Companies need to shift focus from ‘hybrid work’ to ‘radical flexibility’

Profile picture for user catheverett By Cath Everett September 22, 2021 Audio mode
Summary:
Enabling ‘Radical flexibility’ and ‘holistic wellness’ are among the key trends employers will need to get on top of if they wish to attract and retain staff in the middle of a skills crisis, believes Gartner.

hybrid work concept with woman in home office © StockSnap - Pixabay
(© StockSnap - Pixabay)

The COVID-19 pandemic, as we all know, has had a transformational impact on the world of work in general, and on the life of knowledge workers in particular.  

In the UK, for example, it is estimated that the number of people who worked from home in 2020 has more than doubled to 25.9% from 12.4% the previous year, although the figures for essential workers, such as medical and retail personnel, remained fairly static, furlough aside, given the on-site nature of their employment.

Despite the widespread and growing popularity of more flexible ways of working however, John Mattox, Managing Consultant of Gartner TalentNeuron, told attendees at the market research and advisory firm's ReimagineHR conference last week, that job posts which mention working from home still account for a mere 7% of the total.

Of that 7%, around 39% consisted of fully remote positions, 35% were remote but linked to a satellite office and the rest were variations on a theme, such as working in collaboration with remote colleagues.

The importance of radical flexibility

Nonetheless, "radical flexibility" in whatever form it takes is one of five planks that Graham Waller, a Distinguished Vice President at Gartner, believes will be pivotal to an attractive employee value proposition (EVP) going forward.

According to 2,410 hybrid and remote knowledge workers who took part in the firm's recent Hybrid Work Employee Survey 2021, three quarters have seen their expectations around being able to work flexibly increase over recent times, with only 4% opting to be based on-site.

In fact, expectations are that if organizations insist on the reintroduction of pre-COVID ways of working, they could lose as much as 39% of their workforce - a sobering statistic at a time when keeping hold of critical skills and building the leadership pipeline are considered the top two talent issues among members of the C-suite.

Those roles most likely to jump ship if not provided with the flexibility they desire consist of quality control and assurance (69%), marketing and market research (67%) and IT and systems (66%).

As to what "radical flexibility" actually means though, Waller believes it is quite a different concept to hybrid working, which focuses on tackling only the ‘when' and ‘where' issues.

Taking a radical approach to flexibility, on the other hand, is about adopting a ‘choice with responsibility' model, such as that implemented by Swiss pharmaceutical giant Novartis. Including additional flexible working components, such as ‘with whom', ‘what' and ‘how much', the idea is that when employees are given autonomy over these matters, feelings of empowerment result, which in turn boosts business performance. As a result, Waller said:

We recommend moving from an office-centric work design to a human-centric approach, where individual and team requirements are the central pillar. Contrast that with hybrid working - when everyone in the organization works remotely on say Mondays and Thursdays, it may be hybrid but it's not human-centric, and how you bring that to life is via the employee value proposition.

Four other EVP-related considerations that can help attract and retain workers consist of:

1. Personal growth (so they feel valued) - The aim is to help employees grow as people, not just professionals - although activities, such as providing up-skilling, career development and progression opportunities, are vital too;

2. Holistic wellbeing (so they feel cared for) - Ensure that staff members actually use, rather than simply have access to, holistic wellbeing offerings;

3. Shared purpose (so they feel invested) - Don't just make statements about purpose but take collective action;

4. Deeper connections (so they feel understood) - Support employees in strengthening not just their work connections but their family and community relationships too.

Enabling holistic wellbeing

Alongside radical flexibility, one of the most important of these considerations, particularly in light of the impact of the pandemic on employee health and wellness, is enabling holistic wellbeing. According to Gartner's Workforce Resilience Employee Survey 2021 conducted among 3,690 employees around the world, 85% have experienced higher levels of burnout than in the past, with two out of five complaining of a poorer work-life balance.

But as Alex Pavel, a Director of Gartner's HR Advisory team, indicated, there is a significant price to pay in business performance terms for this situation. The firm's 2020 Well-Being Benchmarking Survey undertaken among 5,000 workers worldwide showed that poor wellness leads to a 10% drop in enterprise contribution, a 5.7% fall in engagement and a 2.8% reduction in intent to stay.

Although since the pandemic began, most employers have either introduced new, or expanded existing, wellness schemes, covering everything from mental and physical health to financial and community wellbeing, Pavel believes this kind of "responsive" approach will not be enough in the long-term. She explained:

They can have a positive impact up to a certain point, especially if there are minimum or no programmes in place, but you do reach a place of diminishing returns and no longer increasing employee wellness as you're treating the symptoms not the cause. If you don't address the issues that are driving the situation, you can't fully solve the problems.

As an initial measure, Pavel advocates boosting participation rates among existing programmes, which currently tend to be low: despite 96% of employers making mental health initiatives available, they are taken up by only one in five of staff. A similar situation is true in the case of physical (94% vs 33% uptake) and financial wellbeing offerings (85% vs 25% uptake).

But more fundamentally, Pavel also suggests adopting a "preventative" approach, which entails redesigning work and people processes with three key premises in mind:

  1. Radical flexibility (see above);
  2. Reducing work friction by identifying inefficient and ineffective processes and bottlenecks and soliciting feedback from employees to improve them;
  3. Encouraging empathetic management by providing managers with "clear guide rails" and coaching on what to say and do or not in order to support their team's mental and physical health.

The changing face of the HCM software sector

As for the technology that will underpin many of these shifts, meanwhile, the market here is starting to shift too. While the Human Capital Management (HCM) software sector has been characterized by reduced growth and tactical expenditure since the pandemic struck, it is expected to regain double-digit growth rates during 2022, hitting $21 billion worldwide as digital transformation activities in areas, such as onboarding and virtual learning, take off.

In fact, by 2024, the market is anticipated to return to pre-COVID spending levels, valuing it at about $26.2 billion and rising to $29.2 billion in 2025.

While 62% of the sector is currently controlled by four key players - SAP (19%), Workday (17%), UKG (14%) and Oracle (12%) - the fact that it is still a buyers' market will likely lead to margin pressure and consolidation among small vendors over the next few years, believes John Kostoulas, Vice President Analyst in Gartner's Technology and Service Provider research team. Areas particularly vulnerable to this kind of activity include talent acquisition and management as well as learning and development.

As to the top 10 HCM technologies expected to deliver immediate business impact over the next couple of years, these comprise:

1. Voice of the employee - By 2023, four out of five enterprises with more than 2,500 staff will supplement annual engagement surveys with pulse, focus group or indirect methods in order to understand employee sentiment more accurately;

2. Continuous performance management - By 2022, more than 30% of organizations will drop one-size-fits-all performance management approaches, preferring instead to tailor support to the objectives of individual business functions;

3. Onboarding -  By 2023, a quarter of large, complex businesses will have a process owner in place to manage onboarding activities for both in-house and contingent workers;

4. Talent analytics and workforce planning - By 2023, 25% of large enterprises will change their workforce planning processes continually rather than periodically;

5. Continuous learning - By 2022, digital business transformation will make it necessary to revisit or reprioritize nearly 80% of organizational skills;

6. Diversity, equity & inclusion - By 2022, more than three quarters of large companies will specify conformance to specific D&I criteria when selecting HCM systems;

7. Next generation workforce management - By 2025, 45% of big enterprises with hourly paid workers and variable labour demand will use automated systems for workforce scheduling;

8. Internal talent marketplaces - By 2023, 15% of large global businesses will integrate multiple sources of data to improve AI-based talent matching when undertaking large scale staff deployments using internal marketplaces;

9. Continuous recognition and rewards - By 2023, most HCM suites will offer some continual recognition functionality, although more than four out of five employers will still use separate dedicated systems;

10. Flexible earned wage access - By 2023, one in five US enterprises with a workforce that is mostly paid on an hourly basis - compared with 10% elsewhere - will implement systems enabling employees to access their earned wages on a flexible basis in order to improve engagement, experience and retention.