Executive Summary: ISG Provider Lens™ Future of Work - Services and Solutions - U.S. 2022
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U.S. clients are reassessing their future of work strategies.
After adapting to the changes brought upon by the pandemic in the last two years, enterprise clients in the U.S. are reassessing their strategies for transforming their workplaces. The Microsoft Future of Work study 2022 shows that many enterprises in the region are now embracing hybrid work models while maintaining the post-COVID norms.
Hybrid work model is now a reality; however, employees are witnessing both positive and negative effects of working away from their office premises. Although working from office can increase socializing and employee engagement, it has been observed through multiple research studies that employees in the U.S., in general, prefer working from the location of their choice because it is more comfortable and increases self-productivity.
The preference to work from any location is also considered as one of the most important factors driving the “great resignation.” A large number of employees in the region have switched jobs starting in the middle of last year because they are seeking more flexibility and workfrom- home options. In 2021, around 47 million employees in the U.S. resigned from their jobs. Some termed it as “great reshuffle.” The great resignation also resulted in massive skill shortage in the country. Hence, enterprises in the U.S. started offering flexible and collaborative working environments, along with a high focus on employee well-being, to attract and retain talent. These initiatives have led to flattening the unemployment and unfulfilled jobs curves, although they have still not reached their pre-June 2021 levels.
Apart from the above-mentioned factors, employees belonging to Gen Z (born in late ‘90s and early 2000s) are either about to enter or have already entered the workplace. There are more than 68 million Gen Zers in the U.S. This generation has grown to be tech savvy and has adapted to the virtual world and social media networking. Therefore, they did not face challenges in transitioning to a virtual and remote working model during the pandemic. They can effectively collaborate and connect with colleagues remotely because this was just like an extension to their existing social media life. However, they are striving to adjust to the restrictive nature of employment, particularly in the age of hybrid working. Also, they find it difficult to collaborate and work with employees belonging to the Gen X or Gen Y categories.
With entry of the Gen Z workforce, there is also an increasing focus on areas related to greater purpose of an organization or workplace other than making profits. This generation is quite expressive and sensitive to social issues and seeks employment in firms that provide equal representation and inclusivity. This generation is also seeking more purpose-driven, organizationwide initiatives such as sustainability, environmental, social, governance (ESG) initiatives and carbon footprint reduction. An organization exhibiting these characteristics can expect better employee retention compared to those that do not. Enterprises in the U.S. are also expected to focus more on sustainability and environmental concerns because of government initiatives such as the Paris agreement and the Biden administration’s ambitious goal of carbon pollution-free power sector by 2035.
The increasing focus on employee retention, a tech-savvy workforce, sustainability, and remote and hybrid working has placed enterprise IT and workplace leaders at the center stage of transformation. Enterprise IT that was once only known for “resolving issues” is expected to play an important and key role in redefining the business and operating models of the U.S. enterprises as they tackle these challenges. Modern technologies have the potential to address many of the above-mentioned concerns, and enterprise IT and workplace leaders are exploring possibilities of leveraging them to achieve desired results.
ISG has observed decreasing demand for standalone, end-user computing or technology-only focused deals. Enterprises are increasingly including digital workplace initiatives within their overall business and digital transformation scopes. This has become more apparent after the pandemic, as global organizations are reassessing and rethinking their business models. This does not indicate that traditionaltechnology- focused services are no longer pursued; . In fact, these services are now part of a broad transformation process with strong focus on employee experience and retention.
With the future of work initiatives in the U.S., we have observed the following trends:
• Enterprises are increasingly seeking assistance in strategizing their workplace transformation plans. Clients want to design the workplace technology experience that suites the changing employee or user persona, whether they work from office or from a remote location. In addition, clients want to design their strategy to enable and support the gig and contingent workforce.
• ISG has also observed a re-focus on traditional-technology-focused managed services outsourcing to enable a remote and hybrid workforce. As employees are working from locations of their choice, enterprise IT and workplace leaders are strategically investing in end-user technologies that include measuring experience with device and application performance along with adoption of automationenabled service desk support function. Continuous monitoring and device application performance analytics can also help keep track of carbon footprint.
• The frontline workers working in essential services sector require digital enablement for productivity improvement. With great resignation and increased need to attract talent for these services, clients in the U.S. are considering technology solutions to enhance the experience for frontline workers and create a sense of belonging among them.
• Employee well-being and empathy has been the major focus areas since the pandemic. Organizations giving importance to these aspects observe high employee retention rates. In the hybrid and remote working model, tackling issues such as digital burnouts and maintaining work-life balance have proved to be a key approach to support employee well-being and showing empathy.
• As many firms have already reopened their offices and are insisting employees to work from office for few days in a week, there is an increased need to improve the office working environment. To achieve this, companies need to invest in technology-enabled, smart physical workspaces that enhance employee experience.
• With the advent of latest technologies such as the metaverse, clients are focusing on expanding and exploring on the use of technologies such as virtual realities (VR) for training programs and onboarding.
These trends have expanded the scope of traditional digital workplace technologies as they interact with diverse business functions to provide enhanced employee experience. This is explained in Figure-1 below.
Enterprises in the U.S. are focusing on multiple factors simultaneously, such as enabling hybrid work model, attracting and retaining talent by enhancing employee experience and achieving sustainability goals.
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