From AI to productivity: Why 2024 will belong to people-focused businesses
In 2024, businesses will find themselves compelled to prioritise the wellbeing and satisfaction of their employees. Here’s why.
It’s likely that by the time you log off work today, you will have used generative AI (GenAI) for at least some part of your job. At least that’s what McKinsey’s State of AI in 2023 report says; the report reveals that 60% of businesses use GenAI in at least one of their functions, with 40% expecting to increase their investment in AI technology.
It has been a breakout year for AI, and the progress it has brought to job functionality and efficiency. However, as we anticipate the wave of AI advancements over the coming weeks and months ahead, we cannot forget our most important business asset — our people.
In the wake of the Great Resignation and the slew of tech company layoffs we have seen this year, 2024 is poised to become the year of people-centric businesses. Organisations will find themselves compelled to prioritise the wellbeing and satisfaction of the individuals constituting their workforce.
Gartner research from March 2023 highlighted that “the management principles underlying the employee value proposition (EVP) are outdated“. It found that while 82% of employees felt it important for their organisation to see them as a person, not just an employee, only 45% of employees believed their organisation actually saw them this way.
Ultimately work is a subset of life, not separate from it. Concentrating on the people in your business takes some considerations:
The AI effect
2023 will go down in history as the year that GenAI hit the mainstream, with the public release of ChatGPT in November 2022. As with other major technology developments, the flow-on effect of GenAI means that businesses will end up with a smaller or more consultative workforce. We saw the same shift as typewriters became word processors and eventually personal computers. Very few organisations have “typing pools” today — the former “secretarial” role has changed beyond recognition from a few decades ago.
With a smaller workforce, businesses will need to prioritise what staff they keep. This new workforce will need to be even more in tune with consumers, more strategic, more consultative, and above all more horizontal in their knowledge of the business, as opposed to deep, vertical expertise.
This will have implications for future hiring policies. Businesses will need to start reassessing if they need extensive industry experience, or whether they start looking further afield and prioritising experience that displays critical thinking and problem-solving skills. According to Microsoft’s 2023 Work Trend Index report, businesses will also increasingly need employees who have a creative mindset because AI is unable to successfully automate that skill. They will also need workers who fully embrace AI so that tasks can be effectively delegated and further creativity can be unleashed.
Navigating the generational divide
Australia’s workforce currently consists of people born from the late 1950s to the early 2000s. It’s a truly intergenerational workforce that has very diverse values and priorities. Someone newly entering the workforce is a true “digital native” — never having lived a life without easy access to the internet and social media.
The concept of the traditional Australian dream is also now somewhat redundant. In previous generations, it was normal to find a job for life, buy a house, raise a family, and retire after forty years. Now, with lifespans and living costs increasing, prolonged retirement is unsustainable. The housing affordability crisis has put property ownership beyond reach for many.
These pressures have meant a stronger shift to the pursuit of passive income. Share and crypto trading, drop-shipping, and creative royalties have all seen a surge in interest. Not only will employers be competing with other businesses for workers, but also the increased lure of passive self-employment.
How can businesses prepare for this? Will it mean increased job-sharing to give people more time off for their own pursuits? Or company-funded financial planning for side businesses? Or simply allowing employees to pick what benefits they need to make work feasible?
It also means rethinking the fundamentals of work life, starting with the four-day work week. Global trials are already indicating that a shorter work week results in significant boosts to productivity and financial savings. We may only be at the trial stage but in a decade’s time, when the next generation enters the workforce, four-day work weeks may well be the standard.
Reassessing productivity metrics
In August this year, WFH Research’s latest working paper pointed towards a 10%-20% decrease in productivity for fully remote workers. This is potentially concerning considering that 15% of employees in Australia and New Zealand report always working apart from their co-workers.
But these findings only tell half the story. Productivity is a multifaceted beast. While productivity is closely linked to growth, flexibility is linked to employee attrition. Businesses need to ask themselves what something drastic like a full-time back-to-office mandate will actually cost them. Productivity may temporarily increase growth by a certain percentage but likely so will attrition. The most skilled people, with the greatest ability to find new employment or even self-employment, will be first out of the door.
In Australia, nearly 90% of employers have implemented mandatory in-office days, according to research by recruitment agency Robert Half. About 19% of employers insisted on five days a week, 28% on four days, and 26% on three days. Almost a third of respondents reported at least one employee quitting in response.
The challenge for businesses is deciding between a motivated, passionate, caring workforce who now use their former commuting time for exercise or childcare, versus the impact of bringing everyone back to the office. We know that happier staff result in superior customer service which results in higher customer satisfaction and loyalty. So there’s a significant business imperative to be more people-focused.
As GenAI’s adoption spreads and the world contends with the evolving dynamics of the workforce 2024 is emerging as a pivotal year for businesses to recalibrate and centre their strategies around people. The evolving nature of work and the diverse values of a multigenerational workforce necessitate a reevaluation of traditional practices and a shift towards people-centric, innovative, and adaptive approaches. It’s a year where businesses must strike a delicate balance between leveraging AI’s potential and nurturing their most valuable resource — their people — to ensure sustainable growth and enduring success.
Martin Filz is the CEO of Pureprofile.
