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Modern work and its challenges for employers

20/12/2018 HR Services

Generation Z – digital, interconnected, independent

Work-Life-Balance, the ability to work independently, and achievement of personal goals have replaced salary, company cars and prestige on the list of sought-after status symbols. At the same time, globalisation, digitalisation and demographic change are ensuring that the balance of supply and demand in the labour market is shifting. It is not uncommon for employers to have to convince potential employees of the strengths of their business in order to remain competitive, and there is no end in sight to this trend. As such, the question arises as to how employers will react to the changing demands placed upon them by their employees, and how the requirements profile for future employees will change.

Any discussion around changes in the world of work is always a discussion about different generations. In the last few years, this discussion was defined by Generation Y, those born between around 1980 and 2000. These “Millennials” are characterised primarily by their ambition in terms of their education and careers, their weak ties to any single employer, and their demand for a realistic work-life balance. Businesses have scarcely managed to position themselves in response to this new situation in the labour market and yet, a generational shift is imminent: Generation Z is coming.

Generation Z usually refers to those born between 1995 and 2010. They combine the ease with which they interact with digital content with a heightened sense of interconnectivity through digital media, and an independent, self-confident attitude. These “digital natives” will be even more demanding of their future employers than Generation Y: self-actualisation, working atmosphere, and fun at work will be the most important factors for these young graduates.

At the same time, developments in educational politics have created an environment in which more and more young people start higher education and strive for an academic career. The statistics emphasise the trend towards a more academic approach: whereas around 1.98 million students were registered at German universities in the winter semester of 2006/2007, this number had grown to 2.81 million a decade later. This represents growth of around 41% in just ten years. On the other hand, fewer and fewer school leavers are opting for apprenticeships. Since 2008, the number of newly begun apprenticeship contracts has represented a year-on-year decrease every year with the exception of 2011. Despite widespread reporting on a skills shortage, creating problems for employers in fields where apprenticeships were traditionally most significant, there is no sign of a reversal in the trend. Over the long term, however, it is entirely possible that apprenticeships will regain some of their lost popularity, and there is no indication that these jobs can be replaced by machines as digitalisation gathers pace. It is already the case hat that a third of apprenticeships go unfilled due to a lack of suitable candidates. At around 172,000, the number of vacant apprenticeships is higher than ever. The trend towards more academic education extends beyond large-scale industrial manufacturing, with medium-sized companies in Germany’s Mittelstand in particular complaining of unfilled apprenticeships and fearing billions in lost revenue.

Due to their positioning as high-technology sectors, the space, aviation and aerospace industries rely heavily on well-educated, highly qualified graduates and professionals. In-demand skills in the fields of digitalisation, Industry 4.0 and Big Data are in particularly high demand, meaning that Generations Y and Z have the best prospects for finding jobs in engineering and scientific fields.

The employers of the future

According to the German Federal Statistical Office, the economically active proportion of the population will fall from around 61% to 52% by 2050 due to demographic changes. That is equivalent to a loss of around 15 million workers, which the economy urgently needs. Experts are, therefore, already talking about a “War for Talent” that will require employers to adopt new strategies for acquiring and motivating young talents from Generations Y and Z. Businesses must adapt to a shift in the way that employees think about performance and in their expectations of their employers. However, what does this development mean in concrete terms and which HR strategies will be successful for employers of the future?

One common thread in this context is the concept of employer branding. This term refers to the corporate, strategic measures used by employers to build a brand and to depict the business as an attractive place to work. In this respect, some of the most important factors are:

Modern leadership concepts

Workers in Generation Z need a leadership style that is built around flat hierarchies and interaction among equals. Leaders must possess the ability to question themselves, engage with results-focused processes, and show empathy to their staff. Young employees expect a partnership-based collaboration to generate value, room to develop, and regular feedback from their leaders.

Flexible working times and locations

Creativity is not linked either to a fixed workplace nor to a specific time. The new generation of employees needs trust, achievement-based agreements, and flexibility. The move away from the traditional “nine-to-five” working day is already complete in many workspaces and leads to a smooth transition between professional and personal lives, and this development is likely to become universal over time. The tendency towards hot desking, creative zones in the workplace and childcare at work will all play a role in this transition.

Training and career development

The quicker technology changes, the quicker the requirements profile for employees changes with it. In high-tech industries such as the automotive, aviation and space industries, in particular, a fundamentally different approach to human resources issues makes sense, in order to enable employees to undergo continuous professional development. It is not enough to offer generalised training on the basis that a rising tide lifts all boats: instead, many businesses need to work closely with their staff to develop individually tailored development approaches and regularly put this approach to the test.

But the demands placed on employees will also be shaped by this change in the future. Skills such as the ability to work independently and take responsibility, a digital thought process, an intuitive approach to using computers, and foreign language skills will be taken as a given in the future. The progress of artificial intelligence (AI) by machines will result in human workers operating with a different set of responsibilities. Whereas computers will systematically take over logical thought processes in future, humans will increasingly be tasked with the “creative” part of the process. This will depend, among other things, on the following:

  • An adaptive thought process: The ability to recognise and assess problems in specific contexts
  • Digital thought processes: The ability to recognise complex contexts in computer models and databases
  • Social intelligence: Machines won’t replace people on a social level, even in the long-term
  • Intellectual abilities: The capacity to interact with different languages and cultures in a global context

As digitalisation takes hold, demands on tomorrow’s workforce will, therefore, become significantly more complex. Just as employers will have to meet the requirements in the future in order to be perceived as an attractive option for future skilled workers on the labour market.

We would like to support you in determining the current status quo and uncovering optimization potentials, because often the external view is more objective and unbiased and therefore more goal-oriented. Your company has already arrived in the working world 4.0? Then we will find the right specialists for you, who will work with you to make your vision a success.

Sources: Agentur Junges Herz | berliner team | BVDW | FAZ.NET | Statista I | Statista II | Wollmilchsau GmbH | Zukunftsinstitut GmbH

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