The past few years have seen low unemployment across many of the world’s economies. This, coupled with a global talent shortage, meant employers from across industries and sectors were competing fiercely for candidates.
A new world of work is emerging, however; one where candidates needn’t compete for full-time roles, and where employers can find the right talent exactly when they need it. We examine what this new paradigm means for companies, talent, and markets across the world.
Even before the job market disruption experienced in 2020, a profound shift in the way people work was taking place. Unlike their parents and grandparents, younger generations were no longer committed to the idea of a ‘job for life’ – last year, 91% of Millennials in traditional employment said they planned on staying for no more than two years in their current role.
72% of talent professionals agree that workplace flexibility is extremely important in shaping the future of recruiting and talent.LinkedIn 2019 Global Talent Trends Report
Non-traditional working arrangements such as remote working, freelance, project-based employment and short-term contracts had already become part of many people’s approach to their careers, but a significant number had yet to fully embrace these alternatives. 96% of freelancers still had additional income streams last year, but just 34% of freelancers surveyed said they resorted to gig work through necessity, proving that the shift is being driven by individual preference. Interestingly, 3 in 4 (76%) of non-freelancers said they would consider it if the economy were to enter a recession.
A values-based approach to work will also become increasingly prominent in the coming years. A 2019 survey shows that as well as seeking flexibility, today’s talent wants their work to be more meaningful (34%) and better paid (87%). Achieving a better work-life balance is also a priority (52%). 90% also want their work to have a positive impact on the world.
As more skilled workers move away from traditional modes of employment, companies are waking up to the need to find a modern solution to filling the roles they need, both today and in the long-term future. The changes brought by the workforce’s move towards this more flexible and on-demand world of work is therefore also being seen throughout organizations around the world, with many reaping the rewards.
A number of Fortune 500 companies are now embracing freelancers as part of their larger workforce, with cloud-based Freelance Management Systems experiencing a 26% increase in use. A 2020 survey of hiring managers indicates that they are now 47% more likely to hire independent professionals than they were in 2019, whist 73% say that they will continue or increase their dependence on freelance talent.
Over half (50%) of hiring managers believe that companies who fail to adopt a flexible approach to their workforce will fall behindUpwork
For businesses themselves, a more responsive approach to employment will bring additional benefits, including better control of workforce costs through hiring on an ‘as-and-when’ basis. Firms will be able to retain access to specific and specialized skill sets, while a leaner, more agile workforce is advantageous for productivity and resource planning.
Companies’ sovereign functions – their core operations and roles – and intellectual property will therefore become much more of a focus in the coming years. Management models will change to concentrate on managing and retaining access to an extended ecosystem of freelancers, suppliers, and other companies.
City living has always been closely linked with access to employment; talent had to live within a reasonable commute of their place of work. For many people, the rapid rise of remote working has put an end to this need. The possibility of remote working, combined with high costs of living and increasing population densities, has led many people to reconsider their living situation.
From Sydney to Manchester, reports are flooding in with a multitude of reasons on why people are seeking a less urban lifestyle. One 2020 survey claims that almost 40% of urban dwellers are now considering a move away from cities. However, an exodus of workers from cities will of course have a knock-on effect on cities themselves.
The US city of San Francisco may provide a glimpse into the future of other cities experiencing an outflow of residents. Notorious for high rent prices driven by its flourishing tech scene, San Francisco was also one of the first urban areas to experience rapid growth in remote working, which has been pioneered in no small way by the same technology organizations which drove migration to the area in the first place. The city’s tax income has also dropped by 43% since 2019, and restaurant and bar sales have declined by 65% in the same period.
Rent has also dropped by more than 20% since 2019 and office vacancies are now at 14.4%Sfchronicle
Obvious casualties of this shift are the service and real estate sectors, although it should be stressed that cities’ losses are rural economies’ gain – the movement of people out of cities and into suburban and rural communities will move enterprise and wealth into these regions and is likely to spur a host of new businesses starting up or relocating.
Adapting fast to these market changes is a matter of survival for businesses. Mantu is the partner of choice for many global organizations in overcoming cultural, organizational, and managerial challenges related to the Future of Work. Our holistic approach ensures your organization is ready to embrace the rapid changes we’re seeing across the world right now.
Our expert consultants are on hand to assist with the transformation of your workforce planning. Learn more about Mantu’s Future of Work practice here.