• Sunday, December 10, 2023
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Slow innovation, cost-of-living crisis hinder workforce productivity – PwC survey

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A recent survey conducted by PwC, the Global Workforce Hopes and Fears Survey, revealed how slow innovation culture, cost-of-living crisis, skills hinder employees and companies’ productivity. It also addressed other concerns and opportunities for senior executives as well as workers.

The survey, which collected responses from nearly 54,000 workers in 46 countries and territories, highlights the central challenge faced by CEOs and C-suite leaders: the need to reinvent their organizations with the support and engagement of their employees. The current landscape, marked by widening skills gaps and financial struggles among workers, demands a proactive approach from leaders to understand their employees’ needs and make their organizations more adaptable.

While a sizeable portion of the global workforce is eager to learn new skills and embrace artificial intelligence (AI), many companies struggle with fostering an environment that encourages debate, dissenting ideas, and tolerates small-scale failures, according to the survey.

Furthermore, a growing number of workers express restlessness, with 26 percent planning to leave their jobs within the next year, compared to 19 percent last year.

Similarly, the survey revealed that while employers anticipate significant skill disruptions in the next five years, many employees do not share the same level of awareness.

Only 36 percent of respondents believe that the skills needed for their jobs will change significantly, and just 43 percent have a clear understanding of how their job requirements will evolve. This lack of anticipation and understanding leaves workers without specialised training more vulnerable to job losses as automation and AI reshape industries.

Also, the PWC research drew attention to the financial strain faced by workers globally. Economic uncertainty and high inflation have left many employees struggling to make ends meet. The proportion of workers with money left over at the end of the month has decreased, and a growing number of respondents report difficulty paying their bills.

“14 percent of employees around the world struggle to pay bills every month, and another 42 percent say once they cover their expenses, they have little or nothing left over (up from 37 percent in 2022). One in five respondents says they have an extra job, in addition to their principal one,” according to the report.

Financial stress not only affects employees’ well-being but also impacts their productivity and engagement at work.

There is a growing divide between workers with specialist training and those without, the PWC report showed. Employees lacking specialised training are less likely to see the need for acquiring new skills and are also less inclined to recognize the importance of crucial soft skills for their future careers.

“53 percent of employees say that their job requires specialist training, up from 49% last year,” the report noted. “Workers without specialist training are also more likely to be facing financial difficulties than specialist workers, and are less likely to have a clear sense of how their skills will change—all of which could further income inequality.”

This specialisation gap poses a risk to both individuals and companies, leading to increased economic inequality and hindered productivity and innovation.

To address these challenges, the research identified four key actions for CEOs and senior executives to prioritise. These actions include engaging and inspiring employees, particularly those falling behind in skills; recognising the importance of skills over formal qualifications and job histories; fostering an environment that encourages experimentation, debate, and disagreement; and understanding the impact of the cost-of-living crisis on employee well-being.

The survey as well laid emphasis on the need for leadership teams to establish a clear vision of the skills required for organisational transformation and communicate this effectively to employees. Leaders must also recognize the value of existing skills within their workforce, moving away from a qualifications-focused approach and tapping into the potential of their employees. By doing so, organizations can remove barriers to skill utilization and contribute to a more equitable future.

In addition, the survey stressed the importance of fostering an inclusive and supportive company culture that encourages innovation, feedback, and personal fulfillment. The findings revealed that only a minority of employees feel that their managers tolerate small-scale failures or promote dissent and debate. This lack of encouragement stifles innovation and engagement, leading to lower job satisfaction and increased turnover.

The survey concluded that management or the leadership of a firm must take a holistic approach to address these workforce challenges; including understanding the evolving skills landscape, recognising the value of existing skills, fostering a culture of innovation and inclusion, and addressing the financial well-being of employees.

By prioritising these actions, leaders can drive innovation, enhance employee engagement, and create a more resilient and adaptable organisation in an ever-changing world.