It’s easy to say that we live in uncertain times, without giving any thought to times past. Life, and business, have always been uncertain. Farmers sowing their crops could never predict whether the coming summer would bring blight or some ravaging army. They just had to get on with it.
Indeed, compared to 2020 (or 1914, or 1348), 2024 is actually looking relatively predictable, at least on a macroeconomic level. There is consensus that interest rates will not reduce to previous levels, squeezing both business and consumer credit across the year, and leading to modest growth at best.
At the same time, we will almost certainly continue to see impressive technological developments and continued focus on the climate crisis.
With these conditions in mind, we are already seeing several trends that could have important implications for people strategy.
1. Remote working retracts
The great work-from-home experiment has been running for nearly four years now, and the results are in. Most companies are showing a clear preference for their employees to work in the office most of the time, with an increasingly large subset calling everyone in all the time, including recently Skype and THG. Advertisements for fully remote jobs are rare.
Many will welcome this trend, which represents a break from the 2021-22 hybrid work era. Sharing a workplace certainly has advantages, around learning on the job, social interaction, collaboration and the ability of leaders to influence culture.
But beware throwing the baby out with the bathwater.
For many people, the flexibility of the past few years has been a blessing. Working parents in particular have been able to make their job fit their lives, rather than the other way around.
Many benefit in this continued cost of living crisis from the ability to save on commuting costs and wraparound childcare. Some went as far as to move away, or take jobs at a distance, because they were offered flexible contracts.
Rigidly insisting on office working therefore risks missing out on a lot of good people, as well as disenfranchising those who remain: giving someone a choice about where to work, and then taking it away again, will strike many as showing a lack of trust.
2. Equity forms a bigger part of benefits packages
Start-ups have long paid executives in equity, as a way to access skills and experience that they would struggle to afford otherwise. We’re seeing investee (PE/VC) companies in particular trying to tighten their belts, so it’s not surprising that shares are forming a larger proportion of compensation packages.
The beauty of this strategy is not just that it keeps costs down in the short term without sacrificing quality, but also that it encourages a sense of ownership and results orientation in employees, senior or otherwise.
Again though, there can be unintended consequences. Young people with no financial or family commitments may be willing to forgo their salary today in exchange for a stock windfall in a few years. Indeed the savviest candidates treat it like an investment decision, assessing the realistic risks and rewards, and comparing with more conventional packages elsewhere.
But not everyone is in a position to take that risk, particularly with mortgage rates as they are. The danger is that you unwittingly limit the pool of individuals available to you. We’ve happily fought for clients in this situation but ultimately the market and the individual determine the likely success of this strategy.
3. AI faces a backlash
The rise of generative AI was one of last year’s big stories, and the smartest companies have given considerable thought to whether and how it could improve their capabilities and/or productivity.
But a clumsy use of AI – as a way of automating jobs to save a quick buck – is unlikely to pay off.
You see this in customer service especially. Good AI can effectively direct most people to the answer they’re looking for, though there will still be cracks to fall through. But badly designed AI just automates poor service.
Time and again you hear of customers driven to frustration by chatbots that can’t (or seemingly won’t) answer their question, and websites that send people in circles, when all they want to do is talk to a human being who can use their brain.
Already we’re seeing backlash. Last year, Booths supermarket ditched self-service checkout screens in favour of cashiers behind tills, because they say that’s what their shoppers wanted. We’re expecting to see more customer-centric decisions, as businesses realise that even tech-savvy consumers value human contact, particularly in customer services; and if not, they walk away!
None of this is to say that companies shouldn’t invest in AI, or ask their people to work in the office, or pay their new chief data officer partly in stock. But it does mean that if you decide to go down these routes, you should do so with your eyes open.
There are no magic bullets. Think carefully about whether you’re willing to accept the possible consequences, and have a plan for mitigating them.
Is there a way of making office attendance the norm again without treating people like truants for wanting to work at home sometimes? Is there a way AI can improve outcomes and save money without stripping humans entirely out of the equation?
Like most things, success will depend on having a well-considered strategy, and then executing it well. And that’s something that’s as true in 2024 as it ever was.