In this new Anthropocene Age, the main risks are people’s actions and reactions. All too often, we are reacting to unforeseen risks caused by conscious human decisions, and then left firefighting when incidents occur.
The world’s evolution has seen many eras which have had a dramatic impact on our lives. From the Agricultural Revolution, the Industrial Revolution through to the Technological Revolution, each has had a profound impact on how we live, how we socialize, and how we work. We are entering a new era – the Anthropocene Revolution – where man is having such a profound effect on our natural and working environments that our thoughts, processes, and fundamental beliefs are being challenged and transformed like never before, and human rights are hanging in the balance.
We are becoming increasingly diverse. Our younger generations – our future workforces – have vastly differing views to the older generations at the heart of industry. Our workforces are becoming leaner and our exposures to errors and accidents at work is increasing as a result.
Social transformation is the way society changes in reaction to economic progress, scientific breakthroughs, technological advancements, and periods of conflict or political instability, and it is currently happening at such a pace our workforces are struggling to keep up. Alongside this rapid metamorphosis our people as a resource are changing equally as fast. Organisations must adapt their corporate policies to retain and attract the very best people and to have thriving workforces that are future resilient. We must predict future social transformation and prepare for them today.
In this edition of Horizon, we look at the Age of the Human and analyse its impact on our future working environments and assess how the risk landscape is being driven by our behaviour. We dive deep into the future of work and question what social transformations society and organisations are facing today, and in the future, to enable us to plan for a more resilient workforce of tomorrow. We ask what social transformation means, why it matters, and take an in-depth look at the dangers of not shifting our mindset to a future-oriented approach to risk management.
A far cry from the Greek myth about the Ages of Man, this is reality. Not to act now, not to plan today for risks of the future, could leave the working world in a dire state in years to come.
A diversifying workforce
If you look at largest organisations in CEE most employ people spanning four different generations, from a multitude of different nationalities and cultural backgrounds, with a plethora of different abilities and disabilities, and an array of personal values and beliefs. We are living in age where we quite rightly positively encourage diversity in the workplace; not just for equality and inclusion sakes but for gaining unique, valuable skills. As our personnel are becoming more diverse, we need to cater for this ever-evolving mix of people if we are to win the war for talent. It is a fine balancing act of providing benefits, career opportunities, training, and different modes of working, with a cohesive company culture and profitability.
Thanks to people retiring earlier, the mortality rate outweighing the fertility rate, and the possibility of easy migration between countries, human beings today have more choice than ever before about how they work, where they work, and who they work for. As employers adapt to attract the very best employees, this ever-evolving wealth of choice at work is set to boom. The value of people as a resource is skyrocketing bringing new working models with new, not yet seen risks.
With diversity comes a change in values
Humans have always had a thirst for knowledge and never has this been fuelled as much as it is today. With the rise of technology and AI any information is readily available to us at the click of a button or the flick of a screen. This is changing the way we think, the way we consume information, and the speed in which we expect things to be done. As these dynamics change in our personal lives, so too do our work expectations – and things are changing fast!
The core values of Generations Y and Z are vastly different to those of Generation X and Baby Boomers. These younger generations have grown up in an age of plenty mired by multiple crises and threats to personal and environmental security – wars, the pandemic, the migration crisis, and climate change have all featured prominently in their lives. As we’ve seen with the likes of Greta Thunberg and Xiuhtezcatl Martinez, they care passionately about these topics and are campaigning as young teenagers on a global stage to fight for their causes. Yet industry is built on the materialistic values of Baby Boomers where KPIs are always financial. What does this mean for our future businesses?
As our workforces and products diversify there is a massive shift from shareholder value to people value taking place in the corporate world, but our businesses and products are not adapting to meet it. Purpose needs to become a goal replacing the traditional focus on financial growth. Our clients want to see and feel purpose in our brands, and this ultimately stems from those they do daily business with. As such, we-cultures are becoming all-important and businesses which effectively create stable workplaces with a sense of community and employee-worth at the heart of them are the most likely to deliver financial success and impeccable client service. These are the businesses which will be the most resilient in the future.
Is it possible to build meaningful non-financial KPIs into a company? How do we fulfil those goals? How do we transition from being client centric to people centric so that we can win the war for talent? How do we protect ourselves from the risks that this ever-widening rift between the current and the future workforce is inevitably going to create? How do we mitigate the risks for new products and services being created to fill the voids between the generations? And what will Gen Alpha want from work in eight to 10 years’ time? Lots of questions! All of which need answering today.
The shrinking skill set crisis
According to the World Economic Forum, by 2027 businesses predict that almost half of workers’ core skills will be disrupted. They also cite that over the next five years, an estimated 23% of jobs will undergo transformation, necessitating millions of individuals to transition from declining roles to those on the rise. The biggest risk for organisations under these circumstances is the transferability of skills, the loss of skills, and the resulting impact on employees’ mental health.
Businesses are losing skilled labour, and this will only escalate over time. The knock-on effect is that economic targets cannot be met due to capacity bottlenecks because of smaller workforces. This in turn means an impact on sales, and organisations are left with the need to increase per capita productivity because they are having to achieve more with fewer people whose mental health will be increasingly challenged as a result. This scenario is not infinitely possible. With increased stress and pressure, comes greater risks of human error which can put supply chains out of action, open organisations up to cyber-attacks, endanger the health and safety of operations and workforces, and more. It is essential that safety in the workplace does not fall victim to productivity. We need to plan for these future scenarios and have strategies in place to minimise the risks of human error and declining mental health before they happen, not after the event.
As practical skills decline and the war for talent continues to rage, industry is finding it cannot up-skill its employees quickly enough to meet technological advances. The race to reskill and retain will begin to play a more prominent role to prevent workforces from collapsing. The most resilient businesses will be the ones whose people are continually well trained in line with technological advances.
Furthermore, humans have become migratory which again contributes to the shortage of skills in certain regions. We follow our hearts to the countries with the best career opportunities, the best working conditions, the best work life balance, or the best climate. As global warming continues apace, we will see more and more skilled labour migrating northwards to escape extreme heat and drought unless organisations can offer them the right conditions in which to work or governments strive to counteract climate change at every turn.
Is industry being failed by the education system?
It is becoming clearer by the day that today’s education system is not providing graduates who are equipped to meet our future employment or business needs. Should it? Is it governments’ responsibilities to educate children and young adults in such a way that they are work ready? It is undeniable that because schools are state run, they will never be able to change as quickly as society is changing. Schools and universities are reactive to change. And our youngest generations – our employees of tomorrow – are chiefly growing up learning different skills, delivered in new and exciting technological ways at home, and being educated in outmoded archaic school environments.
Practice shows the current system doesn’t work. Industry is starting to bear the responsibility to train, educate and build the workplace skills and knowledge for the next generations after they have left education. So, how do we avoid the risk of scores of future generations ready to work yet not having the necessary skills to do so? How can the corporate world contribute in the right way? Should industry be shouting more loudly about the need for educational change and lobbying politicians? Should we be offering in-school training programmes and apprenticeships? The answers are unclear but the reality we are headed towards is not.
Tomorrow will be too late!
In this new Anthropocene Age, the main risks are people’s actions and reactions. All too often, we are reacting to unforeseen risks caused by conscious human decisions, and then left firefighting when incidents occur. We are channelling unprecedented amounts of money into cleaning up the risks after they have happened. It’s not sustainable. The cost of reacting will escalate until it is out of control, mounting pressure on our workforces until industry is crippled and mental health teeters on the brink.
At what point do we stop? At what point do we invest in the future and stop firefighting? At what point do we take control of our risks and practice conscious risk management to counteract the risks caused by the conscious decisions we are making? It is our responsibility to shift our mindsets, to make decisions whilst consciously looking to their future impact, and plan for imminent risks today, because tomorrow might just be too late.
HORIZON Risk Thought >> Fast Forward
The complexity of today´s risk environment is changing at an accelerating pace, making risk management even more challenging. We have created HORIZON, firstly as a print publication and now as a page for sharing the latest insights about ongoing transformations. Our risk specialists will continue to provide their expertise and knowledge to shine a light on the challenges of the future.
Georg Winter
CEO GrECo Group
T +43 664 962 39 06
