1. The Future of the Global Workplace
Dr Peter Saul
Presentation to
Diversity Council Australia’s
Annual Conference on Diversity
22 November 2007
Melbourne

2. Overview How can we most profitably think about the topic?
Work, workers and workplaces aren’t what they used to be or where they used to be.
… and things are still changing, so the future will be different again.
How might the HR function evolve in the light of all these changes?
What role will diversity play in successful organisations?

3. LOOKING AT THE BIG PICTURE: Probable shapers of the 10-20 year future
Polarised distribution of wealth
Globalisation
Diversity, complexity
New technologies: e.g. genomics, nanotechnology
Information and communications technology
Disintermediation
Legislation
Corporate governance structures
Population demographics
Natural environment; e.g. climate change
Risk, uncertainty, lack of meaning
Pandemics; e.g. bird flu
Wars, terrorism
Search for simplicity, new values, meaning
Growth in experience economy
Questioning of Western capitalism
Technology

4. 10 Consumer Trends for 2006+
ANXIETY - expect a boom in escapism and fantasy
CONNECTEDNESS - faster, smaller, more intelligent world where events will be experienced by more people
SPEEDING-UP - blurring of work and home; memory loss, increased stress and mental illness
MOBILITY - people want to access anything , any time, anywhere
CONVERGENCE - blurring of whole industries, markets and brands
PRIVACY - potentially a more truthful and trusting society OR people adopt multiple personalities and fake IDs
NOSTALGIA - escape to the past; increased desire for face-to-face contact
LOCALISATION - more local trade alliances; the re-emergence of city states; the Balkanisation of Europe
AUTHENTICITY - growing interest in how things are made; search for real products and experiences
HAPPINESS - people increasingly value time, well-being and sustainability ahead of more money and materialism
Source:

5. Scanning the Environment for Patterns of Weak Signals
India’s population will grow by 260 million by 2025; 5 times the increase in the US; and twice that in China
Global survey of consumer and retailing companies: greatest threats over next 15 years are low-cost competition; decreasing customer loyalty
Sydney households have average net worth 37% higher than rest of Australia
ABS predicts,
childless couples will outnumber those with children by 2010
65 per cent of
young Australians will be overweight or obese by 2020
Technical
Almost a billion new consumers will enter markets in emerging economies
20% of Aust. adult population has downshifted in past 10 years
In 2005, one in six countries in the world faced food shortages because of severe droughts due to global warming
Environmental
Social
% Aust. population over age 65 will increase from 13% in 2005 to 24% in 2025
No developed country has fertility rate above replacement level
The 33 million university educated young professionals in developing countries is twice that in developed world
30% of net new jobs created between 2005 and 2020 will be in India; 14% in China
Economic
Political

6. DIFFERENT FUTURE SCENARIOS REQUIRE DIFFERENT AUSTRALIAN WORKFORCES
“FIRST GLOBAL NATION”
Australia capitalises on globalisation; promotes its internal diversity and ethnic tolerance; and boosts home-grown innovation and industry capability
“SOUND THE RETREAT!”
Globalisation stalls as political and social structures are not ready; trade barriers and nationalism re-emerge; we depend on bilateral national and commercial relationships
“BRAVE OLD WORLD”
Complacent, dependent on agriculture, tourism, “new” manufacturing and some biotech; clever people and companies move overseas
“GREEN IS GOLD”
We emerge from the growing imperative to protect the natural environment as a leading innovator of global environmental management
First Global Nation
describes a successful Australia which adapts with flair and flexibility to the globalisation of world business and the challenges of an online knowledge economy.
Sound the Retre a t
sees a world in which geopolitical instability and cultural and social backlash override the benefits of economic globalisation, forcing Australia to revalue its bilateral business relationships as multilateral ones became impossible.
Brave Old World
is a picture of Australia where our comfortable lifestyles, economic performance, adequate social security systems and laconic approach to the future conceal the need for strategic and concerted effort to make the transition to the global knowledge economy until it is too late.
Green is Gold
looks at how global agreements on environmental management imperatives play out in Australia for business and the community at large.
Source: Australian Business Foundation “Alternative Futures: Scenarios for Business in Australia to the Year 2015” Sept 1999

7. Why care about the global workforce?
“The working age population [in Australia] currently grows by 170,000 people a year. But trends already in place will see the working age population grow by just 125,000 for the entire decade of the 2020s…”
“Population Ageing and the Economy”
by Access Economics, Jan 2001, p.3
Therefore Australia will have to look overseas for many more workers to fill new jobs (if the economy keeps growing).

8. Overview of Supply and Demand Factors Shaping the Future Global Workforce
Industry
Structure
Types of
Organisation
Govt. Policies
Future
Workforce
Population
Demographics
Consumer
Preferences
Government Policies influence:
Industrial Relations
Subsidies and tax rates
Workforce participation rates
Supply of skills
Constraints (e.g. bans on uranium mining)
Social values influence lifestyle decisions determining where people choose to live and how much they choose to work and the employers of choice. Values also influence what people choose to buy - and from whom.
Type of organisation (encompassing technology, culture and org. structure) shapes the nature of jobs, their location and how jobs/people are linked together.
Industry structure encompasses industry mix; the nature of competitive forces; and the required skill mix.
N.B. Someone is not “in” the workforce in any meaningful way if they do not have skills that are in demand.
Social
Values

9. The Future Global Workforce: A Function of Supply and Demand
SUPPLY FORCES
Population demographics
Government policies influencing fertility rates
Education and health policies and infrastructure
Immigration flows
Climate change
DEMAND FORCES
Social/consumer values
Rate and nature of economic development
Income levels (purchasing power)
Technology
Nature of work organisation

10. Identifying The Relevant Global Workforce
Those able to move (in time)
Those attracted to your industry, organisation, location
Those reached by recruitment process
Those with desired skills and attributes
Global population of working age

11. The BRICs are Changing Everything
The entry of Brazil, Russia, India and China into the global market economy has doubled the size of the global workforce and dramatically changed its demographic profile (many more younger workers).
The halving of the capital/labour ratio increased the power of capital as many more workers competed to work with the world’s capital.
The level of wealth inequality in these countries has increased dramatically.
As BRIC firms move up the value chain they will require more highly skilled workers and will become global competitors for the West’s best knowledge workers. Their improving social infrastructure will add to their competitiveness. Their huge foreign reserves will also enable them to acquire skills through corporate acquisitions.
According to IT and the East: How China and India are Altering the Future o/Technology and Innovation, a book published earlier this year by a couple of US-based analysts, India is expected to add 71 million workers to the global labour pool and China 44 million over the next four years, compared with a projected 10 million additional workers in the US, none in Europe' and a decline of 3 million in Japan.
The US Bureau of Labor Statistics has said that 43% of the current US labour force will be eligible to retire before 2012.

12. China and India: Some Workforce Dynamics
The US currently graduates around 137,000 engineers each year. China graduates 351,000 and India 112,000 (from comparable curricula).
Thousands of talented Chinese and Indians now go overseas to study in Western universities leaving a shortage of skills at home and this (plus rapid economic growth) is driving up salaries.
China and India are starting to buy foreign companies to get access to the skills they need.
Survey shows that middle management salaries will rise by 16% in India and 9% in China this year. Increasing salaries (and better job opportunities) are starting to entice Chinese and Indians back to jobs in their home countries.
Source: “Asian giants have quantity not quality”, Australian Financial Review, 20 August 2007, p. 23

13. Big picture demographics: Global population (millions)
2004
2050
N.B. Largest growth in Asia/Oceania (ex China and India) category will be in Iraq, Palestinian Territory, Yemen, Afghanistan (all over 100% growth between 2006 and 2050)
Other simultaneous trends are:
Increasing average affluence but growing rich-poor polarisation
Declining fertility rates as affluence increases
Urbanisation – in 2008, for the first time, more than half the world’s population will live in cities.
Climate change threatens many large coastal cities raising the potential of large-scale migration (estimates are around 100 million people over the remainder of this century)
Oceania countries include: Australia, Fiji, New Zealand, Samoa, Tonga, PNG, Solomon Islands, etc
Asia (ex China and India) countries include: Israel, Iraq, Iran, Arab states, Brunei, East Timor, Singapore, Thailand, Vietnam, Japan, Korea (North and South), Pakistan, Bangladesh, Indonesia, Philippines, etc
Source: Population Reference Bureau, 2004

14. Global population by age (%)
under age 15
age 65 and over
N.B. Data are for 2004
More developed countries are (following the UN classification):
Europe, North America, Australia, Japan, New Zealand
Less developed countries:
All other regions and countries
Among developed countries, only the US is likely to see significant population growth – a result of higher rates of immigration and a birth rate higher than other developed nations.
About 90% of the growth in world population to 2050 will occur in developing countries in Africa and Asia (including China and India)

15. Global population aged 65 and over (%)
2007
2025
2050
Japan and Italy already have around 20% of their population over 65 years of age.
Source: Population Reference Bureau, 2007

16. Population aged 65 and over
Source: Population Reference Bureau, 2007

17. Australia’s ageing population (%)
2000
2025
2050
According to the ABS, in September 07, Australia’s total employment (F/T + P/T) was 10,611,700:
258,700 were aged 65 or more
495,400 were aged 60-64
866,900 were aged 55-59
2,3,983,400 were aged 45-54
…therefore 37.5% of the total number employed are aged 45 or older and will therefore be eligible to retire in the next 15 years.
United Nations “World Population Prospects” (2006)

18. How to Make Sense of the Changing Workplace?
Changing Expectations:
Gen X, Y, 60+
Employee Engagement
Multiple, Overlapping Networks
Employability vs. Job Security
Skills Shortages
Work/Life Balance
Information Overload
Changing IR Legislation
Multiple, Self-Directed
Careers
New Technology, New Energy
24/7/365 Anytime, anywhere
Collaborative Decision Making
Knowledge Workers Valued
Distributed Leadership
New Retirement
Options
Diversity in the Workforce
Leveraging Intellectual Property
Youth Workers
Two Speed Economy
Distance Collaboration
Global Competition + China, India
Physical & Data Security
Outsourcing
Corporate Social Responsibility
Sustainability

19. Shifts That Are Re-shaping Organisations and Work
FROM
Local markets, operations
Manufacturing, clerical work
Hierarchy
Intermediaries; face-to-face
Obedience to formal authority
Stability, efficiency, control
Full time job
Shareholder value
Work done by employees
Fixed work location
Management prerogative
Loyal service
White, young workforce
Financial performance
“Get a job” TO
Global markets, operations
Service, knowledge work
Networks
Direct access,virtual relationship
Questioning of formal authority
Change, creativity, flexibility, order
Part-time and project work
Stakeholder value
Work done by many contributors
Diverse work locations
Social licence
Marketable knowledge, skills
Diverse, ageing workforce
Multiple bottom lines
“Get a life”
The above list was generated by a group of HR and organisational change consultants in Sydney - August 2001

20. The changing locus of employment in Australia
Business Size
No. of Businesses
(excl. Govt & Finance/Insurance)
Employment
(end June)
Industry Value Added ($m)
Small
(1-19 persons)
773,953
2,341,180
169,805
Medium
(20-199)
37,202
1,780,984
126,732
Large
(200 and over)
2,945
2,626,428
237,462
Non-employing
1,551,112
1,360,922
62,705
TOTAL
2,365,213
8,109,513
596,704
72.6% of all small businesses had a sole operator (up from 68.5% in 2003); 25.1% had two operators (down from 29.0% in 2003)
67.5% of small businesses are home based (up from 58.3% in 1997).
67.1% of non-agricultural small business operators are full-time operators; of which 65.1% usually work hours each week; while the rest work more.
Source: ABS , Section 2.1, Data for

21. Emerging Organisational Paradigms on “the Edge”
STAKEHOLDER BASED CORPORATE GOVERNANCE PROCESSES
TERRORIST ORGANISATIONS SUCH AS AL-QAEDA
MULTI-AGENCY NETWORKS EMERGING TO FIGHT GLOBAL HEALTH THREATS SUCH AS SARS
SELF-ORGANISING COMMUNITIES CREATING OPEN SOURCE SOFTWARE SUCH AS LINUX; AND DATABASES SUCH AS WIKIPEDIA
GOVERNMENT POLICY MAKING AND DELIVERY IN A WORLD OF INCREASING DEMANDS AND SHRINKING RESOURCES
IN THE EMERGING “KNOWLEDGE ECONOMY”
Introduction to this and following slides:
If we can forecast the evolving nature of organisations and work and develop future scenarios for the global and Australian economies then we may be better placed to forecast the future characteristics of the global and Australian workforce.
Additional notes on this slide:
Three quarters of the workforce is now in the knowledge and services sector of the economy.
Most of the new jobs are being created in small and medium enterprises. These are the norm in the k-economy.
Richard Branson’s Virgin Enterprises (and AIM and AHRI) seem to operate a bit like Al-Qaeda with loosely (or moderately) connected cells that contain the intelligence of the whole but operate independently. They develop people from within through the doing of the work.
Open source programmers do it for the self-justifying “flow” experience of being involved in something that matters and that joins them with a community of others.
N.B. The network is the central organisational form in all of these emerging arenas of activity

22. MIT Scenarios Forecast Emergence of Networks in 21st Century
MIT Initiative on Inventing the Organizations of the 21st Century (January 1997) facilitated by Peter Schwartz of the Global Business Network:-
The scenarios were developed during by MIT academic and research staff in discussions with hundreds of executives at various MIT Symposia, executive education programs, etc.

23. FUTURE OF ORGANISATIONS: Scenario 1
VIRTUAL COUNTRIES
Keiretsu-like alliances with operating companies in every country
Minimal national allegiance - primary loyalty is to the corporation
Traditional hierarchy or decentralised divisional structure
Company is the focus for individual identity
Company meets employees’ needs from cradle to grave
Employees own the firm and have right to elect the Board and management
Open book accounting informs management elections
Specialist “organisational designers” travel through firm brokering partnerships and fostering cross boundary communication
Notes:
Most transactions are internal to the firm.
This form emerges because advantages of scale and control of IP outweigh the cost-efficiencies of external transactions, and the speed, flexibility of small company design.
Weak intellectual property legislation may also encourage this type of organisation.
It is argued that there would be very little fat in the system because of the open information flows and shared ownership.
Employee ownership may be via:
pension plans, stock options, participation contracts, partnership structures
Role of governments, industry unions is significantly reduced
Examples: Asea Brown Boveri; GE; Johnson & Johnson

24. Virtual Country HR
HR almost replaces social welfare, education systems and provides financial management and estate planning services, etc
Corporate (strategic) HR
sets standards and monitors the corporate culture
helps Marketing build the corporate brand
Divisional (operational) HR
total care of employees so they are free to focus on performance
Actively involved in local communities to reinforce the company culture and image
Selection emphasises fit with corporate values
Performance management focuses on results achieved the “XYZ way” and on being a company ambassador in all areas of life
Reward is via promotion, enhanced status, rights, benefits - and pay
Development is via corporate colleges and universities in partnership with the world’s best educational institutions
Innovation is through internal R&D and improvement programs with heavy emphasis on protecting corporate intellectual property

25. FUTURE OF ORGANISATIONS: Scenario 2
SMALL COMPANIES, LARGE NETWORKS
Autonomous teams of 1-10 people
Temporary - task or project based
Linked by high bandwidth, electronic network
Venture capital infrastructure identifies promising teams and provides financing
Independent organisations emerge for social networking, recreation, learning, reputation building and income smoothing
evolved from professional associations, unions, clubs, university alumnis, neighbourhoods, families, churches
they are home for our identity as projects come and go
Notes:
In this model most of the transactions are market based and external to the firm.
This form is driven by the lower cost and greater efficiency of external transactions. Speed, flexibility outweigh scale advantages.
The US Screen Actors Guild levies up to 30% of an actors base pay from movie producers to pay for health and pension benefits.
______________________________________________________
Examples:
Prato textile mills (Italy) - in 1990 there were over small firms averaging <5 people; with state of the art factories and warehouses.
Semco - spun off satellite companies that used the corporation’s facilities. The seemingly chaotic environment has only enhanced morale and performance in both the satellites and the core company.
Examples: Film industry; Prato Mills (Italy); Nike; Nokia PC Display Division

26. Your Organisation is the Network
Suppliers, Contractors
Employees
Govt Agencies
Unions, Associations
Shareholders, Investors
Your organisation’s workforce may be better thought of as a network of contributors; e.g. see my article on this at:
Business Partners
Community

27. Small Company, Large Network HR
Very specific in scope as far as the project organisation is concerned (e.g. talent scouting/selection, pay, health & safety)
Outsourced
agents, brokers, specialist providers
contract staff organisations handle the HR for their talent as part of their brand and competitive strategy
Individuals rely on professional associations, “guilds”, managers/agents
Mutual employment obligations spelled out in project contracts
Project Manager’s reputation depends on his/her people skills and hence there is a reluctance to delegate to HR specialists
Selection is via networks, personal references, reputation
Performance management is via peer pressure and industry/ professional standards
Rewards are contractual or entrepreneurial (equity based)
Development is via doing leading edge projects
Innovation is via brokers, deal makers, agents, sponsors

28. How are Networks Different?
Traditional Organisation
Formal authority
Rigid structure - power concentrated at “top”
Clear boundaries
Leadership responsible for control
Focus on contracted performance outputs
Money, status hold people in the system
Growth by expansion, acquisition
Scale gives economic power
Success measured in financial terms
Threatened by complexity, change
Network Organisation
Expert, relationship, symbolic power
Fluid structure - distributed power
Fuzzy boundaries
Leadership promotes order, linkages, emergent properties
Focus on commitment, psychological contract
Members held by values, synergy, higher order goals
Growth by cell replication and linkages to new cells
Power derives from symbols, stories, relationships
Success is resilience, impact, quality of relations
Nourished by complexity, change

29. Networks in the Knowledge Economy

30. The Leadership Challenge
The vast majority of the leadership and management literature presumes large, hierarchical organisational structures. Consequently, we know very little about how to lead and manage networks - and yet these are likely to proliferate in the future as large hierarchies consolidate, die out or are transformed.

31. FUTURE WORKER 2015: A “maverick” scenario
Extreme individualisation of work
Multiple expectations of work (e.g. Gen X, Gen Y, Baby Boomers, Migrants)
Global village with virtual teams
Inventiveness spreads into developing countries
More than 60 percent of jobs will be unique to a company
More collaboration, less alone time
Source: Gartner Research paper “Future Worker 2015: Extreme Individualization” 27 March 2006
Extreme Individualisation of Work - workers will customise the information, tools and resources they use - today's 45- to 55-year olds (also known as baby boomers) will lead a new wave of entrepreneurship and innovation
Multiple Expectations of Work (e.g. Gen X, Gen Y, Baby Boomers) - workers will have multiple expectations; will pursue multiple careers; and will be continuously creative
Global Village with Virtual Teams: - skilled workers will meet fewer than 30% of the members of their work community face to face
Inventiveness Spreads into Developing Countries - India and China already graduate around 500,000 engineers and scientists per year
By 2015, more than 60 percent of jobs will be unique to a company — that is, fluid, nonrepeatable and without comparison - corporate allegiance will decrease - trusted peer networks used to find unconventional work arrangements
More Collaboration, Less Alone Time - important to capitalise on social networks

32. Future Worker 2015
Key Conclusions
Future successful companies will have a symbiotic relationship with the future individualized workers, as opposed to an authoritarian relationship.
Companies that operate as if they own and control people will become obsolete.
No company will build or sustain a competitive advantage unless it capitalizes on the combined power of individualized workers and social dynamics.
Source: Gartner Research paper “Future Worker 2015: Extreme Individualization” 27 March 2006

33. Predictions of the Impact of Changes by 2015
High Probability     Low Probability 
Companies will have to completely revise their hiring and benefits practices.    
The average tenure at one job for skilled workers will be 18 months.   
Skilled workers will drive 80 percent of the technology acquisition decisions for their workplace.   
In highly developed countries, employees will see their managers face-to-face three times on average.  
A new breed of universities will perfect the concept of agile curriculum development.  
Seventy-five percent of corporate IT workers will be focused on supporting and enhancing cross-business processes.  
A new international legal definition of a business entity will include virtual employees, capital and a structure of accountability to replace a board of directors.  
Source: Gartner (March 2006)
Gartner stress tested the prediction of extreme individualisation under two different scenarios:
Scenario 1: Government funded benefits go bankrupt by 2015
Most likely outcome:
Small business soars: Skilled workers become disillusioned by big corporations and government. They take control of their own financial futures by creating smaller, independent businesses. Small businesses, worker individualism and workplace customization become the next work model (0.7 probability).
Scenario 2: Catastrophic health event (e.g. Avian flu)
Global communities flourish: The need to tap into skills and services drives businesses to initiate investments in globalization and worldwide inventiveness. Individuals reach out to global communities; the lines between corporations and global villages blur. The result is extreme individualism with users driving technology decisions. Virtual centers for innovation are created (0.6 probability).
Source: Gartner (March 2006)

34. The Changing Worker
Past
Future???

35. The drivers of increasing workforce diversity
Several generations at work as workforce age span increases
Increasing cultural and ethnic diversity as immigration fills skill gaps; and knowledge workers chase global opportunities
Attitudes of Gen Y and the retiring baby boomers – they both want work that fits their chosen lifestyles; and because of skill shortages they have market power
Companies must foster innovation to compete – and innovation is nurtured by diversity of ideas, knowledge, professional networks, perceptual and learning styles, problem solving styles, etc
But research highlights the critical moderating role of leadership, organisational culture and HR policies
“Research” reference (see last point in slide):
“Managing Diversity As a Key Organizational Resource: An Interview with David Thomas” by Kali Saposnick, Leverage Points, Issue 37, at
US research firm Catalyst in research released in October 2007 found that Fortune 500 companies with the highest representation of women among its directors attained significantly higher financial performance, on average, than those with the lowest representation of women on the board.

36. The moderating role of leadership and culture
Diversity X Leadership X Org. Culture = Performance
The leader must:
Allocate diverse team members appropriately
Educate the team about the important roles to be played by different skills, attitudes, knowledge, etc
Develop processes for positively managing tensions
And organisational culture and HR policies must:
Recruit, train and reward diversity
Develop leaders who manage diversity constructively

37. In Summary: A Possible Network Future
Most organisations produce or compete on the basis of knowledge and services (not things).
Most “organisations” are networks of teams and/or SMEs and encompass the entire community of stakeholders.
People skills, innovation and knowledge management skills are taught at schools and universities (these are taken for granted in the workplace).
People management systems become necessary (and invisible) organisational infrastructure; e.g. learning, change/transition management and diversity management become “real work”.
Leaders nurture networks and foster emergent order throughout the system (this is created by bottom-up action). Leader as ecologist vs. engineer or combat commander.
Work teams, informal self-help networks and formal professional associations take over much of the old HR role (e.g. in finding jobs; sharing knowledge; recognising success).
Examples of network organisations:
Motley Fool and Change Wave investment network
User groups, consumer groups for products and services
Self-organising distribution channels - eBay
Professional associations - they recognise success (AHRI awards, film and TV awards) and develop skills and offer financial benefits
Political parties and lobby groups
Parents and Citizens Associations