Five ways the modern workplace is changing

The rise of flexible working patterns, and how digitalization and AI are shaping the future of work.

Explainer Published 20 April 2023 3 minute READ

Chatham House’s Future of Work 2023 conference brought together business leaders, INGOs, and academics to discuss labour market trends, advances in tech and AI, and the skills needed to ‘future-proof’ workforces.

These are five key insights from the event. 

1. Flexible working is here to stay.

‘There is no going back’ to the way we worked before, says Alexia Cambon, senior director of modern work at Microsoft. ‘Flexibility is no longer seen as a perk by employees, but as a right.’

Flexible working has produced a ‘crisis of trust’ and a ‘productivity paranoia’ in employers, but there needs to be a mindset shift and recognition that ‘performance does not equal presenteeism.’ Cambon adds that flexibility also brings out the best in a diverse and underrepresented pool of talent.

Patrick Hull, vice president of future of work at Unilever prefers to speak of a ‘great reassessment’ rather than ‘great resignation’ as employees now expect a consideration of their whole life, well-being, family, growth, and potential. ‘Employees come into the office as whole people,’ he says, ‘and employers should recognize this.’

Flexibility is no longer seen as a perk by employees, but as a right.

Alexia Cambon, senior director of modern work, Microsoft

Bill Schaninger, McKinsey & Company’s senior partner from Philadelphia, identifies the mismatch between workers and their companies when it comes to ‘return to office’ mandates, saying that employers are ‘missing an opportunity to really rethink the workplace. Flexibility isn’t a 1 or a 0.’

Such mandates are a ‘fool’s errand’, says Schaninger, adding that the language of ‘return to work’ could be offensive. ‘Most people were working the entire pandemic.’

2. The four-day work week benefits employees and employers.

Recent trials of the four-day work week in the UK and around the world have yielded positive results, both for workers and businesses. Productivity levels stayed the same or even increased and employees reported higher morale and improved work-life balance. 56 of 61 employers in a recent UK trial decided to continue with the shorter working week.

Alexia Cambon says: ‘We don’t want to squeeze five days of work into four, but it can be an attractive model.’

‘A shift in the work model requires a shift in the way we work,’ says Bill Schaninger  ‘We need to get rid of presenteeism.’

According to Patrick Hull, recent trials in Australia and New Zealand show the reality is ‘many people aren’t spending that much time being creative and innovative at work’ and the four-day work week can be an opportunity to ‘think about your work in a different way.’

3. All jobs will be powered by digital.

The skills people need for the future will be different to those needed in the past.

Liz Williams, CEO of FutureDotNow, highlights that millions of people in the UK lack digital skills the government deems as essential, such as accessing payslips digitally, submitting expenses online, and updating privacy settings.

Almost 60 per cent of UK workers cannot perform some of these tasks and, even in the technology sector, 33 per cent of employees don’t have all the skills needed in a digital world. 

‘If we don’t fix this, our (economic) recovery will be weaker’, says Williams. ‘It’s important to challenge assumptions. Employers should look at the digital skills gaps in their organizations and help their employees build them.’

4. Inclusive labour markets are key to healthy societies.

The COVID-19 pandemic disrupted women’s inclusion in the labour force and set back many hard-won gains in diversity and inclusion.

Saadia Zahidi, managing director at the World Economic Forum, says creating more ‘good work’ opportunities can help to alleviate exacerbating inequalities, citing the WEF’s five principles for what ‘good work’ looks like:

‘Promote fairness on wages and technology; provide flexibility and protection; deliver on health and well-being (this was front and centre during the pandemic); drive diversity, equity and inclusion; and foster employability and a learning culture.’

The COVID-19 pandemic disrupted women’s inclusion in the labour force and set back many hard-won gains in diversity and inclusion.

Saadia Zahidi, managing director, World Economic Forum

The University of the Arts London has introduced equal parental leave as a progressive policy update.

 ‘I’m excited that some of our students will see their male teacher disappear for six months to look after his baby,’ says Polly Mackenzie, chief social purpose officer at the university:

‘There is a huge opportunity for educational institutions to model the inclusive labour markets we would like to see. We don’t need employers to be everything to everyone. It’s more about there being a place for everyone.’

5. Developing AI in a strictly market-driven way harms workers.

AI-based workplace surveillance and productivity measuring tools are driven by the market and preference of companies rather than ethics, according to Nikki Sun from Chatham House’s Digital Society Initiative

China digitized society cont.

She says this is especially prevalent in China, where there is a lack of legal safeguards on privacy, weak labour unions, and an increasingly digitized society. Sun warns that powerful AI technologies can create greater power imbalance between workers and employers:

‘There is no clear boundary between the personal and the professional. Some companies have access to browsing history on personal devices and can track the real time location of workers. This gives a huge advantage to employers during a labour dispute or a negotiation over a pay rise.’

AI can be good for work, but it needs to be developed in a more responsible way and at a gradual pace.

Nikki Sun, Digital Society Initative, Chatham House

Sun has interviewed knowledge and manual workers in China who reported feeling stressed knowing they were being constantly monitored. They often worked excessive hours to be considered a ‘good worker’ on AI-driven reports, stirring up competition between employees while not necessarily improving job quality.

To avoid such workplace dystopia, Sun stresses the importance of putting human beings at the centre of development:

‘AI can be good for work, but it needs to be developed in a more responsible way and at a gradual pace. Products should be evaluated beforehand by multiple stakeholders and social impact should be carefully considered as part of the research and development process. It’s hard to go back once the damage is done.’