2022 Predictions

OVERVIEW

2021 Report

The 2021 Report identified and explored eight predictions for changes which would significantly influence the world of work in forthcoming years. These were that: people will work less; more people will work into their 70s; the office will be repurposed; a new legal right will be introduced to be consulted on environmental impact of work; employment status categories will be simplified; the UK will re-join the EU Single Market; politics will shift leftwards; and supply chains will be subject to increasing scrutiny.

2022 and beyond

A year on, the world looks very different. Looking ahead, as the working landscape continues to shift rapidly in response to world events, this Report identifies eight further predictions which would have profound and lasting impacts on the world of work.

Economic and political crises have supplanted the relative optimism of 12 months ago. The focus on “building back better” has been overshadowed by a darker world. Primarily, this was driven by Russia’s invasion of Ukraine, which highlighted the lack of resilience and the fragility of our globalised world and economy. Most economies are facing a cost of living crisis, including rates of inflation unseen for decades and exponential rises in energy costs, which are leading to much higher interest rates. Government debt – raised in many cases to support workers and businesses during the pandemic – is soaring as the state is forced to intervene to protect consumers from crippling energy bills.

Relations between the West and China may deteriorate further. The war in Ukraine shows no sign of resolution and, indeed, threatens in the minds of some to lead to nuclear conflict.

In an increasingly politicised world, divisions in society are worsening through increasing inequality and clashes of values. The influence of the views, values and behaviours of the young on the world of work and society as a whole has emerged as a central theme shaping the future of work. This shift in values and priorities will continue to drive significant change.

At the same time, the consequences of climate change are becoming clearer and the need to take remedial steps even more urgent. A world distracted by these economic and political crises is devoting less attention to combatting this threat at just the time when it needs to most.

Collectively, these shifts will impact greatly on the world of work. As societal trends evolve in the years ahead, employers will need to design jobs and work with purpose, provide a level of reward which is fair and transparent, build engagement, and facilitate flexibility, autonomy and belonging (PREFAB jobs) in order to attract and retain the best people. Simpler employment contracts will emerge to reflect these societal shifts and employee expectations, based on mutuality and aligned with employers’ brands and values. And as place matters less in the way people work and technology continues to advance, geographically fragmented workforces, nationally and internationally, will become more prevalent.

Skills shortages are likely to persist resulting in the need for increased work migration to the UK. In the longer-term, the need to act on climate change will bring sustainability to the fore, and there will be renewed focus on green jobs in order to meet growing demand in this sector.

Challenging economic times lie ahead and with growing pressure on government spending, employer support for workers outside of work will grow to fill gaps in state benefit provision. Higher rates of unemployment and skills shortages will co-exist and divisions between workers in a two-tiered workforce will become more pronounced.

The ways in which current global economic and political difficulties are affecting the world of work have shaped the emphasis of these eight new predictions. Nonetheless, tackling climate change must, and will, resurface in the years ahead as a top priority for government, business and individuals.

Eight new predictions 2022 – role of the state, globalisation and labour market

Unemployment and skills shortage

The labour market will transition from one characterised by skills shortages and low unemployment to one characterised by continued shortages (particularly in more highly skilled roles) but higher levels of unemployment.

Two-tier workforce

The workforce will increasingly divide into those, largely office-based, workers who can work from home, are well-paid, and have control and leverage over their working conditions; and those, often working in care, logistics or hospitality sectors, where work is more precarious, making ends meet is the primary focus and the flexibility of home working is not available.

Simpler employment contracts

Looking ahead, in many cases, simpler employment contracts will emerge which are based on mutuality, embrace digitisation and visualisation, and are better aligned to employers’ brands and values.

Geographically fragmented workforces

Despite a move to localised manufacturing and food production, the success of remote and home working will see workforces becoming geographically fragmented, both nationally and internationally. This will create challenges for employers in developing collegiality, a sense of belonging and fair pay policies as well as coping with the regulatory challenges of employing people in different countries.

2021 Predictions - Demographics, sustainability and social trends

Working less

Before Covid-19, the trend was for average working hours to decrease (see social trends – work/life balance). During the pandemic, hours increased for a variety of reasons (see emerging themes – flexibility). As a result of evolving values, growing awareness of the health implications of a long-hours culture and increased flexibility, the pre-pandemic trend will revive and average working hours will continue to decline. Many more people will look to work only part of the week and during hours that fit with their family or other commitments.

Working into the 70s

With people living longer, healthy lives (see demographics – ageing population), increased demands on the state pension scheme and likely skill shortages (see emerging themes– labour market), more people will continue to work beyond 70. Numbers working over 65 have more than doubled over the last 20 years (see emerging themes - flexibility) and this trend will continue. Age discrimination laws will also play a role in driving change, having, for example, outlawed unjustified retirement ages in the UK in 2011. In the US, which has had federal age laws for over half a century, nearly 15% (and growing) of over-70s are in work. In the UK, 8.1% of over-70s were in work in 2019 - an increase from 4.5% a decade earlier.

Repurposing the office

Working from home is here to stay as employers and employees adapt to the benefits of such arrangements. For those able to work from home, there will be a temporary return to the office for many who have missed personal and professional connections, before a reversion over time to working mainly from home. (see Covid-19 – agile working; social trends – work/life balance; emerging themes – flexibility; and socialisation and belonging). There will be a repurposing of the office with an emphasis on time spent there being directed at purposeful activities that cannot be done as effectively at home, such as collaboration and reinforcing a sense of belonging. Homeworking nonetheless remains impractical for many people. Only 36% of the UK working population worked wholly or partly from home in 2020.

Right to control impact

With climate concerns so high among people’s priorities, many businesses have responded by reporting on their environmental impact. Reporting, training and consultation obligations will undoubtedly grow (see sustainability – climate emergency). New laws in France oblige employers to inform and consult with their Social and Economic Committees on the environmental implications of business decisions affecting the workforce. Before long in the UK, employees will have legal rights to be consulted on, and even control, the environmental impact of their work. This may become a fundamental employment right alongside rights to privacy, family life and protection against discrimination.

2021 Predictions - Globalisation and the Role of the State

Employment status

In the UK and in many other countries, varied working arrangements have given rise to a plethora of different legal statuses governing the relationship between individuals and their “employer”. Various factors can determine if the individual is an employee, self-employed or has some other status. These include: the right of substitution; the obligation to provide or accept work; the use of intermediary companies; and who provides equipment and pays expenses. Self-employment as a proportion of employment has risen from 13% to 16% over the last 15 years. In many cases, the straight-jacket of employment provides insufficient flexibility while in others the relationship is set up to avoid tax or NICs or deny employment rights. Employment status categories will be simplified to fit the modern world of work (see role of the state tax; and worker rights)

UK re-joins Single Market

Within a generation, the UK will re-join the EU Single Market with a say over its decisions. It will not, however, re-join the EU – Brexit will not be reversed – and perhaps not the Customs Union, so the UK’s status would mirror that of Norway today. The euro-zone countries will press ahead with closer political and fiscal integration, leaving countries such as Poland and Hungary (where tensions are rising with the EU) outside that inner circle but remaining part of the Single Market. Attitudes to Brexit in the UK are already shifting and the obstacles to trade and impact on the British economy are becoming increasingly apparent. (see globalisation - Brexit) The Northern Ireland issue and avoiding border checks with the rest of the UK is insoluble, potentially threatening any trade agreement with the US.

Move left in politics

There is good reason to predict a leftward shift in British politics in the years ahead as values evolve, with Gen Z replacing baby boomers and the previous so-called silent generation amongst the voting public. A move left will signal greater state intervention and support; increased taxes, particularly on the better-off (the question will be whether additional taxes are levied through higher income taxes/NI contributions, increased capital gains tax rates, a wealth tax and/or other means); and higher public spending (to meet the demands of tackling health and social care and the climate emergency). The UK has started on this path with a new health and social care levy but will have to go further. This move to the left will extend employment rights for workers and see an increased role for social partnerships (see role of the state – worker rights and tax; and emerging themes – regulation and enforcement).

Supply chain scrutiny

Organisations will subject their supply chains to much greater scrutiny and control, particularly as regards the environmental impact of their value chain and the environmental, social and governance standards of the businesses within it. This will be driven both by increased regulation and stakeholder expectations. Increased costs of shipping and higher relative labour costs in developing economies, alongside enhanced attention to supply chain resilience in times of uncertainty and change, will also see historic manufacturing relationships re-evaluated and manufacturing returning closer to the ultimate product destination (see sustainability; globalisation; and emerging themes – resilience).

OVERVIEW

2021 Report

2022 and beyond

Increased work migration

Green jobs

PREFAB jobs

Employer support