A recession is looming, businesses and consumers are struggling with sky-high inflation. So it is no surprise that the economy is top of mind for business leaders, as identified by Protiviti and NC State University’s research.
Despite these economic challenges, Protiviti’s 11th annual executive perspective report (which surveyed 1,000 business leaders) found that people, talent and culture issues remain top of their agenda, not just for the next year but for the next decade.
The top risk for companies in both 2023 and 2032 was “organization’s succession challenges and ability to attract and retain top talent in a tightening talent market may limit ability to achieve operational targets”. All of this is compounded by skills gaps, particularly in the realm of digital.
According to Protiviti, companies see technology, particularly the metaverse, quantum computing and advanced artificial intelligence (AI), as bringing a mixture of opportunities and risks. Some of the risks link with skills gaps, but leaders are prioritizing reskilling and upskilling amid a challenging labor market.
“Looking back ten years ago, it’s remarkable how much technology has reshaped the workplace since then, and the pace of change will only accelerate in the next decade,” commented Carol Beaumier, a Protiviti senior managing director and global leader of the firm’s thought leadership program.
“Companies need to think about how their people will continue to adapt, learn and embrace these technologies. A long-term outlook helps companies focus on where to invest to be better prepared and more resilient beyond 2023.”
The future of work and labor costs
Protiviti’s research further found that another risk or challenge facing businesses is the future of work.
Businesses are grappling with “evolving approaches to managing hybrid and remote work environments and continued shifts in the nature of work”, as the report stated.
The differing expectations and demands from various segments of the workplace are a challenge for employers – but long-term companies are hoping this will calm down.
In addition, Protiviti found that companies are worried about rising labor costs, and the impact this will have on organizations’ profitability in 2023 and over the next ten years.
This situation has only worsened as the cost of living crisis, as well as inflation, has not stopped the ‘Great Resignation’ in its tracks.
Talking about the findings, Peter Richardson, managing director of Protiviti UK and global lead on the future of work, shares with UNLEASH: “So why is finding and keeping talent THE top risk both short and medium term?
“Our survey cites three key drivers: the future of work; rising labor costs; workplace evolution in the near term.
“Future of work is referenced in the context of AI, automation and other technology advances and the effort required to reskill and upskill people with technical skills.
“This is undoubtedly true. However, we also need to reskill and upskill our people and especially our leaders with soft skills, particularly in engagement, facilitation and communication in the new hybrid workplace.
“Getting this wrong will lead to significant attrition and an inability to recruit effectively.”
The solution: Make talent your customer
It is clear that reskilling and upskilling must be the priority in 2023 and over the next decade (and businesses are well aware of this fact), but what more must leaders do to ensure they are transforming talent management?
Fran Maxwell, global leader of workforce and organizational transformation at Protiviti, wrote in the report that employers must make talent their customer. “The organization’s focus on the customer experience should extend to its own people and talent. Many companies can slice and dice data to understand their customers, but fewer do this with regard to the talent in their enterprise”.
Protiviti managing director and co-author of the report, Jim DeLoach, added: “Employees are just as important as customers and should be treated as such in all decision-making in the coming months.
“Longer term, continued investment in succession planning, integrated upskilling and technology learning will help companies excel in employee engagement and broader corporate strategy, fulfilling the value proposition underpinning investments in new technologies and digital innovation.”
Employers and leaders who ignore this advice do so at their peril, concludes Richardson.
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