4 models of the labor market in the future

We will try to define man's place in the new world of work more clearly through 4 possible forms of the socio-business concept according to PwC's research Workforce of the future - The competing forces shaping 2030. The worlds in colors represent 4 possible forms of emerging markets and their trajectory in the business future . All imaginary worlds from research bring with them certain characteristics and dominant features on which they were created, as well as consequences for the workforce and people in general.

The imagined concepts of the coming decades will never be final and completely accurate in their forecast, but the outlines of the future can be glimpsed through logical predictions based on the current state and global growth trends. Indeed, one of the basic characteristics of our age is the ability to surprise and the factor of unpredictability.

In order to survive at the dynamic turning point of future challenges, man will have to focus all his efforts on constant adaptation to new situations and continuous development of skills. Maintaining competitiveness in the world of transition of technological, social and business paradigms, while not losing the fundamental sense of identity and value principles, is not an easy task.

More than ever before, reflection on the learning process itself comes to the fore - the question of how to learn becomes more important than what to learn. Intellectual complacency could prove to be the worst enemy in a world of rapid change, and creating new patterns of thinking becomes a winning formula and a lifelong task.

Reign of Innovation: The Red World

A world of innovation with just a few rules

The Red World is the perfect incubator for innovation. New products and business models develop at lightning speed, much faster than institutions can track and control. Technology encourages the creation of powerful, like-minded and cross-border social groups. Companies are in a constant race to create personalized services and products and find new ways to serve target groups. Individuals who offer ideas and skills that best match what businesses and consumers want reap high rewards. But in a world with few rules, the risks are high. Today's winning business could be tomorrow's court case and affair.

Promptness and speed are essential

Big business has been neglected in a digital-friendly world that is awash with small entrepreneurial companies and start-ups. Digital platforms connect workers with employers, skills with demand, capital with innovators, and consumers with suppliers. This allows entrepreneurs to establish a reach far beyond their actual size in terms of impact and scale of business. Fearing open market competition, larger employers are fragmenting in order to create their own internal markets and networks in order to reject old-fashioned hierarchies, and encourage and reward workers in finding new ideas. The pace of development and testing of new products and services is maximally accelerated, increasing the risk of brand damage and failure.

A workforce under pressure from innovation

Expertise and expertise are highly valued in the red world and professional career. The emphasis is on specific skills, experiences and networks of contacts instead of the employer or institution for which the individual works or has worked. Companies with only a few employees have become the norm. Organizations with a few key people use all available technology, supply chain and intellectual property instead of human effort and physical assets to generate value. The commercial value of learning takes precedence – a university degree is seen as less valuable than specific and relevant skills or experiences. Employees are aware that the most sought-after skills offer the greatest financial benefit. Frequent change of jobs dominates; the job is provided only while the project or specific task lasts. Labor contract negotiations are key, and intellectual property and labor flexibility are just as important as financial incentives.

Blue world - the corporation is king

Capitalism rules

In the blue world, companies see their size and influence as the best way to protect existing profit networks from intense competition and aggressive new market entrants. Corporations grow to such an extent and exert such influence that some become more powerful than nation states. Success depends on a productive workforce as large companies compete for the best available talent. They push the boundaries of human capability by investing in augmentation technology, drugs and implants that give their employees a strategic advantage.

Extreme talent

Corporations may dominate the blue world, but labor is scarce. Exceptional talent is in high demand – employers prioritize securing a core pool of talented employees by offering excellent benefits, but otherwise borrow flexible talent and skills when and as they are needed. Human effort, automation, analytics and innovation are combining to push workplace performance to the limit. Human effort is maximized through the sophisticated use of physical and medical enhancement techniques, and worker performance and well-being is measured, monitored and analyzed at every step. In this way, a new type of elite super-workers is created.

What does this mean for workers?

For workers in the blue world, the pressure to perform is relentless. Individuals in full-time employment enjoy excellent privileges, as do contract workers with special skills – but both know that their future employability depends on keeping cutting-edge competencies relevant and learning new ones. A corporate employer separates the successful from the unsuccessful; corporations provide a myriad of services ranging from children's education, elder care, and health services that were previously provided by the state. 

The price workers pay is their data. Companies obsessively monitor and measure their workforce - from psychological analytics to their performance, health and well-being - both in and out of the workplace. Organizations use data to predict performance, and most importantly, to predict the human risk factor.

CPO as a new thought leader

• The Chief People Officer (CPO) is a powerful and influential position, sometimes known as the "Head of People and Productivity" and sits at the very top of the board of directors.
• The science of human capital has developed to the point where CPO has explicitly demonstrated the link between people and performance.
• The people risk is one that the board has taken seriously – as a result, the CPO and HR are becoming more influential.

What does the workforce look like?

• Apart from the core group of a few high-ranking employees, talent is "bought" where and when needed. Individuals with extremely rare skills are retained by exclusive contracts.
• Companies compete fiercely for top talent - the best hire an agent to negotiate and manage their career.
• Employers start looking for exceptional talent very early, making connections with schools and attracting promising youth.
• Employees at all levels take an active role in their own career development, improving their skills whenever they can and in any way possible – including medical enhancements.
• Society is divided into those with corporate careers and those without access to the same level of financial rewards, health care and general benefits.

Organizational challenges

• As organizations grow, so does the risk of external threats such as technological terrorism or economic collapse due to rapid expansion. It is difficult for organizations to change business direction due to size and scope.
• The value of human capital at the highest level is enormous, and the pressure on wages, especially for senior management, is intense.
• Organizations must develop models and systems that allow individuals and their agents to negotiate the value of their human capital based on employees' personal investment strategies.

Companies care: Green world

Companies must care

In a green world, corporate responsibility is not just a reputational tool – it's a business imperative. Companies have become open and cooperative organizations that perceive their existence as an essential role in the development of their own employees and support to local communities. Keeping in mind the pressure of public opinion, dwindling natural resources and strict international regulations, the company implements a strong ethical and self-sustaining plan. 

This is characterized by a strong social conscience, a sense of environmental responsibility, a focus on diversity, human rights and justice of all kinds, and the realization that business has an impact that goes far beyond the financial aspect. Trust is the basic currency that promotes business and employment. Companies must place their social responsibility at the center of their commercial strategy.

Automation as a double-edged sword

Automation and technology are essential elements of a green world as they help protect scarce resources and minimize environmental damage. The technology is being used extensively to replace the need for travel and unnecessary pollution, spurring rapid innovation in communications technology. 

But the question of where people fit into the automated green world is under a big question mark. Technology is a double-edged sword for green-world employers – it enables them to achieve their ethical and environmental agenda, but at what cost to employees?

Profession as a secondary attribute

Employees enjoy family-friendly and flexible working hours and are encouraged to participate in community service projects. They trust their employer to treat them equally in terms of pay, development and working conditions, and in turn are expected to reflect the company's culture in their approach and behaviour. The high ethical standards that companies adhere to also apply to employees; behavior and ethics are taken very seriously at work, and employment is assessed on a wide range of topics, including how effectively workers manage their time and resources.

Who leads the people strategy?

• The CEO leads the corporate strategy of people believing that the employees in the organization, their behaviors and their role in society have a direct connection to the success or failure of the organization.
• The HR function was renamed to "People & Society" and encompasses a broad mix of HR, marketing, corporate social responsibility and data analysis.
• It becomes a priority for HR to develop and maintain a series of virtual social networks across the organization to encourage communication and reduce the need for travel.
• Many employee decisions are tightly controlled by regulations, from diversity quotas, mandatory health benefits (eg, sleep clinics and "digital diets"), to the number of acquisitions companies can make during a recession.

What does the workforce look like?

• Workers are attracted to those organizations that they privately admire and whose values ​​correspond to their views on the world.
• Even in a green world, competition remains intense for the best talent; the financial aspect is still important.
• The incentive package is increasingly inventive and an essential tool for attracting and retaining workers. Three weeks of paid annual leave to work on charity and community projects is standard practice.
• Employees are expected to reflect their employer's values ​​- both at work and at home through the 'organizational code'.
• Travel is tightly controlled and monitored, and there are incentives for inventive and efficient use of resources.
• The idea of ​​a "job for life" is making a big comeback.

Organizational challenges

• Effective communication of corporate goals and values ​​to the right people is a fundamental organizational requirement.
• Building and maintaining trust with employees and wider society is one of the basic tasks, especially when it comes to the use of automation.
• The brand must be protected at all times. The possibility of socially irresponsible behavior within an organization or anywhere in the supply chain carries enormous risks. Quality assurance and preparedness are the most important factors of organizational culture.
• Compliance with government regulations is not enough: organizations are under pressure to raise the bar even further and establish policies and practices that go beyond even regulatory requirements.
• Organizations must balance the relationship between short-term financial and long-term social good.

People First: The Yellow World

We are all one

In the yellow world, workers and companies look for a higher purpose and meaning in what they do than the work they do. A strong desire for fairness in the distribution of wealth, resources, and privilege drives public policy, leading to increased state intervention, and consumers and workers voting primarily according to a moral compass. Workers find flexibility, autonomy and fulfillment working for organizations with strong social and ethical standards. This is a collective response to business fragmentation; the desire to do good, for the common good. A wider range of markets is regulated by the concepts of "good work" and "fair work", moving away from traditional employer/employee relations.

Two sides of technology

Technology has helped create a dynamic yellow world by lowering market entry criteria and providing easy access to crowdfund capital. This allows smaller entrepreneurial units to compete in areas that were previously the domain of large organizations. But there is a central conflict around technology and automation; in the yellow world, people will find it difficult to give up jobs prone to automation without a fight. Since more and more people are under the influence of technological progress and their business skills are becoming obsolete, growing dissatisfaction and rejection of policies that seem to favor the "elite" are expected. However, "invisible technology" such as functional support for artificial intelligence and automation of tasks that are harmful or impossible for humans are still dominant phenomena.

Shared dreams and work

Workers feel a strong connection and loyalty to their employers, but only if there are shared affinities or motives. The yellow world is the perfect ground for the emergence of new workers' associations, similar to the artisan associations and commodity brotherhoods of the Middle Ages. These associations develop to protect, support and connect independent workers and often provide training and other benefits that were previously traditionally provided by the employer.

Who drives the people strategy?

• Business leaders are responsible for managing people and providing perspective.
• HR rarely exists as a separate function as organizations rely on outsourcing, specialized vendors, and automation for workforce processes.
• Unions and workers' associations support workers in building skills and experience through training and career development support, along with other types of assistance.
• Digital platforms create mobility and help match workers with employers and skills with demand.
• Performance refers to the achievement of organizational goals, but also, most importantly, employee behavior and social impact.

What does the workforce look like?

• Workers with similar aspirations gravitate towards each other, aided by technological platforms.
• Individuals come to work together on projects or on the realization of an idea - without a deadline.
• Trade union organizations provide members with a strong sense of identity – individuals see themselves as members of their profession, identifying with each other because of their particular skill, interest or goal.
• Non-financial rewards are accepted as fair compensation for business engagement.
• The concept of work is subject to change; traditional working hours from 9 to 5, from Monday to Friday is extremely rare - the boundaries between private and business are getting smaller.

Organizational challenges

• A compassionate brand and a good code of ethics are essential in a yellow world. It is necessary to actively manage risk in the prevention of damage to the brand by irresponsible individuals.
• Organizations are evaluated on the basis of trust and honesty; organizational purpose must be clearly articulated and demonstrated by example.
• Ethical and transparent supply chain management is critical and penalties apply along the entire chain for non-compliance or non-compliance.
• In the yellow world, relations with governments and non-governmental organizations are vital and should be closely controlled.

Technological breakthroughs - demographic shifts - rapid urbanization - changes in the ratio of economic power - lack of resources and climate change

Vast advances in technological innovation, automation, robotics and artificial intelligence are advancing dramatically, changing society and the number of jobs available. Technology has the power to improve our lives by increasing productivity, living standards and average life expectancy, and frees us to some extent from professional obligations to focus on personal fulfillment. But it also brings with it the threat of social unrest and political turmoil if the economic advantages gained through technology are not equally shared.

Technology is not the only one that needs to be updated - a change in the size, characteristics and age profile of the world's population will certainly shake the foundations of established social systems and orders. With a few regional exceptions, the world's population is aging, which puts additional pressure on busy business, social institutions and an economy that rests on the relationship between man and time. Longer life expectancy will affect business models, the ambitions of future generations and pension costs. An older workforce will have to master new skills and work longer hours to survive in the market, and 're-tooling' will become the norm. The lack of human labor in the accelerated aging process will stimulate the need for automation and productivity improvement through scientific advances, primarily medicine.

A very important but often neglected aspect is certainly the significant increase in the world's population living in urban areas. The UN predicts that by 2030 as many as 4.9 billion people live in cities, and by 2050 their share in relation to the total world population will increase by 72%. Even now, many metropolises of the world have a GDP higher than the average country, and in the new rule of cities, the means for creating new jobs will be of exceptional importance.

The balance of power between developed and developing countries is also changing. Developing countries, especially those with large working-age populations and which timely embrace the new business ethos, attract investment and improve the education system, will reap the greatest benefits in the new model of the world. The so-called emerging countries also face a major challenge; as technology increases the scope of the developed world, unemployment and migration will continue to be a widespread problem in certain regions without significant and sustained investment and effort. Erosion of the middle class, unequal distribution of goods and job losses due to massive automation will increase the risk of social unrest in developed countries. Traditional energy industries and the millions of people employed in the respective branches will experience rapid restructuring and inevitable retraining.

In addition to all the above challenges, the necessary reduction of fossil fuels, extreme weather conditions, sea level rise and water scarcity undoubtedly deserve to be high on the priority list. Keeping in mind the continuous growth of the global population, forecasts of an increase in energy and water demand of up to 50% in the late 2020s are quite realistic. New types of jobs will therefore have to adapt to alternative energy sources, modern engineering solutions, environmentally friendly designs and waste management in order to cope with these urgent needs. Maintaining economic growth is a key factor in supporting the creation of new jobs, and the scaling of retraining and the collective development of workforce skills, including mobility, are of particular importance. With sufficient economic growth, innovation and investment, there may be enough new jobs to offset the impact of automation, provided the importance of the moment is recognized.

Surveys show that a third of workers are worried about the future of their profession due to automation – an anxiety that kills confidence and willingness to innovate. How employees feel today affects business tomorrow - a mature conversation about the future is a common sense approach that demonstrates seriousness and concern for people. Skills that automation cannot perform become essential – and that includes creativity, innovation, imagination and design skills. Using these characteristics means thinking about tomorrow, and it belongs to those who prepare for it today.