The Road Ahead: Thinking Through 2022
“Disruptive” has, in the wake of tech-speak’s infiltration of our everyday speech, taken on a positive connotation: industry “disruptors” are shaking things up in creative, future-oriented, and highly profitable ways. It has not, however, lost its older, negative, connotation: the pandemic has been broadly disruptive at every level of everyone’s life. As a talent advisory firm, ZRG is particularly concerned with how work has been disrupted by the past two years. What changes are going to stick around, and what will be the bedrock of the next “normal”?
Hybrid Work
Hybrid work and work-from-home (WFH) have become standard for office-based work that can feasibly be completed remotely. We do not expect that this will change substantially in the future, although there are new challenges that arise from these arrangements. Communication is key to designing a hybrid workspace that leads to success. Work culture in a hybrid/WFH future will not look like it did when most employees reported to a common office space. Leaders will need to think about how to manage behaviors, expectations, systems, and symbols in future hybrid/WFH environments.
This changed work environment is not spread universally across all industries. Manufacturing is still an in-person task, whether it’s automotive manufacturing or the manufacture of mRNA vaccines. Management may be able to adopt a hybrid work schedule, and new technologies will play a major role in whether and how manufacturing can become a hybrid workspace. A major US producer of consumer food and beverage has been able to adopt augmented reality solutions to allow workers in the US and engineers in Europe to look at the same piece of equipment together in real-time in order to diagnose malfunctions and produce a solution. Prior to travel restrictions, this would have meant flying the engineer across the Atlantic to see the equipment in question; today, it means having two people log into a meeting across that same distance.
Video conferencing has become a keystone to the current normal in many businesses. Zoom alone has seen revenue growth of over 1,500% since Q1 of 2018. Companies that want to remain innovative and retain the best talent, however, will need to look beyond just the choice among video conferencing software options.
Getting this balance right is clearly on the minds of many leaders, as Harvard Business Review has served over 3.5 million reads of articles on hybrid/WFH concerns. Whether employees can set their own WFH schedule is incredibly important not only to managing internal work culture but also to workplace diversity. The latter concern has led Nicholas Bloom of Stanford University to advise against letting employees select their own WFH schedules. His two main reasons against what would seem to be an employee-friendly option are workplace culture and workplace diversity. We’ll be discussing this complexity along with the problem of equity in industries where some work must be done on-site (e.g., manufacturing or biotechnology) in a coming episode of our podcast Culture Conversations.
DEI
Diversity, equity, and inclusion continue to be incredibly important to any company’s success. Our Global Life Sciences Practice Leaders, Robin Toft and David Fortier, find that DEI is one of the key challenges to the life sciences and biotech industries in 2022. While it is true that the pandemic hit all of us, it did not hit all of us in the same way or with the same force. It did not cause workforce inequalities, but it did serve to exacerbate and highlight those that already exist. Our Chief DEI Officer and President of TurnkeyZRG, Zing Shaw, recently led a webinar discussing how to successfully integrate DEI strategies to create not only a single company but a workforce that better represents diversity. Kelly Lewis, VP and People, Culture, and Inclusion Lead of TurnkeyZRG recently examined the ways in which executive recruiters affect the employment prospects of Black applicants.
From April 2020—when shutdowns, lockdowns, and pandemic-related disruption began—through January 2022, the aggregate average unemployment rate in the United States sits at 7%, per the Bureau of Labor Statistics. That aggregate peaked in the first month, April 2020, at 14.7% and has fallen steadily to 4% in January 2022. Only the first six months sat at higher-than-average rates of unemployment.
When we look into the data more deeply, however, we can immediately see that even with an incredibly blunt analytical instrument like the national civilian unemployment rate, this pain was not felt equally. The unemployment rate for White workers in this time period has never been above the aggregate average, peaking at 14.1% in April 2020 and ending at 3.4% in January 2022. Unemployment among White workers has not been at or above the current national average of 7% since September 2020.
This trend is not mirrored among Black or Hispanic/Latine workers. Black workers’ unemployment rate shot to 16.6% in April, eclipsed only by the Hispanic/Latine rate of 18.8%. While it took White workers 6 months to return to a sub-7% rate, Hispanic/Latine workers took until July 2021—15 months—to return to that rate, and Black workers only arrived at the same unemployment level in January 2022.
Addressing these gaps is going to be difficult yet incredibly important to do as companies seek to represent greater diversity at all levels of employment. We have seen a great increase in companies who wish to diversify at the C-suite level among our clients but addressing the overall employment opportunity gap cannot happen only through executive moves. It is no single company’s task to fix this issue, nor is it within the power of any single company to do so. This will require honest, and sometimes difficult, discussions around company culture, recruitment practices, and promotion policies.
In our DEI Benchmark Survey conducted last year, we found that 80% of technology companies had development programs specifically targeted at diverse workers with high potential for advancement. The same survey found that consumer-focused companies had these programs at a rate of 71% and life sciences companies at 50%. These programs are going to be the minimum commitment going forward to address racial and ethnic opportunity gaps. Companies who wish to be serious innovators in this area need to start thinking beyond the existing workforce and start thinking about how to develop a talent pipeline that begins in college or even high school.
ESG
Like DEI concerns, environmental, social, and governance issues (ESG) were once grouped under the rubric of Corporate Social Responsibility. Between shareholder pressure and the general social climate, there has been plenty of reason to bring these issues out from under one vague organizational principle and into their own areas of concern. Focusing on sustainable business practices, like focusing on the diversity of the workforce, is rightly being considered at levels ranging from SVP to the C-suite.
Just as different industries have different impacts on the environment and on society, they will have different responses to ESG issues.
When we spoke with Luciano Rodembusch of Pandora Jewelry, we covered some of what that looks like in the luxury goods sector. He detailed both instrumental and philanthropic ways various companies can demonstrate positive concern for the environment and for society at large. By philanthropic ways, we mean the very tried-and-true method of donating funds to, or in some cases establishing, a non-profit organization dedicated to environmental and social improvements. By instrumental ways, we mean companies that undertake infrastructure projects which benefit a community and the company both. The example shared here is a brewer establishing their operations in Africa building wells and ensuring clean water to the communities in which their operations are based and in which their workers live. The benefit is to the community who gets clean water and also to the company which cannot brew beer without water.
Both of these engagements can be carried out in a top-down fashion. Indeed, buy-in is utterly necessary at the C-suite level to achieve much in ESG for any company. They might also persist under a segmented organizational structure in which there is a reporting chain for sustainability that does not spread far horizontally across the company. An alternative to that is to imbue sustainability practices at all levels of the company. We recently spoke with several companies in the industrial sector who advocate this kind of culturally suffused ESG strategy. By making ESG concerns part of the overall company culture, the commitment is more, with apologies for the pun, sustainable. It is not tied to one leader or one organizational entity who can move on to a new position or be restructured away.
Leading into the Future
Leadership is never static, and our capacity to assess talent must always adapt to meet current needs. Vikash Salig of our Healthcare Practice recently proposed looking to Jungian psychology to assess leadership potential and cultural fit between candidates and hiring organizations. Our view of talent and fit evolves along with our current challenges.
Biologists who study evolution are divided by the belief that change either occurs slowly at a nearly imperceptible but constant pace, called phyletic gradualism, or that it occurs in rapid bursts between which change does not occur, called punctuated equilibrium. The changes we have seen in the past two years appear more like the latter model. Whatever the scientific community decides about how species become distinct from one another, it is clear that work has evolved rapidly.
In the same way that the ability to reverse the progress of biological evolution seen in the Jurassic Park series is fictional, we cannot move into the future of work and of business by trying to maintain the practices that worked before the pandemic. Skill in change management will be a central factor deciding the success of business leaders moving forward. Whatever the next normal is, it will not be one in which every business can require daily attendance at an office, or any business can ignore issues of diversity or environmental impact. Hybrid/WFH arrangements and deeper engagement with social issues will be the future of business. Leaders need to evolve along with these changes or risk extinction.
