Articles

10 forces changing our workplace (I): Economy

by Eduardo Estellita on abril 26, 2012

These days it’s not uncommon to hear “the winds are changing”. Even in this blog you’ve probably noticed that nearly in every post there are references (and evidences) to those changes.

Still, it seems that in some companies and universities, theories about a need for businesses to undergo serious internal changes are met with the same scepticism as astrology, as if a changing world had to be proven scientifically over and over again. As Ken Robinson’s subtly mentioned in his famous “Bring on the learning revolution” TED talk: “If you don’t believe in a major climate crisis, you should get out more”.

To cement the discussion, the first chapter of the very well documented “The 2020 Workplace” book by Jeanne Meister and Karie Willyerd introduces the 10 major forces (and challenges) changing our workplace now. Throughout the next 3 posts, we will revisit them in 3 subgroups (Economy, Technology and Society):

1.       Workforce demographics

In demographics there are four superposing trends in developed countries responsible for an accelerated increase in generational, gender and ethnical mixity, and requiring employers to learn to manage a more diverse workforce.

a) Declining fertility rates and shrinking workforce population

b) Higher portions of immigrant population, due to accentuated migration inside Europe and higher fertility rates in the last decades compared to originally local population (Latino and Islamic portions tripling in America and Europe respectively)

c) Increase in older active population (55 years-old and above will represent 1 out of 5 employees in 2020), due to increased life-expectancy and pension cuts

d) Massive arrival of Gen Y in the workplace representing in most developed countries half of the working population by 2013.

2.       Knowledge economy

There’s an increase in complexity of skills to get a job in the new developed markets. As companies streamline, automate and outsource some transactional jobs, the tacit workforce segment (positions that require problem solving, judgement, listening, data analysis, relationship building and cross-cultural collaboration) grows 2,5 times faster in developed countries as the transactional jobs. According to Forrester Research, at least some 3.3 million white-collar jobs in the US will shift to BRIC countries by 2015.

3.       Globalization

Globalizations most known forces are the opening of markets and competition in labour cost, but it certainly does not stop there. Globalization has added to business complexity in several other ways, altering forever the dogma of the “established organization”. Century-old companies have met demise and severe restructurings. In fact, whole industries have disappeared or entirely changed business model (take for example the different directions taken by Fuji and Kodak).

A clear example of the uncertainty of a company’s continuity these days comes from Fortune 500 list. If a company was on the list in 1980, there was a 56% chance it was still listed in 1994. Of the 2007 list, only 30% of them were there in 1994 (and that’s before the 2008 crisis). Moreover, between 2005 and 2009, we’ve moved from a world with a strong hegemony by US, Japan and Europe (from 77% to 68% of Fortune 500 headquarters) to a multi-polarized world in which BRIC grows from 4% to 14% of Fortune 500 headquarters.

The implications in labor relations are enormous. First it means that managers are no longer leading by proximity, clear hierarchical lines and face-to-face coaching, but now balancing complex cross-departmental relations in a matrix structure, an independent or virtual workforce and multi-location employees. Secondly, as new businesses rise and compete from different areas of the world, the old assumptions of “correct” people management are put under the microscope and seen under new light. Cultural management becomes a new and inescapable phenomenon to competitive organizations (to which generational management is only a part).

How has globalization changed the way you manage your team?

10 forces changing our workplace (I): Economy

by Eduardo Estellita on abril 26, 2012

These days it’s not uncommon to hear “the winds are changing”. Even in this blog you’ve probably noticed that nearly in every post there are references (and evidences) to those changes.

Still, it seems that in some companies and universities, theories about a need for businesses to undergo serious internal changes are met with the same scepticism as astrology, as if a changing world had to be proven scientifically over and over again. As Ken Robinson’s subtly mentioned in his famous “Bring on the learning revolution” TED talk: “If you don’t believe in a major climate crisis, you should get out more”.

To cement the discussion, the first chapter of the very well documented “The 2020 Workplace” book by Jeanne Meister and Karie Willyerd introduces the 10 major forces (and challenges) changing our workplace now. Throughout the next 3 posts, we will revisit them in 3 subgroups (Economy, Technology and Society):

1.       Workforce demographics

In demographics there are four superposing trends in developed countries responsible for an accelerated increase in generational, gender and ethnical mixity, and requiring employers to learn to manage a more diverse workforce.

a) Declining fertility rates and shrinking workforce population

b) Higher portions of immigrant population, due to accentuated migration inside Europe and higher fertility rates in the last decades compared to originally local population (Latino and Islamic portions tripling in America and Europe respectively)

c) Increase in older active population (55 years-old and above will represent 1 out of 5 employees in 2020), due to increased life-expectancy and pension cuts

d) Massive arrival of Gen Y in the workplace representing in most developed countries half of the working population by 2013.

2.       Knowledge economy

There’s an increase in complexity of skills to get a job in the new developed markets. As companies streamline, automate and outsource some transactional jobs, the tacit workforce segment (positions that require problem solving, judgement, listening, data analysis, relationship building and cross-cultural collaboration) grows 2,5 times faster in developed countries as the transactional jobs. According to Forrester Research, at least some 3.3 million white-collar jobs in the US will shift to BRIC countries by 2015.

3.       Globalization

Globalizations most known forces are the opening of markets and competition in labour cost, but it certainly does not stop there. Globalization has added to business complexity in several other ways, altering forever the dogma of the “established organization”. Century-old companies have met demise and severe restructurings. In fact, whole industries have disappeared or entirely changed business model (take for example the different directions taken by Fuji and Kodak).

A clear example of the uncertainty of a company’s continuity these days comes from Fortune 500 list. If a company was on the list in 1980, there was a 56% chance it was still listed in 1994. Of the 2007 list, only 30% of them were there in 1994 (and that’s before the 2008 crisis). Moreover, between 2005 and 2009, we’ve moved from a world with a strong hegemony by US, Japan and Europe (from 77% to 68% of Fortune 500 headquarters) to a multi-polarized world in which BRIC grows from 4% to 14% of Fortune 500 headquarters.

The implications in labor relations are enormous. First it means that managers are no longer leading by proximity, clear hierarchical lines and face-to-face coaching, but now balancing complex cross-departmental relations in a matrix structure, an independent or virtual workforce and multi-location employees. Secondly, as new businesses rise and compete from different areas of the world, the old assumptions of “correct” people management are put under the microscope and seen under new light. Cultural management becomes a new and inescapable phenomenon to competitive organizations (to which generational management is only a part).

How has globalization changed the way you manage your team?

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