EMPLOYABILITY & LEARNING CULTURE

A New Future of Work: The Race to Deploy AI and Raise Skills in Europe and Beyond | McKinsey Global Institute (2024) | This report explores how AI, automation, and other trends will reshape labour markets in Europe and the US by 2030, driving the need for new skills and occupational transitions.

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✨ OVERVIEW

This report examines the future of work in Europe and the United States through 2030, focusing on the impact of AI, automation, and other key trends. It projects that up to 12 million occupational transitions may be needed in both regions by 2030, driven primarily by technological advancements. The analysis suggests that demand for STEM and healthcare professionals could grow significantly while office support, customer service, and production work roles may decline. The report emphasises the need for a significant skills upgrade, with increased demand for technological, social, and emotional skills. It also highlights the potential for accelerated productivity growth if countries embrace technology adoption and proactive worker redeployment.

🧩 CONTEXT

Europe and the United States face tightening labour markets and a slowdown in productivity growth. This challenging backdrop sets the stage for significant shifts in labour demand spurred by AI and automation. The advent of generative AI is expected to mark a paradigm shift, accelerating the automation potential of complex cognitive tasks. Factors such as the push for net-zero emissions, ageing demographics, and the rise of e-commerce are poised to reshape employment landscapes. These trends present opportunities for productivity growth and challenges in workforce adaptation, necessitating strategic responses from businesses and policymakers.

🔍 WHY IT MATTERS

↳ Productivity growth potential—Embracing accelerated technology adoption with proactive worker redeployment could help Europe achieve an annual productivity growth rate of up to 3% through 2030, compared to just 0.3% with slow adoption and redeployment.

↳ Massive scale of workforce transitions—By 2030, Europe could require up to 12 million occupational transitions, double the pre-pandemic pace. In the United States, required transitions could reach almost 12 million, which aligns with historical norms.

↳ Shift in skills demand—Demand for technological skills could increase by 25% in Europe and 29% in the United States by 2030, while demand for social and emotional skills could rise by 11% and 14%, respectively.

↳ Risk of labour market polarisation—Without effective redeployment and reskilling, there's a more polarised labour market, with more higher-wage jobs than workers and too many workers for existing lower-wage jobs.

↳ Net-zero transition impact—The net-zero transition could result in 3.0 million gross job displacements in Europe by 2030, offset by potential gross gains of 4.5 million to 5.0 million jobs, primarily in renewable power, construction, and electric vehicles.

💡 KEY INSIGHTS

↳ Automation potential varies across occupations—With generative AI integration, automation of work hours for STEM professionals in Europe could more than double from 13% to 27%. At the same time, for education and workforce training roles, it could triple from 6% to 21%.

↳ Geographic variations in impact—While the scale of occupational transitions is broadly similar across countries (ranging from 6.0% to 7.4% of employment), there are notable differences in the mix of occupations affected, reflecting each country's economic structure and wage levels.

↳ Healthcare demand surge—Ageing populations and increased healthcare spending are expected to significantly boost demand for healthcare-related services, with the elderly population in Europe projected to reach 94 million (18% of the overall population) by 2030.

↳ E-commerce reshaping retail employment—The continued growth of e-commerce will likely increase demand for logistics and warehousing workers while decreasing demand for in-store occupations.

↳ Skills shift—Demand for technological skills could see substantial growth in Europe and the United States (increases of 25% and 29% in hours worked by 2030 compared to 2022) under the faster midpoint scenario of automation adoption.

🚀 ACTIONS FOR LEADERS

↳ Invest in workforce reskilling—Develop comprehensive learning programmes that include formal training, on-the-job learning, and self-directed study opportunities. Ensure these programmes are accessible to all employees and align with individual career goals and organisational objectives.

↳ Embrace AI and automation strategically—Identify areas where AI and automation can enhance productivity and create new opportunities. Develop a clear strategy for technology adoption that considers both the potential benefits and the impact on the workforce.

↳ Foster adaptability and resilience—Create a culture that embraces continuous learning and adaptability. Encourage employees to develop a growth mindset, provide opportunities to acquire new skills, and take on new challenges.

↳ Prioritise social and emotional skills—Recognise the growing importance of social and emotional skills in the workplace. Invest in developing these skills among employees, particularly in roles that require high levels of empathy, leadership, and interpersonal interaction.

↳ Plan for occupational transitions—Develop strategies to support workers transitioning between occupations. This may include retraining programmes, career counselling, and partnerships with educational institutions to create pathways for workers to move into growing fields.

🔗 CONCLUSION

The future of work in Europe and the United States is poised for significant transformation, driven by technological advancements, demographic shifts, and environmental imperatives. While the scale of required occupational transitions may seem daunting, both regions have demonstrated their ability to navigate even higher labour market shifts during the COVID-19 pandemic. The key to success is embracing technological change while proactively investing in workforce development. By doing so, countries can unlock substantial productivity gains and create better societal outcomes. However, failure to act decisively could result in slower productivity growth and a more polarised labour market. As we stand at this critical juncture, the choices made today will shape the economic landscape and determine the quality of work life for millions in the years to come.

🎯 KEY TAKEAWAY

Embracing technological change and investing in workforce skills are not just options but imperatives for unlocking productivity growth and ensuring inclusive economic progress in Europe and the United States.

PEOPLE EXPERIENCE & ENGAGEMENT

Employee Experience Report 2024: Humanised Growth In A Digital Era | KennedyFitch (2024) | This report examines the current state and future trajectory of Employee Experience (EX) initiatives across industries and organisations globally, offering insights on where to focus efforts and investments to enhance EX.

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✨ OVERVIEW

The Employee Experience Report 2024 by KennedyFitch provides a comprehensive analysis of EX initiatives globally. Building on previous studies from 2017 and 2020, the report reveals significant progress in EX adoption and maturity, highlighting persistent and emerging challenges. Key findings include a substantial increase in EX adoption, with 82% of respondents actively engaged in EX initiatives. The report emphasises EX's growing strategic importance, with 72% of respondents reporting directly to the CHRO/CPO or just one level below. It also highlights the shift towards treating EX initiatives as products to be developed and continuously improved, allowing for more agile development and closer alignment with business needs.

🧩 CONTEXT

As companies navigate the complexities of the modern workplace, including remote work trends and changing employee expectations, Employee Experience has emerged as a critical factor driving business value in attracting, retaining, and engaging top talent. The concept of EX has evolved from a novel idea about a decade ago to a more strategic function for many organisations. While progress is evident, significant opportunities remain for growth and refinement in EX strategies. The increasing focus on data-driven approaches, cross-functional collaboration, and advanced technologies suggests that EX will continue to evolve and gain prominence in shaping organisational success.

🔍 WHY IT MATTERS

↳ Strategic importance of EX—EX is increasingly viewed as a strategic function, with 72% of respondents reporting either directly to the CHRO/CPO or just one level below, underscoring its growing importance within organisations.

↳ Cross-functional collaboration—An overwhelming 92% of organisations working on EX engage in collaborative efforts, with HR (96%), Marketing & Communications (69%), and IT (67%) being the most frequent collaborators.

↳ Skills gap in emerging technologies—While project management (81%), analytical skills (78%), and survey management (76%) are currently the most used skills, there's a significant gap in AI and Machine Learning skills, with only 24% of respondents currently possessing these skills.

↳ Shift towards advanced analytics—Only 26% of organisations currently use predictive tools such as Python, R, or other advanced analytical tools or AI solutions, indicating a significant opportunity for growth in this area.

↳ Leadership buy-in challenges—Lack of budget (54%) and insufficient leadership buy-in outside HR (41%) are the top anticipated obstacles for EX in the next 12 months.

💡 KEY INSIGHTS

↳ EX adoption varies across industries—Finance & Insurance (92%), Professional Services (93%), and Technology & Telecommunications (93%) lead in EX adoption, while Healthcare & Pharmaceuticals (74%), Manufacturing & Construction (72%), and Retail & e-commerce (77%) lag behind.

↳ Organisation size impacts EX maturity—All large organisations (50,000+ employees) surveyed have initiated EX efforts, with 94% implementing EX practices and 44% fully embedding EX, compared to 13% and 8%, respectively, in 2020.

↳ Focus areas are shifting—Onboarding (74%), organisational culture and behaviours (66%), and training and development (51%) are the top current focus areas for EX initiatives.

↳ Future skill priorities—AI and Machine Learning (57%), Change Management (46%), and Advanced Analytical Skills (45%) are identified as the top future skill priorities for EX professionals.

↳ Tools evolution—Survey management platforms (83%), reporting tools and dashboards (62%), and company social and communications platforms (60%) are currently the most used EX tools. Still, there's a growing interest in predictive tools and AI solutions for the future.

🚀 ACTIONS FOR LEADERS

↳ Invest in AI and advanced analytics—Develop AI, Machine Learning, and advanced analytics capabilities to enhance EX strategies and decision-making processes. This could involve training existing staff or hiring specialists in these areas.

↳ Foster cross-functional collaboration—Create dedicated cross-functional teams to drive EX initiatives, ensuring alignment across HR, IT, Marketing & Communications, and other relevant departments. Implement regular cross-departmental meetings and collaborative projects.

↳ Develop a clear EX vision and strategy—Articulate a compelling EX vision and strategy that aligns with overall business objectives to secure leadership buy-in and necessary resources. This should include clear goals, metrics, and timelines.

↳ Prioritise skill development—Invest in upskilling and reskilling programmes to bridge the gap in critical EX skills, particularly in areas like AI, Machine Learning, and advanced analytics. Consider partnerships with educational institutions or online learning platforms.

↳ Adopt a product-based approach to EX—Treat EX initiatives as products to be developed, launched, and continuously improved. This will allow for more agile development and closer alignment with business needs. Implement agile methodologies and regular feedback loops in EX projects.

🔗 CONCLUSION

The Employee Experience Report 2024 highlights significant progress in EX adoption and maturity across organisations globally. However, it also reveals persistent challenges and opportunities for growth. As EX continues to evolve, organisations that can effectively leverage data, design thinking, and cross-functional collaboration to create impact for people and businesses will be best positioned to create meaningful and impactful employee experiences. The shift towards more personalised, real-time, and integrated approaches to EX, coupled with the growing importance of AI and advanced analytics, suggests that EX will play an increasingly critical role in shaping organisational success in the years to come.

🎯 KEY TAKEAWAY

To succeed in the evolving landscape of Employee Experience, organisations must embrace a strategic, data-driven approach that leverages advanced technologies, fosters cross-functional collaboration, and continuously adapts to meet changing employee expectations and business needs.

PEOPLE SUSTAINABILITY STRATEGY & REPORTING

🎯 PEOPLE SUSTAINABILITY STRATEGY & REPORTING 🎯 | Sustainable People Practices: A Framework to Empower Tomorrow's Workforce to Be Net Better Off | CIPD Ireland (2024) | This framework guides embedding a culture of sustainability in people practices, aiming to support and develop employees to be 'net better off' in terms of health and employability.

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✨ OVERVIEW

The CIPD Ireland's Sustainable People Practices framework provides a comprehensive approach to embedding sustainability in HR practices. It emphasises the critical role of people professionals in building responsible organisations and delivering on sustainability ambitions. The framework outlines five key pillars: workforce for the future, people practices and processes, culture leadership and strategy, governance risk and regulation, and community and social impact. It aims to guide organisations in creating a culture where employees are supported and developed to be 'net better off' in health and employability while aligning with broader sustainability goals. This approach enhances employee well-being and contributes to organisational resilience and long-term success in an increasingly sustainability-focused business environment.

🧩 CONTEXT

As organisations face increasing pressure to address sustainability challenges, there is a growing recognition of the need to apply a sustainability lens to people practices. This framework responds to the demand for guidance on how to embed a culture of sustainability within organisations, focusing on the role of HR in driving positive outcomes for both employees and the broader community. It reflects a shift towards more holistic approaches to organisational success that consider environmental, social, and governance (ESG) factors alongside traditional business metrics. The framework acknowledges the evolving expectations of employees, investors, and society, positioning sustainable people practices as a key driver of organisational performance and societal impact.

🔍 WHY IT MATTERS

↳ Strategic alignment with sustainability goals—The framework enables HR professionals to align people practices with broader organisational sustainability objectives, ensuring that human capital management contributes positively to economic and environmental outcomes. This alignment can lead to improved organisational performance and enhanced reputation in the market.

↳ Enhanced employee value proposition—By focusing on making employees 'net better off', organisations can improve their ability to attract, retain, and engage top talent in an increasingly competitive labour market. This approach addresses the growing demand from employees for purposeful work and sustainable workplace practices.

↳ Improved organisational resilience—Implementing sustainable people practices helps build a more adaptable, future-ready workforce better equipped to navigate changing business landscapes and societal expectations. This resilience is crucial for long-term organisational success and sustainability.

↳ Positive societal impact—The framework encourages organisations to consider their broader impact on communities and society, potentially enhancing their reputation and social licence to operate. This can lead to stronger stakeholder relationships and increased support for the organisation's activities.

↳ Compliance and risk management—By integrating sustainability into people practices, organisations can better manage risks related to human capital and ensure compliance with evolving ESG regulations and standards. This proactive approach can help mitigate legal and reputational risks associated with non-compliance.

💡 KEY INSIGHTS

↳ Holistic approach to sustainability—The framework emphasises that sustainable people practices encompass environmental concerns and social and governance aspects, requiring a comprehensive approach to HR strategy. This holistic view ensures that organisations address sustainability in all its dimensions.

↳ People professionals as change agents—HR practitioners are positioned as key enablers of sustainability initiatives, responsible for creating the cultural conditions for more 'socially conscious' organisations. This highlights the strategic importance of HR in driving organisational transformation.

↳ Data-driven decision-making—The framework highlights the importance of providing key data and insights to ensure compliance with ESG and sustainability reporting requirements, emphasising the need for HR to develop strong analytical capabilities. This data-driven approach enables more informed and practical sustainability strategies.

↳ Cross-functional collaboration—Implementing sustainable people practices requires collaboration across various organisational functions, including HR, sustainability teams, and senior leadership. This collaborative approach ensures a more integrated and effective implementation of sustainability initiatives.

↳ Focus on long-term value creation—The framework encourages organisations to look beyond short-term gains and consider the long-term benefits of investing in sustainable people practices for both the business and its employees. This long-term perspective aligns with the principles of sustainable development and responsible business practices.

🚀 ACTIONS FOR LEADERS

↳ Conduct a sustainability audit of HR practices—Assess current people practices against the five pillars of the framework to identify areas for improvement and alignment with sustainability goals. This audit can be a baseline for developing a comprehensive sustainable people strategy.

↳ Develop a sustainable people strategy—Create a comprehensive plan that integrates sustainability principles into all aspects of the employee lifecycle, from recruitment to retirement. Ensure this strategy aligns with and supports the organisation's overall sustainability objectives.

↳ Invest in sustainability skills development—Provide training and development opportunities for HR professionals and employees to build capabilities in sustainability-related areas. This could include workshops on ESG principles, sustainable leadership practices, and the integration of sustainability into daily work processes.

↳ Establish sustainability metrics and reporting—Implement systems to track and report on key sustainability metrics related to people practices, ensuring alignment with broader ESG reporting requirements. Review and communicate progress regularly to stakeholders to maintain transparency and accountability.

↳ Foster a culture of sustainability—Lead by example and actively promote sustainable behaviours and decision-making throughout the organisation, embedding sustainability into the company's values and day-to-day operations. Encourage employee-led sustainability initiatives and recognise contributions to the organisation's sustainability goals.

🔗 CONCLUSION

The CIPD Ireland's Sustainable People Practices framework represents a significant step towards integrating sustainability principles into core HR functions. A structured approach to embedding sustainability in people practices offers organisations a pathway to create long-term value for employees, the business, and society. As sustainability continues to gain prominence on corporate agendas, this framework equips HR professionals with the tools and insights needed to drive meaningful change and contribute to a more sustainable future. The success of this approach will depend on the commitment of leadership, the engagement of employees, and the ability of organisations to adapt and innovate in response to evolving sustainability challenges and opportunities.

🎯 KEY TAKEAWAY

Embracing sustainable people practices is an ethical and strategic necessity for organisations seeking to thrive in an increasingly sustainability-focused business environment. It requires a fundamental shift in how HR functions approach their role in driving organisational success and societal impact.

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