Companies must respond to the new economic and social
realities accelerated by the COVID-19 pandemic.
As we return to a changed landscape of work, we have an invaluable opportunity to reset what we do and how we do it.
With people risks mounting for employers as they seek to drive transformation efforts with a depleted workforce, re-examining a more humanistic work model through good work standards can drive positive change for individuals, businesses, investors, customers and communities. This stakeholder capitalism - connecting value creation for multi-stakeholders - is at the heart of redefining the future of work agenda. Getting it right requires a rethink of work, unhooking from outdated models of jobs, unhinging from defunct employment models and upending what corporations and governments think workers want.
In the wake of COVID-19, economic volatility, exposed inequalities, the climate crises and social justice movements, businesses have been challenged to their core. This is driving many leading firms to reconfirm their commitment to diversity, equity, inclusion, ESG and racial justice causes. A few leading firms are taking these pledges even further and setting new work standards that align with their values and enable them to govern the translation of these values into practice.
Key aspects of decent work are embedded across targets of the United Nation’s Sustainable Development Goals vision, and focus of Goal #8 – which calls for the promotion of inclusive and sustainable economic growth, employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. Leading by example is "The Mayor's Good Work Standard" which brings together best employment practices and links to resources across London to help employers improve their organizations.
There are a series of new work and social realities that are shaping the dialogue:
The pandemic has disproportionately impacted working women and minority groups with gaps in pay, promotion and pensions soaring. The World Economic Forum's Global Gender Gap Report shows that the pandemic has set equal gender pay back by a generation and done nothing to reduce the staggering 268 years needed to ensure same pay for same work.
Some employers have responded with caregiving benefits and inclusion programs targeted to outlier populations, others are focused on living wages and pension strategies, and a few employers are promoting social mobility agenda through outreach programs and targeted hiring practices (such as removing degree requirements from job descriptions). There is a board level willingness to dialogue on social justice, embed employability targets for local communities. Fund managers are also pressuring companies to address women’s job losses and taking a more inclusive lens to work.
Post-pandemic we’re seeing how working models – even when remote – put enormous pressure on employees to balance work and life. We are now experiencing the consequences of delayed preventative healthcare and rising mental health issues. Employers must stay alert to the importance of having a comprehensive wellbeing strategy in place if they are to ensure their people continue to thrive. Employees working more than 55 hours a week are at a 35% increased risk of stroke and a 17% increased risk of dying from heart disease, according to a new study by the World Health Organization and the International Labor Organization.
Digital capabilities and the expansion of digital care hold great promise. Digital mental health firms have seen a collective investment of over $1.6 billion in 2020, globally marking a record year, and sectors for new unicorns led by fintech. Increased longevity will mean added financial planning and more flexible employment options to support aging workforce populations. As such, employers have a real opportunity to push the physical, emotional, and financial health agenda forward.
A pivotal change in mindset is healthy living as an expectation of work outcome. This is critical given the majority (71%) are planning a hybrid work model in the future (Mercer’s latest poll) and nearly 10% do not plan to go back to the office. Maximizing productivity and flexibility in a blended work environment requires an examination of how work gets done. Leading companies are adopting non-traditional ways and methods to accelerate the flow of workers to opportunities. This calls for greater transparency of work practices throughout a company’s supply chain, driving a clearer articulation of what is quality work and strategies that promote safeguards for all workers.
Businesses have an increased need for on-demand workers (up to 50% of workforce), driven by cost-benefit analysis of being able to bring a set of skills into the business without the overheads of traditional employees - enabling access to a wider talent pool. But there is considerable pressure to integrate contract, freelance and part-time workers with secure benefit options for a better future. With the rising focus on gig worker conditions (such as the UK ruling on Uber), it is no surprise that leading firms are looking to ensure living wages, as well as fair and portable benefits for those who are in the platform economy. The key will be ensuring that as new standards evolve, flexibility and employability at the crux of the platform economy are not lost.
Employees are increasingly looking for reskilling and upskilling opportunities at work, with empowerment to learn. According to the Mercer 2021 Global Talent Trends Study, when asked what helps them thrive, the top two employee answers were “Opportunities to learn new skills and technology” (43%) alongside recognition for their contributions (42%). This represents a major shift from the “desire for work/life balance” answer that topped the list in 2020. Ensuring future employability through skills is now a critical part of the employment contract and one employers need to adequately address
The Forum expects work to be divided equally among humans and machines by 2025, with machines carrying much of the heavy lifting with respect to data processing, administrative tasks and routine manual jobs for white- and blue-collar workers. This demonstrates a vital need to upskill and reskill for new jobs across levels and requires a shift in thinking away from jobs and into skill units that employees hold. A focus on technology and digital skills is only half the equation; individuals also need to prepare for more service orientated roles and creative occupations - implying greater cognitive-adaptability, design-thinking and empathetic reasoning if workers are to fulfil their human potential in a machine-augmented future.
Corporations are in a unique position to lead the agenda on stimulating employability, but they can’t succeed in isolation. More innovative and collaborative approaches to promote labour resilience are needed – such as an internal and external marketplace that matches employees to business (whether within or outside one’s industry) and an overhaul of existing hiring, pay and promotion criteria. Due to COVID-19 in 2020, up to 44% of organizations made it easier to share talent internally, and 26% plan to continue the practice in 2021.
Employers need to actively consider how jobs are changing, which job categories and employees are most affected in the short-, medium-, and long-term and create intentional career pathways and upskilling, reskilling for emerging jobs to keep talent employable. But to turn short term opportunities into a sustainable employment strategy, work needs to be done on creating a culture of learning and talent programs that support skill transfer and work mobility. Getting this right takes effort. Technology driven solutions and innovations including AI based systems will play a huge role for successful implementation.
Rethinking work standards is long overdue and makes business sense. Mercer’s findings show 75% of companies that have ESG metrics embedded into the CEO’s agenda report revenue growth rates of more than 6%. Further, individuals report that their top four (out of 10) preferences for organizations are: responsible rewards (including a living wage for all, fair pay, ethical wages in the supply chain and pay equity); employee well-being; a strong mission, values and purpose; and concern for the environment and social equity. This is the new work deal.
The reset calls for a collective intent and action among employers to ‘make good work’ a reality, enabled with technology.
The Forum, in collaboration with Mercer, has announced a new initiative "Partnership for New Work Standards" to drive these outcomes. The project encourages partner companies to leverage their individual and collective power towards building a healthy, resilient and equitable future of work.