Workplace transformation and the next generation employee underpins future success
It is fair to say that technology is shaping and transforming every aspect of our lives, including the working environment. Cultural shifts are evident in the way people now interact through their reliance on technology in their day-to-day lives, and meeting the rapidly changing and increasing demands of technology is challenging for any organisation. Organisations are also increasingly seeing how the power of technology can help them make the workplace a more effective and optimised environment. In future, organisations will need to update their employee skill-set in order to service a rapidly evolving set of client offerings. Generational changes in attitudes are also challenging some of the established incentivisation structures historically used in professional services.
Building on our theme around the client of the future as summarised in my previous article, throughout September we will be examining the characteristics of the next generation employee, their expected approach to the working world and the corresponding requirements. We will be evaluating the changing shape of the working environment, the impact this is having on the business, its infrastructure and the workforce, whilst along the way examining the disruption and transformation needed across the organisation, strategically, culturally and technically. We will be asking what the next generation employee looks like in your industry and how we solve the problem of workplace transformation when the next generation employee potentially no longer identifies with the historical motivations such as striving for partnership. If you would like to share your perspective please contact email@example.com as we are keen to feature all viewpoints. We are particularly interested to hear about both the differences and the commonality across each of the accounting, law, property, consulting and in-house sectors so that people can learn from wider perspectives, which after all is the whole idea behind Alternative Insights! At the end of the month I will then seek to draw together the differing perspectives and identify some key themes along with suggested actions.
In order to provoke some thought I wanted to share some perspectives I have heard previously at some of the Alternative events and which I have previously written about across a number of articles. Perhaps the biggest challenge to my mind is the changing perspective on aspirations of the next generation moving into the workforce and the way in which this will impact the historic professional services models. One of the recent panel sessions that struck me the most was at the recent Tech & Innovation Professional Services leaders summit as I wrote about in my previous article. As I said following the event, what was genuinely interesting was hearing from the next generation of innovators, the trainees and associates across the different firms. It was here that I saw the genuine challenge to the partnership structure in how to retain talent to drive innovation. This generation that has so much to offer, the so-called “digital natives”, pretty much all said that partnership wasn’t necessarily something they aspired to. For me, this was the big takeaway; that this generation, that will drive so much of the innovation, has a different value set and will perhaps cause more positive disruption for professional services operating models than any particular technology.
It is the change in perspectives underpinned by differing value sets which has the potential to create such change at a time when we have four generations in the workplace for the first time. This can be seen as a challenge for professional services firms in how they adapt the traditional pyramid-based structure, but it is also the case that the same changes in demographics are occurring in their clients. This creates real opportunity for firms that are willing to effectively empower the new generation in working more closely with clients at an earlier stage and exploring how technology can be used to transform the client service and deliver better outcomes. As talked about during last month’s focus on the “client of the future”, clients’ needs are transitioning to a technology-enabled, data-driven, productised, outcomes-based, collaborative model. The next generation of employee or “digital natives” will be the same demographic of people as the client actively driving this change forwards. Breaking down the often formal hierarchies that still exist for many firms has the potential to drive better engagement for employees and clients simultaneously.
However, this transformation for many firms will not be an easy one given the partnership model is largely based on the core principle of people wanting to make partner. In the panel session I referenced earlier, across law and accounting firms, three of the four panellists said they did not aspire to partnership, and the one that did was only because of a belief that the firm was now serious about adoption of technology in innovative ways for clients. As an aside all four later felt at some point they might want to start their own business. Perhaps this shift towards entrepreneurship being seen as more interesting than the traditional professional services career progression is a key element for firms to explore further the way in which they evolve their cultures and incentivisation models.
Other aspects for consideration as firms seek to transform to better meet client needs will be driven by the outcomes clients are seeking. As talked about in earlier articles, the drive towards productisation and the increased use of data will have a key bearing on this topic. This change in focus towards greater use of technology will bring with it a meaningful shift in the skills needed in the workplace. At the recent Tech & Innovation Professional Services leaders summit we asked around 100 leaders across professional services what they saw as the most important skills and competencies that will be needed over the next five years. Some interesting statistics from that survey were as follows (people scored from 1-5 and I have taken 4 and 5 combined as “important” in the percentages listed below);
- 98% felt that the ability to adapt to constant change will be important;
- 81% felt that wider business advisory skills will be important;
- 77% felt that business and project management skills will be important;
- 71% felt that product strategy and development skills will be important;
- 71% felt that data science skills will be important;
Part of attracting employees will be the workplace, not just the culture but the very environment that they work in. This will particularly be the case where new disciplines are needed such as data science and product management, as professional services firms will be competing with a wider and arguably more dynamic pool of organisations. Given some of the insight I mentioned above where the new generation of employee sees entrepreneurship as exciting, how will services firms attract talented product managers for example rather than have them see tech businesses as more attractive? Perhaps it is possible for firms to achieve this shift. At the recent Alternative Events Accounting event for example it was fascinating to hear from Cooper Parry, a mid-tier accounting firm, around the way in which they have driven the fundamental shift in the culture of the firm, and I have to say the office space looked more like a start-up than an accounting firm. Any firm that is trialling sleep pods, has a drive-in movie theatre, a running track, and things like email curfews (between 7pm and 7am) and limitless holidays is going to attract a younger, more tech-focused workforce! You can read more about how accounting firms are transitioning in the earlier article.
The transformation of workplace expectations is having a real effect on the property sector, or is it the other way around perhaps? Presentations from organisations like Knight Frank and We Work at the recent summit illustrated the changing impact on landlords and tenants. It was fascinating for example to listen to the We Work growth story and the rapid growth they have seen over recent years across the “enterprise” membership with large organisations seeing the benefits of flexible, collaborative, tech-enabled space (out of interest they said they now have space in 28 countries, 105 cities, 485 locations, 466,000 members, and enterprise is 40% of their business). What was also interesting was the way they are using the data they are constantly gathering on how the space is used to keep evolving the service. For me this was a great illustration on not just the expectations and impact of technology from an employee perspective but also how the employer can effectively use technology and data to continue making the environment better. The better the environment the happier the employee and the productivity will follow as will the staff attraction and retention rates – at least that’s the theory. It will be interesting to hear from different sectors around how they are approaching physical workplace transformation and the role of technology in doing so.
While the physical workplace is a key part in how organisations are transforming, so too are the systems and technologies that employees are provided with. It will be interesting to hear from organisations in how they are driving greater use of technology to make employees’ lives easier. The workplace is more virtual than it has ever been but many organisations have internal legacy systems that are perhaps a little on the dated side. As more and more digital natives enter the workforce they have a certain expectation of what it will be like to “start work”. Many though are quite surprised when they get into the workplace to discover just how bureaucratic many of the processes and systems are. The positive news is that when surveyed this same group of 100 innovation leaders said 72% of innovation tech spend was currently on making internal processes more efficient. Customer experience has been such a focus for many consumer-focused organisations that they really have raised the bar for businesses when those same “consumers” transition to being “employees”. Perhaps there is something in the idea of thinking of employees as consumers who have the ability to leave at any time and tell their whole network exactly what they think, rather than perhaps a more antiquated view of what it meant to be an employee.
A real challenge therefore for professional services firms as they seek to transform will be if they portray themselves as more innovative than they are. As I wrote about recently in an article, if firms place too much narrative around innovation without meaningful outcomes then they risk not just client impacts but also employee retention issues. This will result from what I see as an “authenticity” challenge if many firms continue to have a disconnect between their stated goals and their actions. In the article I talk about the challenges around goal misalignment and gaps in client collaboration, culture, investment and skills. In a related article discussing some recent innovation benchmarking a challenge that stood out for me was that 79% of firms say they have a culture that encourages the sharing of ideas, but 86% say that staff are too busy to spend time on innovation! This illustrates in part the challenge for firms, in that many employees want to be part of something innovative and dynamic, but firms will have to proactively enable this through their actions to retain these individuals and to attract the future new roles they will need.
My intention in this article was not to conclude but rather to stimulate some thinking and to reference some of what I have heard and written about previously. What we really want across the month is to hear from all sectors on your thoughts. My encouragement would be to share your unique perspective and even dare I say create some challenges for others. While it takes time, writing leads to so many interesting conversations and opportunities, not to mention the positive brand recognition for you and your organisation. If you would like to share your perspective please contact firstname.lastname@example.org.