Four key trends set to radically alter the workforce by 2035
New report from UBS Wealth Management and The Future Laboratory
London, 30th August 2016 – The workforce is set to significantly change in the coming years, according to a new research paper, “The Future of the Workforce”, commissioned by UBS Wealth Management.
The decline of a single company culture, a surge in freelance workers, a workforce reshaped by artificial intelligence, and a 13% leap in productivity for companies that invest in employee wellness programmes, are among the key trends that will define the state of the workforce over the next two decades. The last of these trends could generate as much as a 0.1% to 0.3% uplift in the GDP of a typical OECD country, according to predictions by UBS.
The report suggests two significant forces will drive workforce changes more than any other factors between now and 2035:
- The first is a difference in attitude towards work between those occupying managerial roles (Generation X) and their younger counterparts (Generation Y and Millenials).
- The second is the effect of artificial intelligence on different segments and levels of seniority of the workforce.
UBS commissioned the report because as a new generation enters the workforce and artificial intelligence becomes more sophisticated, companies must now more than ever prepare for the impact of these changes.
Commenting on the report, Jürg Zeltner, President of Wealth Management at UBS said: “The workplace is becoming far more complex. The relationship between employee and employer looks set to change significantly in the coming years, especially among workers who are currently only a short way into their careers. Our clients, many of whom run and own their businesses, are preparing for these changes and can benefit from the findings of this report.
The report picks out four trends in particular that will alter the workforce over the next 20 years:
- Artificial intelligence (AI) will radically alter the shape of the workforce: A different structure will emerge, with the number of middle-skilled workers potentially being reduced. Lower skilled workers are likely to be only partially affected, as designing AI will prove too expensive to replace their roles. Highly skilled workers meanwhile, will be freed from mundane tasks, allowing them to focus their time on their primary job, whether that is research and development, creative thinking or client relationships.
- Differing views between worker age groups could spell the end of the unified corporate culture: Research from the Chief Investment Office at UBS suggests 75% of managers in companies see managing a multi-generational workforce as a significant issue. This is likely to be witnessed in particular between Generation X, running companies in a similar way to their predecessors, and Millenial and Generation Z workers who hold a different ideal of how a company should operate.
- Millenial workers will demonstrate less loyalty to employers and be more inclined to work as freelancers: This trend is already happening as the number of freelance workers has increased 45% in the past 3 years in Europe according to the European Forum of Independent Professionals. Companies will have to cater for this and change the incentives they offer, moving away from traditional financial rewards to supporting employee’s lifestyle pursuits. Removing the unconscious bias regarding the type of people they employ will also become more important.
- Employees will demand “wellness” programmes: Employees will expect a strong wellness programme to come as standard, in the same way a pension plan and vacation time is expected today. According to research from the Chief Investment Office at UBS, staff productivity rises by an average of 13% in businesses that introduce strategies to boost levels of wellbeing from ‘low’ to ‘moderate’. If applied across the workforce of a typical OECD country, this could add between 0.1% and 0.3% to that country’s GDP, according to UBS estimates.
On the rise of artificial technology, Wiwi Gutmannsbauer, Head of WM Omnichannel Management at UBS, commented: “AI is a technology that should be embraced rather than feared. The research foresees inspiring possibilities that will shape the future of work. Imagine a world where employees can focus more time on getting to know their clients to better solve problems, while being supported by a technology that augments personal interactions and reduces administrative and repetitive tasks to a minimum. This is the world we are heading towards.”
On generational differences, Simone Thompson, Chief of Staff at UBS Wealth Management commented: “Businesses risk being weighed down by decades of unconscious bias that demands staff conform to a particular, very narrow, template. Particularly for the younger generation, this template is an uncomfortable fit. Failure to set aside unconscious bias could lead businesses to miss out on a host of potential talent.”
The research paper was produced by respected consultancy The Future Laboratory. Commenting on the future state of the workforce, Tom Savigar, Senior Partner at The Future Laboratory, said: “The work landscape will undergo a period of transformative disruption in the decade ahead. A new wave of developments in areas such as AI, data analytics, robotics and VR is bringing exciting opportunities to businesses.
“This will enable workers to optimise their physical and mental performance; embrace more flexible and modular work styles; enjoy careers that match personal own moral and ethical compasses. Indeed, businesses that harness the future will attract fresh talent that will drive innovation in turbulent times, and help to deliver a future of sustainable growth.”
The findings from the research paper will be presented at an event entitled, “The Future of the Workforce”, to be hosted by Jürg Zeltner in London, on Tuesday 6th September. UBS will be bringing together a number of speakers including Global Chief Economist at UBS Wealth Management, Paul Donovan; former Senior Adviser to David Cameron, Rohan Silva; former Norwegian Prime Minister, Gro Brundtland and the London Business School’s Lynda Gratton to discuss the changing nature of the workforce and how businesses can respond.
Further details of the conference, including an agenda and speaker information can be found at: https://event.ubs.com/the-future-of-the-workforce/home/. The full report, as well as reports on related topics, can be found here: www.ubs.com/foresight