ABOUT SLANT Everyone has their own slant, yet we can all use expert insights. SLANT brings selected views and opinions from our brightest minds. Diverse perspectives across a single theme, designed to provoke thought and inspire action. So head inside for a new view on business and society today. Your views are important to us. If you have comments or questions regarding anything on this website, email the editor, Simon Griffiths. Simon.Griffiths@KPMG.co.uk
We'd like to introduce our editors and authors. These are the people who’ve contributed their expert views and opinions to SLANT. SIMON GRIFFITHS EDITOR, SLANTSimon is a firm believer in the value that opinion-based, thought-provoking content can generate for a people business such as KPMG. He has spent much of his 15-year career in media relations and corporate communications coaxing viewpoints from the firm’s subject matter experts on the business issues of today and in the future. Needless to say, he is delighted about the launch of SLANT to showcase these. CONNECT+44 121 2323760 email@example.com JAYNE VAUGHAN EDITOR, FUTURE OF WORKPARTNER, KPMG IN THE UK Jayne is a partner in the firm’s People Services, Employer Consulting and Compliance division. She specialises in employee remuneration and has expertise in the tax implications of the whole reward package, including pension planning, employee discounts and flexible working. Outside work, she enjoys sport, traveling to new places and a good book.CONNECT+44 20 76941381 firstname.lastname@example.org DAVID FAIRS PARTNER, KPMG IN THE UKA respected commentator on UK pensions, David is a partner in KPMG’s Pensions team. In that role he has advised on pension strategy and design for public sector clients such as the NHS, Foreign Office and Jersey along with the likes of Lloyds Bank, IBM, Vodafone and Centrica in the private sector. Passionate about his subject, David is a member of numerous industry bodies, including a working group set up by the government to restore confidence in workplace pensions.CONNECT+44 20 73113103 email@example.com ROBERT BOLTON PARTNER, KPMG IN THE UKRobert is lead partner of KPMG’s global HR Transformation Centre of Excellence, a strategic investment for the firm aimed at bringing world-class HR solutions to companies around the world. As former head of HR at the Nationwide Building Society he won the Management Consultancies Association HR Consultant of the Year award in 2011. This was for the work he did transforming the HR model at Telefonica O2.CONNECT+44 20 73118347 firstname.lastname@example.org KATE HOLT HR DIRECTOR, KPMG IN THE UKAfter years climbing the ranks in KPMG’s people function, Kate’s role changed in May from internal to client-facing. Having joined KPMG almost at the beginning of her career, Kate became Chief Operating Officer of the People function in April 2010, responsible for implementing the partnership’s HR strategy. Clients will now benefit from her expertise and insights in effective workforce management.CONNECT+44 121 335 2709 email@example.com CASSANDRA HANCOCK ANALYST, KPMG IN THE UKCassandra joined KPMG Management Consulting in 2009 as a graduate, one of the few who secured jobs in post-apocalyptic, recession-hit UK. She is an advisor in Financial Management, specialising in public sector projects.CONNECT+44 20 73116658 firstname.lastname@example.org ROB HORTOPP DIRECTOR, KPMG IN THE UKA maverick thinker on the workplace of the future, Rob, is a director in Management Consulting. In this role, he’s spent 15 years advising companies worldwide on how to get the most from their finance and back office functions. It might have something to do with all the fresh air he gets from running along the Thames and biking in the Chilterns.CONNECT+44 20 7311 5806 email@example.com MARK WILLIAMSON PARTNER, KPMG IN THE UKHow do you keep a workforce of thousands committed, productive and engaged in today’s turbulent times? Mark might know. After all, he has specialised in HR optimisation, service delivery and performance for 25 years. A KPMG partner, he currently leads the UK and European People and Change practice, with a focus on managing the people aspects associated with transformational change.CONNECT+44 207 311 8693 firstname.lastname@example.org
CENTRAL TO THE FUTURE OF BUSINESS IS THE HUMAN QUESTION, SO THIS EDITION LOOKS AT TOMORROW'S WORKPLACE. DAVID FAIRS PARTNER, KPMG IN THE UKAs the pay gap between the talented few and the rest continues to grow, David Fairs examines the consequences in LIVING WITH UNEQUAL REWARD ROBERT BOLTON PARTNER, KPMG IN THE UKMeanwhile, Robert Bolton argues in UNLEASHING THE TALENT WITHIN that organisations should concentrate on developing their entire talent base, not just the C-Suite KATE HOLT HR DIRECTOR, KPMG IN THE UKFor some people, pay isn’t everything. So what else will tomorrow’s employees want? Kate Holt has a suggestion in BEYOND THE PAY CHEQUE - the new key to employee engagement. CASSANDRA HANCOCK ANALYST, KPMG IN THE UKWhile Cassandra Hancock believes that Generation Z will demand nothing short of complete control in LETTING GO TO GROW. ROB HORTOPP DIRECTOR, KPMG IN THE UKLooking beyond the immediate future, we foresee a dearth of both talent and capital. We then predict an intriguing new solution to both shortages in DOES CAPITAL HAVE A HUMAN FUTURE? MARK WILLIAMSON PARTNER, KPMG IN THE UKFinally, in the first of a regular series, BY THE NUMBERS, we take a statistical look at the future of work.
DAVID FAIRS PARTNER, KPMG IN THE UK THREE IMPORTANT NEW TRENDS ALL POINT THE SAME WAY. Like many people my age I entered the work market with an ingrained belief that hard work brought rewards, which in turn brought status. My generation was brought up to work harder, longer, faster and to aspire constantly to climb the next rung on the ladder.However, more recent entrants to the workforce are questioning whether it’s really worth the effort to strive for more than ‘enough’. And this is just the first of three trends which could lead to a future workforce characterised, at least in developed markets, by an unprecedented inequality in the distribution of reward. The second trend relates to the first because winning the commitment of this new, less reward-focused generation will require a class of leadership capable of inspiring them and this will, in itself, bring rich rewards. The third trend relates to the rest of the workforce and will involve the continued automation of the unskilled job pool. When money isn't enough. There will always be individuals who are prepared to toil long and hard providing the rewards are suitably above and beyond the mean. However, an increasingly large proportion of the workforce has little interest in the idea of additional reward beyond what they need to sustain their lifestyle. These people care about work/life balance and are prepared to adjust their salary expectations accordingly. Unlike my generation, they do not equate salary to personal worth and they definitely don’t believe that entering the upper reaches of the salary league table is a goal worth striving for. However, what members of older generations may perceive, disparagingly, as a lack of ambition may actually indicate that their priorities are elsewhere and that they are just fine where they are. And if they have talent, employers will still be keen to get them on the payroll.AN INCREASINGLY LARGE PROPORTION OF THE WORKFORCE HAS LITTLE INTEREST IN THE IDEA OF ADDITIONAL REWARD BEYOND WHAT THEY NEED TO SUSTAIN THEIR LIFESTYLE.The workforce of the future will look very different to now I believe tomorrow’s organisations will become increasingly dispersed with fewer core employees but a larger overall workforce, supplemented by virtual, networked employees. You can see the first signs of this already in the more cerebral industry sectors such as IT or business services. Others will follow in time, though heavy manufacturing, which still requires manual, shop floor intervention, may be among the last to adopt such a structure. I should mention here that the so called war for talent will be all about recruiting the best, skilled workers. By comparison, the future for unskilled labour does not look encouraging. And even some traditionally white collar professions could look bleak for those who fail to keep their skills updated.58 Percent of Generation Y are content to earn 'enough', versus 48% of Baby Boomers. Source: World of Work Onepoll surweyREAD MOREA new breed of manager The challenge of maintaining a networked workforce will be significant – especially when a large part of the talent pool cannot be swayed by the offer of more money. This should herald the emergence of a new breed of senior leader who recognises that corporate charisma is as important as a smart business idea. They will paint a picture of their company’s vision, values and purpose that is compelling enough to inspire the newer generations of workers. This new type of leader is not too common right now, but in the near future, those individuals with the ability to enthuse and attract the best talent will reap phenomenal rewards. Of course, the job of constantly painting an attractive, values-driven picture will be no mean feat. It will also be at the mercy of external, societal factors. What makes a company’s ethos attractive can change fairly quickly - flavour of the month can easily become millstone around the neck two years later. Also, the moment one of these super-talented individuals leaves, they’ll probably take all the charisma with them. This rather validates the growing popularity of pop-up organisations which are better suited to the vagaries of shifting public sentiment.A newly divided working world. The rewards for those organisations that navigate these shifting sands will be considerable. The super charismatic leaders of these companies will certainly benefit, along with other members of the nano-corporate core and a select few in their wider networks. However, the contrast between this richly remunerated elite and the growing battalions of ‘enough reward’ workers strongly points towards a more unequal distribution of income. This will be further exacerbated by growing numbers of individuals who risk being locked out of the workforce altogether. The automation of unskilled labour is clearly the major factor here. As the battle for talent rages ever fiercer at the top end of the skilled labour market, we will see an increasingly large swathe of the population with neither the skills nor the talent to compete – or even to be of interest - to most employers. This could lead to social tensions. Then again, the shifting moral compass of the ‘enough reward’ camp may force those with money to assist those without. Pressure could be brought to bear (as we’re seeing in the banking sector now) to define an acceptable level of reward and give anything above that to those less fortunate. I suppose it could happen, but even with pay moderated to some degree, I expect to see a widening of the gap between the haves and the have-nots in the not-too-distant future.
ROBERT BOLTON PARTNER, KPMG IN THE UK WE FOCUS TOO MUCH ON LEADERS, NOT ENOUGH ON THE WORKFORCE AS A WHOLE 'Talent management’ strategies have focused far too much on so called high potential and senior leaders rather than creating a talent system within organisations as a whole. This is borne out by recent studies showing that talent management is the leading concern for CEOs.In the workforce of the future there’ll be no such thing as talented individuals. Instead we'll talk about talented organisations and talent ecosystems. Many CEOs already believe that the secret to creating a successful organisation lies in getting the best from employees. However prevailing people management practices do not meet the demands of today’s knowledge-based economies. Closer inspection reveals that they are alarmingly detached from the business environment within which it is hoped employees and organisations can thrive. My observation is that we have an irrational preoccupation with the role of the individual (certain individuals in particular) at the expense of the wider workforce. Current human resource tools – performance management, reward and recognition structures, organisational culture, leadership role modelling and information flows – need to be configured in a far more sophisticated way to deliver a talented workforce.Enlightened people management Executed well, I foresee organisations recognising their responsibility to tailor an individual relationship with every employee. This is a ‘must have’ rather than a ‘nice-to-have’ because the rules have changed. If employees are expected to have a greater commitment to the ambitions of the business and are required to innovate, think independently and interpret and respond to corporate strategy, then they need to be managed and motivated differently. For example, why are archaic rituals such as the annual performance appraisal still standard practice? And why should policies such as highly geared bonus schemes survive? Evidence strongly suggests that there are far more responsible and valuable alternative approaches. What’s more the technology already exists to support them. Most importantly, creating talented workforces means creating the right culture. I’m talking about an ecosystem that empowers employees to work collaboratively and generates successful leadership in every part of the business.The so called “war for talent” is a fool’s errand. It was founded on the myth of the individual, yet evidence (again) shows that the ability of any individual to make an impact on the wider enterprise is limited. Indeed, the average tenure of a chief executive currently stands under two years, due in part to the selfsame unrealistic expectations. In reality, the impact that a high performing individual can have on the success of any organisation when compared to a high performing workforce is so insignificant as to be almost irrelevant.The war for talent also fosters competition between employees This can be divisive and the evidence (yet again) has shown that it’s not conducive to creating a sustainably successful organisation. Common sense alone suggests that intense competition is unlikely to drive collaborative working. As you’ll gather from my numerous references to ‘evidence’, I believe HR functions rarely make evidence-based policies and decisions. If they did they would have to radically change how they operate. A consequence of this failure to underpin strategy with evidence is the vulnerability HR demonstrates in pandering to the preferences and preconceptions of the c-suite. This cannot be right for any business now or in the future. It leads to discredited people management approaches that stay on long past their sell-by date.
KATE HOLT HR DIRECTOR, KPMG IN THE UK WHAT WILL IT TAKE TO INSPIRE TOMORROW'S WORKFORCE? The workforce of the future is likely to be more fragmented than today. I foresee a smaller core workforce, supplemented by seasonal, contract, temporary and freelance employees on a project basis. I also believe tomorrow’s employees will be choosier about who they work for and will be more proactive in seeking a good work-life balance.Financial reward may not be their only, or even their most important, consideration. The idea of the 'portfolio career' will be a reality as employees move around organisations with greater frequency, continually seeking to enhance the core skills that make them employable. Further fragmentation could result from the massive generational stretch that will characterise most future workforces. A five generation span could be a reality in the near future.So how will employers manage such a transient, disparate and diverse workforce? We are already seeing a decrease in employee engagement. In addition, the scale of financial reward (above a certain level) no longer seems as important to the typical employee as it was previously. As a result, the employer of the future may need to be more imaginative in how they attract those highly skilled and in demand employees. If the promise of personal reward no longer delivers employee 'stickiness' what will take its place in the future?I believe tomorrow’s employees will seek organisations with a sense of 'purpose.' In assessing a potential employer, their decision-making will be heavily influenced by how worthy a purpose that employer espouses – and how well it is communicated. By purpose, I mean something beyond mere corporate strategy and values; something which clarifies why an organisation exists and what its legacy will be. This definition of purpose should demonstrate integrity and sustainability and should be flexible enough to feel personal to a broad spectrum of people across different cultures and generations. Increasingly, I predict that people will actively seek out employers whose beliefs match their own. For these people, more money will not bring increased engagement. Instead, factors such as morality, ethics and community impact will be increasingly important. These will dictate whether tomorrow’s employees can feel proud of the organisation they work for. Conversely, if an employer’s purpose is insufficiently compelling, employees will likely vote with their feet.55 A potential employer's CSR record matters to 55% of Generation Y, but only 45% of Generation X. Source: World of Work Onepoll surweyREAD MORETHE IDEA OF THE 'PORTFOLIO CAREER' WILL BE A REALITY AS EMPLOYEES MOVE AROUND ORGANISATIONS WITH GREATER FREQUENCY, CONTINUALLY SEEKING TO ENHANCE THE CORE SKILLS THAT MAKE THEM EMPLOYABLE.So how does purpose look in practice? Herein lies the first challenge. Currently, most businesses looking to clarify their purpose are content simply to regurgitate corporate strategy and values. Typically this boils down to little more than a story around projected growth. A great deal extra will be required of tomorrow’s organisations if they are to differentiate themselves from their competitors. Of course, none of this matters if you don’t agree that future employees will be swayed by emotion and you think all that will matter to them is financial reward. Personally, I believe that’s a dangerous view. Generation Y will be the key. The oldest of them is now 33 so they’re well ensconced within the workforce. They have known recession – and felt it quite keenly - and they no longer believe in (or expect) a job for life. They are the game-changing generation who will challenge employers about their purpose and expect to see evidence of emotional ‘draw’.Determining the type of purpose that can attract tomorrow’s workers won’t be easy. It’s no wonder so many organisations put it on the back burner. Some recognise its importance but too many still think that a combination of their current strategy and future vision should be compelling enough. Whatever purpose businesses do eventually come up with, its communication will be key. Future workforces could potentially stretch across five generations so how do you explain it in a way that resonates across all those demographics? The trick will be to make the story as simple as possible so individual employees can retell it their own way. Currently too much internal communication, instead of empowering employees with relevant corporate messages, leaves them confused and unsure of their role within the organisation.In a future workforce where emotion and feeling is given more of a free rein, declarations of purpose must not fall into that trap. Employers may understand how the connection between purpose and strategy works but they cannot expect future employees to see it the same way. Employees who can’t articulate their employer’s purpose to others won’t stick around for long. Making this change will be hugely challenging and may not sit comfortably with hard-nosed corporate ideology. However, I believe that a sense of purpose will soon be the key differentiator when it comes to attracting both employees and customers. It’s a challenge that must be faced sooner rather than later.
CASSANDRA HANCOCK ANALYST, KPMG IN THE UK GEN Z HAVE A LOT TO OFFER TOMORROW’S WORKPLACE. THEY’LL ALSO DEMAND MORE. A new generation of workers is set to demand full and equal voting rights in “their” companies - the businesses they both work for and invest in. This trend could eliminate the management power structures we know today. Real power will reside wherever management truly lets go.The 21st century will see the fight for equal rights take its most daring and revolutionary turn yet - this time in the workplace. And it all revolves around Generation Z. To the highest bidding CFOs they will bring astounding analytical minds, instant global networks and the kind of fresh foresight that companies will crave for and invest in.BETTER EDUCATED, MORE TRAVELLED AND FAR MORE TECHNOLOGICALLY ADEPT THAN THEIR PREDECESSORS, GEN Z WILL BURST INTO EMPLOYMENT WITH A SWAGGER AND CONFIDENCE FAR BEYOND THEIR PHYSICAL AGE.Gen Z's Price They will not tolerate the traditional restraints imposed by the conventions of capitalism as we practice it today. I believe that Gen Z’s entry into the workplace will eradicate conventional management authority and hierarchy. While not financially owning the business, Gen Z will demonstrate a new sense of loyalty to and ownership of their company. This will push them to demand the legal equal voting rights needed to set all future strategy targets and policies. As employees they will choose for themselves where they work, who they work with and what they do. There will be no closed doors, no private meetings or hidden agendas. Management information will be 100% transparent to all voting right employees. Decisions will no longer be made by elite cliques of detached directors. Instead, energetic round table debates among knowledgeable employees will be followed by democratic voting to set all future strategy, targets and policies. Gen Z will balance local on-the-job knowledge with a sharp understanding of the wider business world. In this way they will lead their companies to success.So, what’s to become of our redundant board and abandoned CFO? Most likely "the" CFO will not exist. All GenZ staff will fully participate in a new, multi-faceted CFO role. The responsibilities will be firmly embedded in the hearts and minds of all GenZ employees. Not only will they balance their own budgets - they’ll personally seek to identify, address and improve the cost drivers pushing their companies’ profit margins. They’ll know when to slash and when to stretch forecasts. They’ll be able to predict their competitors’ movements in the market and will know how to respond. The CFO will exist, but it won’t be a single person. Instead this function will live within the intellect, enthusiasm and responsibilities of individual GenZ employees and in their hunger for their companies to succeed.31 Percentage of Gen Z believe future employees will challenge their organisation's purpose as against 24% of Gen Y and 12% of Baby Boomers. Source: World of Work Onepoll surweyREAD MOREWhat will drive Gen Z to achieve all this? Not just money. Born during today’s devastating economic crash they will grow up learning the lessons of previous overspending and overlending. They will be driven instead by a sense of individual responsibility for their companies’ actions. Their companies’ success will be their own success.‘Staff empowerment’ will be no emptystrap-line. I believe that today’s CFOs will allow Gen Zers to grow in to an army of mini CFOs who will revolutionise traditional capitalist models, re-defining our century as the one of genuinely empowered employees. If you found this article interesting then you may wish to read the longer, more detailed study on which it was based.
ROB HORTOPP DIRECTOR, KPMG IN THE UK COULD 'TALENT FUTURES' CREATE A NEW, FAIRER FUTURE FOR CAPITALISM? If capitalism is to survive as a force in society, it must satisfy a growing public demand for rewards to more accurately reflect individual performance. One intriguing idea is the concept of 'return on employee capital' where individuals trade on their potential future earnings.By 2035 a number of issues affecting work and business could come to a head. In particular, can the shareholder return-based model on which western capitalism is based even survive? After all, there are already signs of disquiet, particularly in societies riven with instability following economic crises. Meanwhile, those traditional multinational corporations that survive further rounds of consolidation would continue to drive efficiencies. Their next target could be costly, non-value adding intermediaries such as pension funds and investment banks. By directly offering stakes in their own equity and commodity reserves they could become the new world powers for the 'responsible' brokering of funding.A NEW MARKET FOR 'TALENT-FUTURES' WOULD ALLOW YOUNG, TALENTED INDIVIDUALS TO TRADE THEIR LIFETIME EARNING POTENTIAL YEARS BEFORE ANY RETURN ON IT IS REALISED.The battle for capital could then take an intriguing turn. Today’s so called war for talent might, by 2035, have escalated into a truly global conflict, especially with traditional geographic boundaries breaking down still further. Businesses everywhere will be fighting over those talented individuals, communities and societies with the potential to create the most valuable ideas and innovations. A new market could open up for 'talent-futures'. These innovative instruments would enable young, talented individuals to trade their lifetime earning potential years before realisiing much return on it.The 'return on employee' capital model would transform every business's value chain. CFOs will need a new combination of talent, innovation, investment and capital management skills. Only then could they deliver the returns expected by the employees and societies with which they co-operate. Viewing the combined scarcity of capital and talent as an opportunity, by 2035 traditional banks could well lock into battle with the new mega corporates for ownership of this new asset class. The leading universities could also get in on the act, teaming up to create a unified rating standard that would convert academic achievements into investment grades. The outcome would be a completely transformed relationship between the work people do and its value to the corporations that profit from it. Employees could potentially reap the full benefit of their professional achievements. 'Power to the people', if you like, but not quite the way Karl Marx had in mind. If you found this article interesting then you may wish to read the longer, more detailed study on which it was based.
CAN GENERATION Z AND THE BABY BOOMERS WORK TOGETHER?