Visions of britain the workforce 2020

The Workforce May 2010

Contents

1. A view from Friends Provident ......................................... 4

2. Foreword from Future Foundation .................................. 5

3. Executive Summary ........................................................... 6

4. The Changing Face of the Workforce .............................. 7

4.1. Key Finding .................................................................................................. 7

4.2. The changing graduate landscape .............................................................. 7

4.3. A degree of change ....................................................................................... 8

4.4. The sandwich generation ............................................................................. 9

4.5. The greying workforce ............................................................................... 10

4.6. The failure of corporate memory .............................................................. 10

4.7. Over 50 but not over the hill ..................................................................... 11

4.8. Conclusions ................................................................................................. 12

5. Flexible working is not the holy grail ............................. 13

5.1. Key Finding ................................................................................................ 13

5.2. Age brings increasing flexibility ............................................................... 14

5.3. Graduates, young people and flexible working ....................................... 14

5.4. The sandwich generation and flexibility .................................................. 14

5.5. Older people and flexible working ............................................................ 16

5.6. The importance of real-life social networks ............................................. 17

5.7. Conclusions ................................................................................................. 18

6. Rewarding Work .............................................................. 19

6.1. Key Finding ................................................................................................ 19

6.2. Salary versus age – older and graduate workers .................................... 20

6.3. Rewarding the sandwich generation ........................................................ 20

6.4. How money fails to motivate ..................................................................... 21

6.5. The challenge for management ................................................................. 21

6.6. Reward packages ........................................................................................ 22

6.7. Conclusions ................................................................................................. 23

7. Productivity ....................................................................... 24

7.1. Key finding .................................................................................................. 24

7.2. Measuring the wrong values ..................................................................... 24

7.3. Measure for measure ................................................................................. 25

7.4. Conclusions ................................................................................................. 25

8. Conclusions ....................................................................... 26

1. A view from Friends Provident

Friends Provident is delighted to present the second of our ‘Visions of Britain

2020’ reports. Produced with the Future Foundation, we aim to paint an insightful

and realistic picture of British society ten years from now.

In the second chapter of this, our first theme, we focus on the perspective of the

worker in 2020 through the eyes of three groups: those over 55, new graduates

and the ‘sandwich generation’ who are struggling to balance the twin demands of

young children and ageing parents. We ask how the workplace will need to adapt

to meet the needs of these workers and their very different circumstances.

We believe that these groups will face some of the biggest challenges in the

workplace of the future. However, at Friends Provident, we also believe that

with careful planning and consideration of the choices available to us, challenges

can be made into opportunities. In this new decade, we have more freedom than

ever before to shape our own destinies for the better.

We hope the fascinating insights within ‘Visions of Britain 2020’ will help guide

you in these choices.

Trevor Matthews, CEO, Friends Provident

2. Foreword from Future Foundation

In the second chapter of Visions of Britain 2020, our focus shifts to the workforce

of 2020 - in particular what types of worker will make up the working population

and what the pressures on each of these groups will be in 2020.

To create this report we’ve combined a number of different methodologies with

the aim of building the most accurate view of the future. We’ve surveyed 1,000

representative Britons and have examined their opinions in greater detail by using

focus groups. We’ve interviewed several employment experts to gain their

insight into the workforce of 2020, they are:

Ian Brinkley, The Work Foundation

Adrian Furnham, Professor of Psychology, University College London

Mike Emmott, Chartered Institute of Personnel and Development

Charles Cotton, Chartered Institute of Personnel and Development

We have combined these with expert opinions from our ‘Delphi Paneli’ - a way of

aggregating expert opinion to create a consensus on what the future will look

like.

Barry Clark, Future Foundation

i Bernard Brown, Partner, Head of Business, KPMG Guy Bailey, Senior Policy Advisor at the CBI

David Amos, Senior Policy Advisor at the Cabinet Office

Graham White, Director of Human Resources at Westminster City Council)

3. Executive Summary

We have found a number of stark changes between the workforce of today and

the workforce of 2020. By 2020 people management will be a much more

demanding task – in measurement, in motivation and in maintaining a sense of

what the organisation is.

Our research into the workforce of 2020 shows that three types of worker will

make up the majority of the working population by 2020: graduate workers,

sandwich-generation workers and elderly workers. As well as discussing the

pressures on each of these audiences, our report shows that the leaders of

companies will face new and very demanding challenges by 2020. Challenges

that require completely new skills. This report illuminates disruptive change in

four areas:

Greying of the workforce. Older workers will hold all the aces (and

most of the knowledge) while inexperienced graduates will need to

become more enterprising to find work.

More money, more problems. For our worker of 2020, money has

become less important. In the backlash of the banking crisis bonuses

have become less popular and packages are simpler.

(In)flexible working. Flexible working doesn’t solve all our problems –

indeed we imagine it will mean longer hours. For many of us, financial

pressures mean that we’d rather work longer hours and earn more.

Unproductive metrics. Business feels compelled to create metrics to

measure the value of what it does, and what its people do. By 2020 more

enlightened companies will recognise that measuring the knowledge

economy may actually limit it, at the cost of creativity.

4. The Changing Face of the Workforce

4.1. Key Finding

As P.J. O’Rourke once observed, age and guile beat youth, innocence and a bad

haircut.

Older workers, who have so often felt marginalised in the employment market,

will be in a much stronger position in 2020. The recession has vividly illustrated

the value of experience while older workers have a more philosophical outlook

on work which better equips them for a more flexible future.

There will be a huge increase in the number of these workers – as well as

graduate workers – who will have to become more enterprising to get into the

increasingly competitive working environment. In between these growing bands

of old and young workers, a band of ‘sandwich-generation’ workers will face

their own unique pressures, forcing employers to rethink their approach.

4.2. The changing graduate landscape

Graduate workers today: 6.62 million

Graduate workers in 2020: 9.06 million

Proportion of workers with a degree

0%

5%

10%

15%

20%

25%

30%

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

Source: British Household Panel Survey/ nVisionBase: 7,600-9,900 aged 16+, GB

74% of Britain’s teenagers want to go to university or college. In the immediate

future traditional graduate destinations – finance and the public sector in

particular – will recruit smaller numbers. This raises the prospect of graduates

being displaced into other industries or struggling to realise the investment

they’ve made in their own education.

Our forecast shows that, by 2020, the number of graduate workers will have

increased by nearly 50% - a reflection of the demands of the knowledge

economy. What this means is that a basic degree will be an entry-point into elite

jobs in the knowledge economy rather than a mark of distinction. To realise a

premium a degree from a top university or an MBA will be required.

4.3. A degree of change

Our forecast shows a steadily more qualified workforce - driven by the needs of a

knowledge economy. Currently 70% of boys and 78% of girls aged between 11

and 16 would like to go to university or college. It makes absolute sense for them

to do so; the graduate wage premium - across the OECD - has remained very

stable. Looking at current trends, there is no indication that the situation will

change. Indeed Professor Adrian Furnham believes that the wage premium

around the ‘golden triangle’ of London, Oxford and Cambridge will increase over

the next ten years as companies compete to attract the very best talent.

The current recession has had the effect of encouraging rather more school

leavers into tertiary education as a means of deferring entry into a tight job

market.

The recession will have an impact on graduate careers and recruitment. Finance

and the public sector – both traditionally big recruiters - are likely to be

employing fewer graduates in the next few years. This will have the effect of

shifting people into other sectors such as the creative industries. Britain is a

world leader in creative industries and the sector is an exemplar of the knowledge

economy. The attractiveness of working in this area is such that graduates will

have to be more enterprising to gain entry.

“Graduates going into that sector [creative and cultural] now are much more

likely to be self-employed, more likely to be in temporary jobs, more likely to

work part-time... ...the routes into that sector have become more diverse and

there are some hints that there is a greater degree of entrepreneurialism going

on.” Ian Brinkley, The Work Foundation

Professor Adrian Furnham also foresees that change will be forced upon

graduates.

“[Graduates] who have jobs will think of themselves as more fortunate... I think

they’ll be forced to [accept being more flexible], I don’t think they’ll choose to. I

think everybody wants security but I think security of every form will go down, so

they’ll be offered a three year or five year contract which they might have to

renew or apply for their jobs again.”

4.4. The sandwich generation

Sandwich generation*

0%

2%

4%

6%

8%

10%

12%

14%

16%

Total MenWomen 16-2425-3435-4445-5455-64 65+ AB C1 C2 D E

2002

2007

Source: British Household Panel Survey/ nVisionBase: 8,500 aged 16+, GB

The so-called ‘sandwich generation’ are defined as people who have both

dependent children and parents who require care.

Among people in the prime of their working lives – those aged 35 to 44 – one in

seven is a member of the sandwich generation. This hard-pressed group have to

deal with enormous time and cost pressures. With current policy aimed at

keeping the elderly in their homes, and with a fast ageing society, the sandwich

generation will inevitably grow.

Already 28% of UK workers find it difficult to fulfil family responsibilities

because of the amount of time they spend at work. Sandwich generation workers

will therefore force employers to increase the provision for flexible working

simply because they are too valuable to lose, but increased flexibility may not be

enough.

4.5. The greying workforce

Older workers today: 5.14 million

Older workers in 2020: 7.16 million

Proportion of workers* aged between 55 & 70

0%

5%

10%

15%

20%

25%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: British Household Panel Survey/ nVisionBase: 7,600-9,900 aged 16+, GB

In 2020 there will be more older workers in the workforce. In 2000 the average

age of a UK worker was 40. In 2020 it will be 44. One in five workers in 2020

will be 55 or older, according to the British Household Panel Survey. The

demographics are well known but the events of the recession have served to

highlight the value of experience very powerfully through the failure of corporate

memory.

“One of the great shocks of this downturn was the realisation that hardly anyone,

particularly in the senior reaches of companies, actually remembered what the

last recession was like. This was particularly acute in government and the

corporate sector... You’ve got no collective memory left in the organisation. I

think a lot of firms have found that the loss of corporate memory from their older

and more senior workers is quite a difficult problem” Ian Brinkley, The Work

Foundation

4.6. The failure of corporate memory

Alistair Darling commented recently on a cultural change within the Treasury,

which saw fewer people around who had dealt with a recession before. The

knowledge of how to cope with such a situation had retired from the organisation,

leaving many staff unable to rely on past experience.

This year the average worker in the UK is 42 years old. In the last recession of

1990 / 91, these workers were 22. Many would have been on a gap year or still

studying, and would have no experience of managing a company in a downturn.

This could mean many companies were in the hands of ‘recession-novices’.

We’d argue that the recent recession has made business leaders appreciate the

merits of retaining experience, placing older workers in a more powerful position

than ever before. At the height of the credit crisis, much was made of learnings

from previous recessions, with companies extolling a range of buzzwords from

innovation to R&D. Retaining staff who have experienced a recession first-hand

will be amongst the key learnings from this one.

4.7. Over 50 but not over the hill

Graphics from nVision for Barry Clark

Attitudes of those aged 50+ to working longer“Taking into account the current economic climate, what are your thoughts about the future?”

1%

26%

13%

35%

15%

7%

3%

I will have to work beyond myplanned retirement to supplementmy pension

I need to work longer, as I amgiving financial help to a familymember

The current state of theeconomy has made nodifference to me

I would like to continue working,but jobs are scarce for the over50s

I will have to live off my savingsuntil I get a job

If I cannot get a job, I will have toapply for financial help

Refused

Source: skilledpeople.com/nVision

Base: 766 respondents aged 50+, UK, 2009

A recent Consumer Attitudes to Saving survey shows among pre-retirees, 48% of

workers said they would like to work either full or part-time after the usual

retirement age.

In the data above, a third of retirees say they would like to continue working but

feel frustrated at the lack of opportunities. We also see how many older workers

feel that working on is a necessity.

Two thirds of our Delphi Panel agree that by 2020 we will have a problem with

skills shortages. A lack of talent, in addition to a new found respect for

experience, will likely create many more opportunities for older workers – a

receptive audience for flexible, part-time and home based working. In the

research conducted for this project, we found that older workers are much more

willing to take a pay cut to receive the option of flexible working than younger

workers. Only 8% of 16-24 year olds would be willing to earn less money in

return for flexible hours. Among those aged 55 to 64 the figure rises to 19%.

4.8. Conclusions

The workforce of 2020 will be greyer than it currently is. An unintended

consequence of the recession of 2008/2009 is an appreciation of the value of

experience. This creates a scenario in which older workers will be able to stay

active and supplement pensions while contributing in a powerful way. Graduates

may have to become more entrepreneurial in their approach to job seeking and

will get into employment in more diverse ways than has previously been the case.

Finally the needs of the sandwich generation will force the hand of employers on

offering greater flexibility.

5. Flexible working is not the holy grail

5.1. Key Finding

Our report findings show that it is wrong to perceive flexible working as a

complete solution to the delicate act of balancing work and life.

Flexible working can and does create anxiety. As social animals we struggle

with being cut off from others and we fear that we become invisible to those with

the power to promote and reward.

Professor Adrian Furnham believes that flexible working – in the sense of

working from home – can create anxiety:

“People at home feel cut off from what’s going on... If I am trying to manage you

from a long way away, although you might deliver your stuff on time, I’ve really

got very little sense of you as an individual and whether you are capable of

working at a new level... ...promotability requires interaction. We are social

animals and working from home can be very lonely.”

Also, a corporate culture can’t be expressed without community. Without a

community, knowledge – our most precious resource – can’t be transferred

naturally.

Our data shows a real paradox in attitudes to flexible working. Graduates, who

have just spent three or four years studying independently seem less enthusiastic

about home working while older people (for whom relationships at work are so

important) are the most likely to work at home. This seems counter-intuitive at

first but there is a logical explanation.

5.2. Age brings increasing flexibility

:

Attitudes towards work flexibility% agree or strongly agree, by age

0% 10% 20% 30% 40% 50% 60% 70% 80%

In the future I think that flexible working will mean that in general people will work more hours overall

I think the Government should consider introducing a 'parent' leave which can be split between the father …

I think most people still work from 9am to 5pm, five days a week

In principal, I think that paternity leave for fathers should be increased

My employer offers about the right level of flexibility for those who have to care for children and other …

My employer is more flexible in terms of work hours than they were 5 years ago

I feel that it is increasingly difficult to balance work and home life

In principal, I think that maternity leave for mothers should be increased

I think I am more productive when I work from home than in the office

I prefer to work in an office rather than working at home

I don't have the right facilities to do my job at home (e.g. broadband/IT set-up)

In the future I expect the number of people working from 9am to 5pm to increase

16-24

25-34

35-44

45-54

55-64

65+

Source: Friends Provident/The Future Foundation/nVision

Base: 1,000 respondents aged 16+, GB, 2009

5.3. Graduates, young people and flexible working

The data we’ve collected shows a naivety among young (16 – 24 year old)

workers. More than any other, this group believes that it is difficult to balance

work and home life, so they are the most likely to believe that traditional working

patterns will continue. They want this to happen too, so that they can be visible

within the organisation, and so improve their chances of progress.

It’s not surprising that young people, new to work, have some skewed

expectations of working life. What is concerning is the fairly gloomy outlook

they have (a majority of them anticipate that flexible working will mean longer

hours).

5.4. The sandwich generation and flexibility

“Everybody works better if they have the opportunity to have more influence over

when they work. It’s an obvious one for the sandwich generation – the problem

for them is that there is too much domestic and family related work to deal with.

Flexibility doesn’t fully answer their problem. Indeed it’s fair to say that

flexibility doesn’t answer anyone’s problems altogether.” Mike Emmott, The

Chartered Institute of Personnel and Development.

In 2009 84% of the UK population wanted a society in which they would be able

to devote more time to family life (Eurobarometer). Looking ahead and

anticipating life in 2020 and beyond, only 38% of the population imagine they

will have more time to spend with family. Another 43% think they will have less

time with their family. We anticipate that family life will become squeezed.

Flexible working may help in some ways but the majority of us still anticipate

that flexible working means working more hours overall.

22865: The Singleton Society

Importance of flexible working in job-making decisions for

parents

By gender“If you were applying for a new job, how important a factor would the availability of flexible working in deciding to apply?”

0% 20% 40% 60% 80% 100%

Women

MenVery important

Important

Not very important

Not at all important

Source: Equality & Human Rights Commission/nVision

Base: 3,138 working parents aged 18+, UK, 2009

The consequence of this is that flexible working becomes more important in

choosing jobs. Some people may not be able to take up jobs that they are

qualified for because other commitments preclude a regime with rigid hours.

5.5. Older people and flexible working

:

“Do you ever work from home?”% yes, by gender, age and social grade



Professor Adrian Furnham believes flexible working will be increasingly valued

by older people and that they’ll see it as a key benefit. He believes that the

ability to work less hours will suit their lifestyle. As a consequence of this, many

older workers will be able to look after grandchildren.

Certainly grandparents are more often involved in childcare and so flexibility will

be desirable. This is also the generation who approach retirement only to see

their financial position being less robust than they hoped. For them staying on in

the current job but on a part-time and more flexible basis may seem not just

desirable, but essential.

:

“Which, if any, of the following do you expect from your career in the future?” By age

0% 10% 20% 30% 40% 50% 60% 70%

To continue working after my official retirement age

16-24

25-34

35-44

45-54

55-64

65+



5.6. The importance of real-life social networks

While a more flexible work style helps parents and carers, it simultaneously

introduces new fears and anxieties. For many work flexibility is a problem and

not a solution.

The debt burden that graduates will have in 2020 will be great and they will

understandably be keen to progress within the organisation and maximise the

return on their education. They will likely feel that working at home will hinder

their progress as they will have a limited profile within the company.

Employers have their own concerns. Information is easily conveyed to

employees whether they are in the office, at home or in the pub. The transfer of

knowledge – the key commercial asset of the future - is more peculiar.

Knowledge is transferred through face to face contact. Having a dispersed

workforce is therefore counter-productive. Providing space (both in terms of

place and time) for people to interact is critical in the development of knowledge-

based businesses. How aware are business leaders of the way knowledge is

transferred and in how to facilitate it?

“A lot aren’t. It’s essentially the difference between world leaders and the

mediocre. It’s very hard to think of a world leading company that doesn’t at

least aspire to create those working relationships within their offices.” Ian

Brinkley, The Work Foundation

5.7. Conclusions

The desire for flexibility is forced upon some but for many flexible working

creates more problems than it solves. Flexible working, and especially working

from home, can hamper team working (a guiding principle of work organisation),

the transfer of knowledge, communication, the development of a work culture

and can deny the satisfaction that comes from working with others (especially for

older workers). The key in managing flexible working will be in applying it

sensitively, to balance individual needs with those of the organisation.

6. Rewarding Work

6.1. Key Finding

The most important rewards are not financial. To retain workers companies must

offer a job which is richer rather than just making employees richer.

By 2020, designing interesting jobs won’t be enough; jobs will have to become

more interesting and stretching over time. Career development must be built into

evolving job descriptions.

The importance of salary declines steeply with age – 36% of 16 to 24 year olds

name money as one of the three most important factors about their job. That

figures slides to 28% of the 55 to 64 year olds. One of the factors driving this is

graduate debt. University fees will grow exponentially over the next ten years.

The Russell Group of leading universities has been campaigning for a rise in

student fees for some time.

“I imagine that many of them are going to be coming out with significant debts

and they will be looking to pay those off as quickly as they can. I think they are

going to be focused on (in the early stages of their career) salary and bonuses.”

Charles Cotton, Chartered Institute of Personnel and Development.

6.2. Salary versus age – older and graduate workers

:

“What are the three most important things to you about your current job?” By age

0% 10% 20% 30% 40% 50% 60%

That my job is satisfying

Salary level

16-24 25-34

35-44 45-54

55-64 65+



At the same time the importance of job satisfaction rises with age. For older

workers a satisfying and enjoyable job is paramount.

Those aged over 65 are the most extreme. For them, workplace friendships and a

sense of reward are vastly more important than money. This creates an

interesting dynamic around employment opportunities for those beyond the

current retirement age.

6.3. Rewarding the sandwich generation

The sandwich generation face some very difficult choices between a need to

maintain income to support two generations and at the same time having to meet

onerous care obligations. Charles Cotton of the CIPD believes that some

companies may come to recognise this as an opportunity to gain or retain good

people:

“... organisations that are able to be flexible and then build their work patterns

around those individuals [i.e. the sandwich generation] may find it easier to

attract them and have a competitive advantage over those organisations that

can’t.”

In the tight employment market of 2020, the requirement to be flexible will be

pushed on employers. They will have the additional pressure of paying enough

to retain experienced workers.

6.4. How money fails to motivate

Currently only one in four workers are willing to work at a boring job in return

for good pay (see chart below). This reflects a long-term steep decline in our

willingness to tolerate boredom. We expect this trend to continue in the long

term (although the recession of 2008/2009 may cause a small blip). As a society

of workers we will continue to expect more stimulation in the workplace.

Asked to rank their priorities in seeking a new job, 36% of British people chose

‘an interesting job’ while 20% chose a ‘good salary’ according to a 2009 survey

for Eurobarometer.

Graphics from nVision for Barry Clark

“I’d be willing to work at a boring job as long as the pay

was good”

% who agree or agree strongly, by gender, age and social grade

0%

10%

20%

30%

40%

50%

60%

70%

To

tal

Ma

le

Fe

ma

le

16

-34

35

-54

55

+

AB

C1

C2

DE

1999 2002 2007

Source: nVision Research

Base: 1,200 respondents aged 15+, GB

6.5. The challenge for management

We make the case that people find greatest reward in the job itself. Therefore job

roles need to be finely engineered to be appealing to elite workers. The real

challenge for managers of people is not in designing the job role but in ensuring

that it offers development and that it continues to stretch people years after they

have taken up the role.

Ian Brinkley agrees that by 2020, workers will be looking for a higher level of

stimulation at work and that job development will be critical:

“...you can interpret a lot of the data to suggest that employers get the initial job

right. They attract people into it and then don’t develop the job. As people gain

experience the initial novelty wears off... I’m pretty certain that’s why you’ve

still got these very high reported levels of people saying that the job doesn’t make

the full use of the skills they’ve got.”

For graduates – many of whom enter the job market with high expectations of

working life, job development is central to how rewarding their work life is. To

retain these workers, companies will have to work harder on developing people.

6.6. Reward packages

By 2020 it is likely that remuneration packages will be simpler without many of

the benefits we see today. To an extent this will be due to wary employers taking

less of a role in pension provision. Among the experts on our Delphi Panel only

half agreed that companies will compete for the best people through high quality

pensions – 33% of the experts thought this 2020 scenario extremely unlikely.

It is our view that, by 2020, bonuses will be less common as part of packages.

Public opinion has been influenced by bonuses awarded to bankers. Nervous

companies, aware of public hostility towards bonus payments, may scale them

back in favour of increasing salaries. Companies may feel that bonuses are

counter-productive, leading to actions which can be selfish or even anti-social.

Public sentiment has turned – for example many feel that it’s inappropriate to

award bonuses to NHS managers as it rewards actions which may not be in the

best interests of patients.

A clear majority of workers would prefer to have the ability to choose their own

benefits (see chart overleaf). Older workers are the least likely to agree to this

perhaps because their own financial situations are more assured compared to

youngsters.

Charles Cotton of the Chartered Institute of Personnel and Development believes

that pay will be tied ever more tightly to performance and to the desire to retain

talent.

“I think at the top end there are a lot of governance issues so I think

organisations may be a bit reticent in giving out rather large bonuses to the top

executives unless it’s deferred over a number of years or they can really justify it

or have a good story to tell to shareholders and to the media. Our reward

management survey shows that one of the key changes planned for 2010 by our

sample was that they were going to differentiate the pay award and the bonus

award between high performers and normal performers. Rather than smearing

the pay award around, it’s going to be more targeted towards those people who

either add most value to the organisation or who the organisation really needs.”

:

“I believe that staff should have the flexibility to choose their own benefits” % agree or strongly agree, by gender, age and social grade

0%

10%

20%

30%

40%

50%

60%

70%

80%

To

tal

Ma

le

Fe

ma

le

16

-24

25

-34

35

-44

45

-54

55

-64

65

+

AB

C1

C2

DE

Agree strongly Agree



Lynda Gratton, Professor of Management Practice at London Business School,

believes that current reward systems often stifle creativity and innovation.

“Now, many of our companies have become very competitive. Reward systems

pit people against each other and it gets difficult, therefore, really to be

cooperative. These companies that are competitive, tournament-based, create

the big freeze [i.e. a working environment characterised by low morale and

interaction which is poor in creating new ideas].”

Gratton argues that cooperation is vital in creating dynamic and successful teams

who are capable of delivering innovation. To foster this sort of cooperative

environment, managers must coach and mentor effectively. Hence many

organisations will need to improve people management skills.

6.7. Conclusions

It’s a mark of the rising affluence in this country since the war that we’ve come

to define rewards in non-monetary terms. We believe that by 2020 UK GDP will

have continued its resolute upward growth bringing greater prosperity for most.

The consequence of this is an insistent desire for stimulation and growth at work,

a desire that will create new demands of people managers.

7. Productivity

7.1. Key finding

The corporate desire to measure everything will not help in the development of

knowledge and ideas. Few truly comprehend where ideas and innovation come

from – only companies that understand that some things cannot be measured will

succeed.

7.2. Measuring the wrong values

In 2020 staff – particularly knowledge workers – will be a bigger cost in relative

terms than they are now. Employers, aware of the rising cost of employing and

training workers will seek to monitor their effectiveness. Among our Delphi

Panel of experts, 67% agree that employers will have metrics in place to measure

productivity.

The first problem is that any productivity measure must be multi-dimensional. A

single measure invites staff to focus their energies on achieving that goal –

probably to the detriment of other useful activities.

Secondly companies are likely to focus on measuring inputs rather than outputs.

There will be a tension between measuring productivity and giving people the

space they need to be creative. Only the most imaginative and philosophical

companies will recognise that creating metrics does not facilitate creativity.

People need to be given the right space and environment to generate ideas.

Ian Brinkley agrees, saying: “[Productivity] will be measured badly. There is an

obsession with trying to measure everything. What you should be concerned with

is: what is the actual outcome, the outputs? People are obsessed with trying to

measure the inputs which is pointless.”

The third problem is a lack of standardisation. As yet there is no commonly used

method of calibrating the generation of ideas and knowledge. However,

economists are close to creating a measure of how the creative element of

industry contributes to GDP. While a useful contribution, it is likely that the

measures employed by economists will be too theory-based for practical

application.

Charles Cotton of the Chartered Institute of Personnel and Development is

sceptical about the current ability of British managers to performance manage

their teams. However he sees some signs that businesses are responding to the

challenge.

“I think, to be fair, organisations themselves recognise that [managers often

don’t have the right skills to reward productivity]. They are, increasingly,

spending more time, energy and resources on their line managers to ensure that

they are able to have those difficult conversations... ...organisations are now

ensuring when they do promote people to people management responsibility that

they have those skills beforehand.”

7.3. Measure for measure

The measurement of productivity means radically different things for different

groups.

Graduate workers: Productivity measures place a degree of pressure on

graduates – they will be eager to play to the scoring system in order to

progress and deal with the debt created by their education. For this

reason the evaluation of performance must be multi-faceted – the

existence of only one or two measures will encourage staff to strive to

achieve only those goals, to the detriment of the company’s broader

ambitions.

Sandwich-generation: For this group these measures can be a source of

great anxiety. As they attempt to balance jobs and family, they will fear

that others, free of the commitments, will be able to produce more, be

more flexible and appear to produce more. This is a test of the natural

inclination of employers to measure on numbers alone. The value of

contributions needs to be measured as outputs and needs to be measured

sympathetically.

Older workers: These workers are in a different position. Their

contribution will often be their experience; productivity per se may not

be so important for this group. A different evaluation method will be

required; the value of experience needs to be calibrated on a separate

scale.

7.4. Conclusions

In 2020 productivity will be measured and the best companies will show a

sensitivity in calibrating performance. The elite companies will accept that some

things really cannot be measured.

8. Conclusions

The workforce of 2020 will look starkly different to that of today - with changing

demographics meaning new rules, processes and ways of working that will affect

us all.

Soaring numbers of graduates mean that job seeking will change forever. Older

workers will hold the aces like never before, and sandwich-generation workers

will create entirely new working patterns.

The task of managing people in a more flexible environment will become wholly

more difficult in 2020. It will require a skill set that, in most cases, doesn’t exist

now.

For graduates, strange though it may seem, they will be motivated to work in

traditional and not-so-flexible ways. With student debt a problem, we expect this

group to be eager to advance – a more ambitious breed of graduates. The

difficulties they will find entering the job market, however, mean they will apply

a whole new level of enterprise and innovation to the job seeking process.

Faced with a squeeze on both their money and their time, the sandwich

generation will require sympathetic employers. The relative shortage of skilled

labour and the appreciating value of experience will be their levers to force a

more flexible approach from employers.

The problem of an ageing society has benefits for older workers. The prejudice

that surrounds this group will not disappear entirely but the value of experience

has been highlighted by the recession and will lead to more power than ever

before within this group, as knowledge and corporate memory become key.

Another major issue is the riddle over flexible working. Demographic changes

and the extension of the sandwich generation will force employers to offer

greater flexibility in order to retain elite workers.

However, home working provokes unintended consequences. Principal among

these is that when we’re removed from the workplace and our colleagues, we

remain individuals with a lesser sense of belonging to an organisation. This

means the slow death of the company man.

Future workers may feel themselves to be freelancers more than company people.

It’s much harder to express a company culture and to share goals when workers

are geographically spread. It’s also harder to exchange knowledge. Home

working goes against the benefits of people working in teams and it may not be

too strong to suggest that flexible working damages the knowledge economy.

While flexible hours offer some relief to parents and carers, flexible working is

not a solution for all – many of us would rather trade flexibility for more pay

while for others it means exclusion, a lower profile and being cut off from the

very human interactions that will create the ideas for the knowledge economy.

In 2020 people management will be a much more demanding task –in

measurement, in motivation and in maintaining a sense of what the organisation

is.

Visions of britain the workforce 2020

Business

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