Customer demands are a shifting collection of wants and needs, influenced by gradual changes in demographics and accelerated by the immediacy of digitisation.
Across the board, customers expect greater choice, service, seamless and friction-less interactions and, in particular, personalisation. These expectations are changing how businesses look - with nimble, highly empowered organisations gaining rapid market share - and the way people work. As customers lead more flexible, more fluid lives, they expect the same of companies they interact with.
The workforce has seen similar shifts. "We're moving to a much more collaborative and empowered workforce. It's a more creative, more mobile, better educated, younger and more diverse group, which has very different expectations," says author and consultant Fleet Maull. "The primary thing is that really creative companies are going to work in less structural, less linear, less top-down ways that optimise each person's engagement in their work and therefore their motivation, creativity and productivity."
Getting it right means having flatter, more responsive organisations with fewer layers between customers and the business. Essentially, anyone the customer comes into contact with should be able to respond almost immediately. That, says Maull, means successful companies are training and empowering their people at all levels to handle greater responsibility. "Part of it is how much our world has sped up and with the digital age people are accustomed to getting what they want pretty quickly," he says.
This feeds into a broader debate about how businesses are organised, which has been given new impetus by the advent of tech start-ups that have been increasingly prepared to rip up the rule book. Whether it's the 'holacracy' system of management that was all the rage last year, or the lattice-like accountability pioneered by Spotify - where people work in cross-functional teams, but are managed according to their technical discipline - rigid structures and austere performance management practices just don't cut it any more.
Whatever the shift in company culture, organisations must remain connected to the customer. Meiraj Hussain, group HR director of Fakhruddin Holdings, which has a large trading operation in the UAE, says the shift to e-commerce has had an impact on staff and HR. "We need new skills within the business. The traditional skills of the sales guys [in showrooms] speaking three or four languages and being able to close [customers] as they walk through the shop are not relevant today," he says. "Asking them to change the way they do business is not easy; because we've got people who've been with the business for 25 to 30 years."
Brockbank believes organisational culture is a critical part of competing. "Culture is how people think and how they behave together, but a second and important qualifying characteristic is that for culture to be relevant, people have to behave and think in ways that are dictated by, or are consistent with, the requirements of the marketplace. The culture a firm needs has to be consistent with the competitive realities as dictated by customers, competitors and, in some industries, regulators."
Brockbank says the key issue to help companies adapt is to make sure people in an organisation are thinking and behaving consistently - not just on an individual basis, but collectively. And in that way, HR begins to shift its focus away from individual notions of 'talent' to a focus on teams.
You'll need to reflect your markets
Per capita incomes among the oil-producing states of the Middle East soar above those in the rest of the world. The area is a magnet for expatriate staff. But underneath lurks an issue nobody in a GCC country can fail to have engaged with: nationalisation, or the drive to get more local citizens into the workforce.
Each time the region's well-documented youth bulge gets bigger, so the need for states to create jobs for their own citizens becomes more pressing. Figures from the Arab Youth Survey 2016 show youth unemployment in particular remains high in all but one of the GCC states - Qatar.
Research by the International Monetary Fund in 2014 suggested that if the share of nationals in the private sector didn't change across the region, around 600,000 private sector jobs would be generated for nationals by 2019, or enough for only about 30-50 per cent of the nationals expected to enter the labour market. That leaves a significant shortfall businesses must help address.
In Saudi Arabia, the response has been to become more prescriptive about how fast nationalisation takes place in certain sectors and functions. In the UAE, a quota system is in place for the private sector, but these rules do not always apply in the many free zones. Significantly, forthcoming legislation affecting the UAE's banks will mandate the level (as well as the number) of Emiratis, tackling for the first time the systemic issues relating to promotion and progression inside organisations.
"While the governments of the GCC countries are focusing on developing nationals and there are a lot of initiatives, it is not always easy to achieve ambitious targets because of the demographics and certain cultural restraints," says Nagi, who runs programmes to enhance the performance of nationals in the workplace.
This can leave nationals competing for jobs with state and semi-state employers, rather than exploring what the private sector might have to offer. It also leaves private sector companies typically well short of mandated but unenforced nationalisation targets. While Nagi believes the public sector is doing well to reach out to nationals, particularly young women and graduates, the private sector has much to learn.
"If the private sector understands what's important culturally and professionally to the local talent, and if it could offer more opportunities that are professionally and culturally suitable, it would see more nationals working in the sector," she says.
The good news is that, according to Nagi, there is no lack of talent or ambition among the young people she sees entering the job market. "I find it refreshing, actually, when we train fresh graduates who are first-time managers and I see how keen and hungry those nationals are to learn and develop," she says. "It's very, very promising."
...and make sure the robots don't take over
Since robot arms first cut a swathe through the rank and file of auto manufacturing in the 1970s, production line workers have feared for their jobs. Some still do, as a new wave of automation threatens manufacturing jobs. But it has been supplemented by a new concern: code-powered intelligent machines that could replace skilled and semi-skilled white-collar jobs.
It's about the ability of software and machines - particularly those that can 'learn' tasks - to take over all kinds of routinised work over time, from payroll processing to receptionists via basic medical diagnosis.
While the GCC has not seen this kind of change at any significant scale yet, for some sectors it could be on the near horizon. A 2015 survey by consultants Frost & Sullivan looking at logistics businesses in the GCC, found many organisations expecting to adopt automation in warehousing and transportation.
Current automation technology for materials handling equipment is well suited to working in the closed and controllable confines of a warehouse, and similar automated technology is also being deployed in ports around the region, where container freight is increasingly being handled by robotic cranes as a way of boosting throughput and efficiency.
However, there is a long way to go before the robots take over completely, even in ports and logistics operations. The Frost & Sullivan survey found the level of penetration of automation is low because of the current high cost of implementation.
In developing markets, such labour-saving technologies may wipe out jobs faster than countries can replace them, according to Carl Frey and Ebrahim Rahbari, authors of Do labor-saving technologies spell the death of jobs in the developing world? They suggest the big issue might not be a new wave of unemployment, but the challenge of creating rewarding jobs in an automated world.
Proponents of AI believe the technology will create more wealth than it destroys, and far more slowly than expected. "In the short term, it will influence the workplace more in the tools we have and the capabilities of those tools," says Jana Eggers, CEO of Nara Logics, a Boston-based company behind a neuroscience-inspired AI platform for decision support. "Some of the things we hate spending time working on, which feel like very low level tasks, will go away."
The alternative view is that we simply will not need people when machines can take on their tasks and governments may need to introduce guarantees such as a universal basic income, as part of a radical reshaping of how the economy works. HR may have a key role in countering such pessimism by emphasising the value of the human dimension of the workforce.
- Read more at the CIPD's Future of Work is Human website: futureworkishuman.org
...before we get to grips with the stats
In the same way customer data has grown exponentially in recent years, we know more about our employees than ever before. But what do we do with this explosion of information? Does it have a role in predicting recruitment issues - whether recruiting the right staff, or pointing to those who might leave? And can it help guide discussions about future skills needs, remuneration and workflows?
In the GCC, there are some signs of emerging regulatory efforts to improve the quality of, and access to, data. In 2015, Dubai enacted an open data law to encourage data-driven innovation and entrepreneurship. But using data to aid HR is as much about getting the right information into play as it is about finding new ways to analyse performance, or assess a person's suitability for one role over another.
A 2015 CIPD report, Evolution of HR analytics: a Middle East perspective, found that the region had a significant opportunity to bypass legacy behaviours and technologies witnessed elsewhere in the world and begin making data-driven decisions.
Dubai-based outsourcing business Tanfeeth (owned by Emirates NBD), for example, has dealt with a rapid period of expansion by cleansing and rationalising its data to create a massive, centralised source of information on its thousands of employees. The resulting improved insight has helped the company zoom in on specific parts of the business and immediately see the impact of organisational development work.
Part of the knack may be realising that not all data is created equal. In fact, data created by people might only be as good as the people themselves, encumbered by their biases and accompanied by unwitting prejudices.
Marcus Buckingham, business thinker and author of HBR article 'Most HR Data is Bad Data', suggests people are to blame, especially when it comes to rating someone's performance. Despite research pointing to internal ratings being unreliable, and the data they create being as much a reflection of the assessor as the person being assessed, pivotal decisions are still made on the basis of often erroneous results.
Technology may provide part of the answer by offering the ability to go big on the data itself. Gathering up information on employees and potential employees can help get the right people in the best positions, but also provide insight into how an organisation's culture may develop.
"What we found, through a range of experiments, is that individual managers are very inconsistent in their ability to articulate what traits they want in order to achieve a particular culture, and figure out if a particular individual holds those traits," says Michael Rosenbaum, CEO of Arena, a software company focused on people analytics.
Employees may resist such apparent intrusions of privacy but, says Rosenbaum, much of the information is already out there. From third-party analytics in the public domain, people's own resumes and data collected specifically through interaction such as questionnaires, it can all help map and predict outcomes across millions of job applications each year.
At its most flexible, analytics can enable scenario-modelling that shows at the touch of a button what happens to diversity, skills and salaries if you close a particular operation, or channel investment in a new direction. But there are two big questions to be answered first: does HR have the mix of skills to analyse and understand the data it handles, and have organisations got good reasons for embracing big data, beyond feeling it's a bandwagon they ought to board?
"The way people buy products has changed"
Meiraj Hussain, group HR director, Fakhruddin Holdings
What changes are influencing your business and your staffing?
We are a very traditional business, typical of a lot of companies that are merchant family businesses in the region. One of the big changes we've seen is that the way clients buy products and services has changed dramatically. We have several showrooms in the Deira bazaar and historically in our business, we've had clients who come to the bazaar, do their shopping in that very traditional way and we put [their goods] in the container and they sail off to Mombasa or wherever else. Now, the younger generation of business owners from Africa and other traditional markets are no longer coming to the bazaar. They don't buy products in that way. E-commerce is a very big trend and it's changed the way people buy things dramatically.
We have 16,000+ products that we sell across household, luggage, kitchenware, DIY and sundry items. We're having to put all our products online and digitise the business. That is a big change and we need a lot of new skills within the business.
Are there upsides to the changes?
The sales work [has shifted] from the traditional sales guy sitting in the shop, to the back-end call centre individual. The cost of doing business and delivering business has also come down quite significantly, because we don't need expensive showrooms. We still have them now, but in the future we will not need them.
Has this put a greater emphasis on technology and technology-related skills?
Absolutely. If we have a customer, for example, and their buying pattern is to buy from us once every other month... if the customer doesn't place an order every second month, we should be relying on a salesperson to recognise that and alert us. Then somebody could make an outbound call and ask the customer: "We've noticed you haven't purchased from us this month. Can we help you with anything?"
Retention of customers using technology is very important to us. The automation needs to be there. I think mining your big data on customers, buying patterns, behaviours, all that type of stuff is becoming a lot more important to businesses like ours. I know many companies are looking for the same skillsets we are, and I see a growing trend to hire individuals who really understand how to engage with customers using technology, and push offers to clients.
"We want to offer the best welfare standards"
Minelle Gholami, people director, Emrill Services
How are issues around worker welfare affecting your business?
It is a burning issue at the moment, and with the diverse demographics we have coming in and out from a number of developing nations or third-world countries, those issues are becoming very important. Not just in terms of our ethical values and principles, but also in terms of compliance with supplier requirements, client requirements and reporting back to the UK, where one of our shareholders is a PLC. While we are always keen to explore new territories to hire staff, there are practical challenges in that. There is a lot of legal governance and compliance required to move workers legally from one country to another.
What challenges are presented by having such a diverse group of employees?
There are the practical challenges of blending people into the business if we bring workers in from a territory we've not recruited from before. If language is a challenge, how do you get them into the right teams where the supervisor is able to communicate with them? There tends to be a little bit more of a leaning towards certain cultures because there's a common language spoken; that centres around south Asia, and certain countries in Africa. And all those countries now are becoming more aware of how we can help protect the rights of individuals who are travelling to other countries for employment.
How do you stay ahead of the different international regulatory requirements?
We benchmark an international standard that most companies are aiming to follow now - the Dhaka Principles. They lay out very clear criteria. We try to stay ahead by doing things voluntarily. In terms of the welfare and wellbeing that we provide our colleagues at Emrill, we're a little bit ahead of the competition. We want to be the best because we want our colleagues to be engaged and embedded in our business. The working culture here is very important to retention, and retention is very important when it comes to development, progression and organic growth of talent in the business.
"Diversity makes you so much more productive"
Riham Dewidar, head of HR, Middle East, India & Turkey, Fujitsu
How does an international company filter down its programmes of diversity and inclusion to a location such as the GCC?
We have a very extensive and diverse range of inclusion programmes across the globe that meet international standards, where we obviously abide by all the gender, ethnicity, religion, disability [requirements]. We abide by them in everything that we do, from employment to engagement, and in the GCC we say they are the standard. But some things that are considered customary in other countries wouldn't necessarily work here for us in the GCC.
It's been easier than you might expect, because [governments] actually are really trying to adopt these philosophies and practices as well. For example, in the UAE, the constitution actually states all individuals are equal in law - there is no distinction among citizens on the basis of origin, nationality, age, or social status. That fits nicely with how we put things in place.
Does the requirement for gender diversity have an impact on your local business?
In the UAE, there is a huge focus on women in the workforce, which is perfect because that is a big focus for us as well. When I first joined, there was only one other women in a leadership role here in the GCC. Right now, it has been a year, and we have four more women in our management team of 10 people. That has been quite nice for us, in the male-dominated IT industry.
What do you see as the benefits of diversity in the workplace?
You become so much more productive. It brings a completely different dimension to productivity and ideas. I think it also shows how we can relate to many different types of customers.
There is going to be a shift towards a diverse workforce. Companies with a history of sticking to one nationality are widening their scope, and breaking those barriers, because they have seen that the times are moving so much faster now than they can cope with - they are losing a lot of their edge.
The long-term view
In October 2015, the CIPD published a major piece of research highlighting the gap between ambition and practice when it comes to ethical decision making in business. The results were based on a survey of more than 10,000 HR practitioners and business leaders.
9 in 10 said that long-term goals were more important than short-term gains but, in practice, only 1 in 4 were actually prepared to make short-term sacrifices for long-term gains
1 in 3 reported they have to compromise their principles to meet current business needs
- Find out more about the CIPD's work on helping HR meet the needs of a changing world of work by visiting the Profession for the Future website at bit.ly/2fqfCOb