The tech industry continues to be a bellwether of workforce transformation, according to WTW’s Dynamics of Work Survey. However, many are not prepared for new risks coming their way. The survey sheds light on the current state of business and dives into how tech companies can keep pace with changing work conditions, new talent sources and the increasing use of automation.
WTW’s Dynamics of Work Survey looks at the strategies, plans and actions organizations are pursuing this year and beyond.
Tech companies, by design innovative, agile, and driven by rapid technological advancements, are naturally positioned to be leaders in workplace transformation. New ways of working present opportunities for companies to create new business models and unlock value by leveraging new and unconventional sources of talent, developing new products and services and increasing operating efficiencies.
Despite recent high-profile layoffs, the demand for key talent continues to outpace supply in the tech industry. Generative AI, edge computing and data fabric architecture (and other technology skills) drive competition for top Skills in Demand (SiD), such as software development and data analysis, and emerging Jobs in Demand (JiD), including AI Engineers and Data Protection Officers.
Some of our tech company clients that embrace flexible work arrangements are benefiting from attracting (and retaining) a broader pool of talent, including highly skilled employees who value work-life flexibility or live far from company office locations.
Similarly, companies that leverage alternative talent sources are tapping into diverse skill sets that might not be available or cost-effective to source in-house. The relative on-demand nature of some of these new talent sources also provides scalability benefits, especially for project-based work or other short-term needs.
Efficiency and scalability are also the clear benefits reaped by companies increasing their use of automation. By automating mundane and some knowledge-based tasks, robotics and machine learning, for example, can empower employees to focus on higher-value work and make better decisions informed by data and insights.
Even among tech companies, there is groundwork to be done. Despite being better prepared than other industries, relatively few tech companies are poised to adapt to new ways of working:
Unprepared companies may find it difficult to manage specific risks associated with the changing work landscape:
Only 41% of tech companies report they are effectively managing all three of these risks. This group of “prepared” companies is more likely to perform better than those that are unprepared. Over the past year, companies that are effectively managing all three risks are:
As the world of work evolves ever-increasingly, even tech companies will need to be prepared to deal with these changes or risk being left behind. In fact, in no other industry are the three risks mentioned earlier greater than in technology due to the interconnectedness of the industry and the creative destruction of capital that is the hallmark of technology. We recommend tech (and all other) companies:
We have observed these strategies in action. In one instance, a technology company increased its remote work flexibility options for their employees globally, leading to a simplified global pay structure that facilitates talent mobility by reducing the number of regional pay zones from five to four. In another case, a financial services company has differentiated its total rewards philosophy for its digital hub, where the talent value proposition now has a stronger emphasis on variable pay and agile career development for “hot” skills for shorter work assignments, as compared to its longer career progressions approach for traditional roles.
The dynamics of work are truly changing, and this will likely mandate greater flexibility, adaptation and innovation in Work and Rewards. In some cases, embracing flexible work, new talent sources and automation technologies are no longer optional but essential. Companies, especially in the tech industry, should act now to unlock opportunities for value creation and mitigate the people, business and operational risks involved with such change. Success hinges on understanding and catering to employee preferences, redesigning jobs and career frameworks, reskilling employees, being intentional about culture, aligning rewards with evolving needs, and facilitating internal and external communication.
