A recent survey conducted by Lee Hecht Harrison | Penna, the global people management business, has discovered almost two thirds (65%) of UK businesses are now dealing with more disruption to their workforce than ever before. What’s more, a startling 94% of organisations have recently (or are about to) undergone significant changes, ranging from: local restructurings to full office relocations, as well as organisation-wide transformation resulting from leadership handovers and M&A activity.
Business leaders cite several factors as the cause of this prevailing state of change. Most surprisingly and contrary to current news headlines, only a quarter (26%) of respondents identified Brexit as the main driving force for change; compared to a third (33%) attributing this to the ongoing changes in technology.
Multiple developments now make us work in different ways with increasing dependence on technology. Mobile devices have created an “always-on” culture while, social media has revolutionised the way we both communicate and build networks – giving every individual the opportunity to interact with an ever-growing audience. Last but not least, the arrival of big data allows for more informed and timely decision-making. Digitilisation is not only altering how we do things, but it is also changing the very nature of the roles we perform. A report from Deloitte in association with the University of Oxford suggests as many as 35% of all UK jobs are at risk of being replaced by robotics in the foreseeable future.
Our recent survey uncovered some further surprising facts: the much documented and feared integration of younger demographics (Generation Y and Z) into the workforce is not a significant cause of change; only one in 10 (13%) respondents attributed changes to them.
Workforce change isn’t necessarily bad news for business, as transition means a fresh approach, innovative new teams, new products, ever-growing services, and perhaps even a plethora of ideas leading to a competitive advantage.
Can your leaders manage the change?
However, over a quarter of respondents (27%) think their senior management doesn’t have what it takes to successfully manage these changes. This is likely due to the fact that less than half (47%) of organisations are supporting their c-suite in developing the right skills to lead through change. Indeed, planning is as ever king when it comes to making sure companies are adequately prepared and able to capitalise on changes in their work environment. It’s not just in failing to prepare their leaders to oversee transformation that businesses are falling short, they’re also not supporting their top talent. Only two in five (38%) companies are assessing their talent requirements ahead of planned disruption and the resulting loss of top talent is named as a key reason for transformation failing to make a difference by 41% of respondents.
Lack of planning could be due to a lack of faith as a quarter of managers (25%) expect to not be able to take full advantage of business change. Further there seems to be a growing perception gap between middle managers and those in leadership: almost three quarters of senior managers (71%) were convinced that workforce change is being managed and communicated well, while just half (51%) of middle managers feel the same way. The consequences of this disconnect is that less junior managers are feeling empowered to keep things on track when problems arise. Ideally, anyone in an influential role should be brought into the circle of trust, consulted in the planning phase so that their input adds to the strength of the transformation.
Direct people costs make up 40% of all operational investment so the penalty for getting workforce change wrong can be heavy. Our study identified that more change is coming and shows no signs of slowing down, with four in five (85%) of respondents expecting these highly changeable working conditions to continue unabated.
It is therefore vital that companies investigate their shortcomings in relation to workforce change in order to actively work to bridge the gap between their transformation plans and the reality that surrounds them. This could begin by developing change management capability in leaders and senior managers and facilitating a more effective relationship between these two groups, so they start ‘singing from the same hymn sheet’.