David Brown, Deloitte’s head of human capital, talks about the opportunities for HR to help leaders and organisations adapt to the radically shifting world of work.

Talking about the ‘future of work’ is like only seeing one corner of a picture. “Really we should be talking about the future of living,” says David Brown, head of human capital at Deloitte. “What we find helpful at Deloitte is to view that whole notion of the future of work in the different contexts of work, worker and workplace. Because when you do that, you start to be able to make more sense of what’s happening around each of those areas. It allows you to talk about the interplay between the three and it also allows you to think, as a human resource practitioner, what’s my part within that?”

So let’s break it down and talk about the nature of work, first of all.

It’s obvious to anyone that the way we work is changing rapidly with the impact of technology (robotics and AI in particular) and a massive growth in the contingent workforce. The result is a breaking down of the old certainties of fixed hours, employee benefits and a regular income.

Brown has a novel way of describing the new mix. “There are the hot bodies, working full-time and on the balance sheet; the warm bodies who are the contingent freelance workers, and the cold bodies which are the cognitive agents and the bots. The shifting nature of the shape of workforces between these three – that is a world phenomenon that is driving attitudes,” says Brown.

He says the freelance economy’s emergence in the technology sector, where there were particularly hot skills, “meant that the talent market (in the sector) had trumps on the opportunities, so they started to take power into their own hands relative to what they were doing”. It’s a work phenomenon here to stay, he believes. While it will vary by industry, he foresees it “levelling out at more of a 50/50 between the warm bodies and the hot bodies.”

Technology and shelf-life

The impact of technology is pervasive, Deloitte has found. And for both HR functions and individual workers, the next focus and one of the biggest challenges, is keeping pace. “The shelf-life of skills that we have is dramatically reducing from somewhere between two and three years compared to 10 or 15 a decade ago. It’s Moore’s law – the exponential way in which technology is changing is transforming the nature of what we need to know – which is dramatic.”

So to what degree are organisations enabling people to increase their own learning, and upgrade their skills?

“Here in Australia we spend almost twice as much on recruiting people than training and developing them. Doesn’t that tell you something? If organisations were to increase their spend on capability uplift, they would be able to reduce those hiring costs.” People’s ability to embrace technological change is one hurdle. But lagging behind individuals’ capacity to do so is the capacity of organisations, with the government even further off the pace, says Brown.

Employee experience

And so now we come to workplaces. Deloitte research looking at how people experience the effectiveness of learning within organisations produced surprisingly negative results, says Brown. “It was like 12 per cent (satisfaction). Because organisations have this old, clunky technology, they haven’t been able to transform the employee experience at the same speed that they have for the customer experience. We now have a situation where individuals don’t want to use the organisation’s email system or Yammer platform. Instead, they’re on Slack and everyone’s using their own personal devices. Employees are moving to platforms outside the organisation because that’s the way they want to learn and it gives them flexibility.”

Creating an employee experience isn’t just about having the latest gadgets. But with many younger employees not sticking around for the long term (60 per cent of millennials say they will change jobs or industries this year, according to Deloitte), those working in people strategy may wonder at the return on investment.

“Once upon a time, we talked about the career ladder. When I started as a graduate in the oil industry, I was presented with my career ladder and shown where I was going to go,” says Brown. “Then about 10 years ago, we started to talk about the career lattice. It’s more of a snakes and ladders model. I might go up this part, then I slide back down to this one, because there are things that are going on in different life phases – and that was okay. What we were trying to do there was broaden the career journey. But now, it’s about the experience of the employee. It’s changed in the same way that we now focus on customer experience.”

Organisations that are thinking carefully about this, and are trying to shape the experience that they’re creating for employees, are holding onto their people for longer, Brown believes. “I don’t think they will be able to hold onto them forever and a day. But as an employer, if you organise for a contingent workforce as a mindset… thinking of them as volunteers rather than organising for a permanent workforce, by doing that, you are more likely to make them want to stay,” says Brown.

Quality or quantity?

So, what’s better to have? A great person who stays for a year or two or a good person who stays for five to eight years?

“That’s a loaded question. Employers say it is all about engagement, but I don’t think it is. It depends on the nature of the work, the nature of the business that you’re in, and the nature of the jobs that you’re putting people into.” Deloitte research looked at what has the greatest impact on business return. Is it employee engagement, is it capability, or is it how a business organises the utilisation of its labour?

The results, says Brown, were quite varied. “For example, if you have a high-value, low-volume purchasing decision type business – such as a big decision around an aspect of health or home loans – what trumps everything at that point is the capability of the person who is sitting across the table from me. I care about what they know and I’m not fussed about how engaged they are. I’m talking about the customer, but it’s reciprocal. If you then start to focus your efforts on building capability for an individual, then you don’t need to spend so much on engagement.

“Whereas if you take the barista who prepares your morning coffee, the experience of how I interact with that barista when I buy my coffee is just as important as the coffee itself. What an employer needs to focus on in this instance is ensuring the employee is engaged.

“So, how does this relate to the advice for a human resource professional? I would say what’s important is knowing the value driver and aligning your effort to that. There’s no point spending all your money on trying to make people happy, if you’re not doing anything on the capability front,” says Brown.

But what about the leaders of tomorrow: the millennial generation who not only expect to be developed but expect happiness too?

“We’re trying to understand their level of optimism”, says Brown. “I think it was JFK who said: ‘The future promise of any nation can be directly measured by the present prospects of its youth.’ This means our youth need to believe the promises about where our country is going.”

Social conscience

This year, for the first time, the Deloitte survey saw an uptick in the loyalty of those millennials who want to stay with large organisations. It may be, given the failures in the broader global agenda, that some are now seeing organisations as places where they can make a difference.

Or it may simply be a reaction to belt-tightening and scarcity of jobs. Nevertheless, organisations that take on roles in social and environmental causes will appear more attractive to the younger generations, says Brown.

So going forward, Brown believes that HR leaders need to better understand the new rules by which organisations and the broader talent ecosystem want to play.

“There has never been a better time to be working in our space, and the question is, do we want to shape that space or become an empty space on the organisational chart?”

This article originally appeared in the August 2017 issue of HRM magazine.