As we sit in this prolonged recession, perhaps it’s a good time to focus less on the challenging labour market & turn instead to the future of work. Refocusing on what’s next is a nice distraction, but it can also evoke thoughts on how to best move forward.

The topic of flexible working is always thought provoking. Just in recent weeks, the Government have announced they are cracking down on flexible working in the public sector. They have outlined a set of high-level principles but are yet to flesh this out with more detail. Essentially, working from home arrangements are not to be seen as an entitlement and will be by agreement only, and flexibility will only be granted until performance is compromised. Additionally, this will be monitored through regular reporting across the entire government sector.

In recent months, I have seen an increase in roles I am recruiting to be primarily office-based, and in some cases 100% office-based. In a saturated labour market, employers have more power to reinforce and recruit around these mandates, but this has obvious disadvantages for certain sectors of the workforce. The most affected groups are caregivers requiring flexibility to work around commitments to children or elderly relatives, and people living an hour or more away from their workplaces due to onerous travel times and costs.

Despite there being an amassed evidence that mandates have nil consequence on financial performance and negative consequence on employee experience and productivity, the main driver for the movement back to office-based roles is for enhanced team cohesion, collaboration and learning opportunities.  In the public sector, there is the additional requirements for public servants to be visible, and to bolster the local economy in Wellington by supporting local businesses.

Interestingly, at the same time that office mandates are increasing, we are seeing examples of movement to even more flexible ways of working. In the UK, the Labour government is controversially proposing a law that enacts a four-day working week, making employers legally bound to offer flexible working options from the outset of employment, unless it is not "reasonably feasible".

Labour advocates argue that this move is as beneficial for shift workers as it is for Monday to Friday office staff. They also highlight its potential to assist new parents in returning to work and to alleviate the burden of exorbitant childcare costs. Recently (pre-recession), we saw our very own Nga Taonga Sound and Vision become the first publicly funded organisation to adopt the four-day work week without changing pay.  Staff are now able to choose from either working four days with Fridays off, work normal weeks with reduced hours, or work reduced hours with alternate Fridays off.  I am watching this space with interest to see what benefits are realised from this change, and if more organisations in New Zealand will follow suit, or move to less flexible work models.

Another interesting topic for the workplace of the future is the changing demographics of the workforce, and what this will mean for the skillset required of our leaders of the future. We have an increasingly more tech-savvy, innovative, inclusive and socially and sustainability-conscious workforce.  Driving this are the Millennials (born roughly between 1981 and 1996) and Generation Z (born roughly between 1997 and 2012). As at 2024, approximately 30% of New Zealand’s working age population are millennials (ages 28-43) and 10% are Generation Z (ages 12-27). By 2050, the number of Millennials will drop slightly, as they head into retirement, and Generation Z will increase, as they reach full working age, to 25%. By the end of 2025, Generation Z is expected to be roughly 30% of the global workforce.

In 2024 the number of Māori individuals of working age (ages 15-64) in New Zealand is estimated to be around 20% of the working age population. It is 10% for Pasifika peoples. By 2050, projections indicate that the working-age Māori population could grow to around 25%, while for Pasifika it will increase to around 15% of the working age population.  

There are many other factors to consider in the future of the workplace; gender-specific factors; the growth of our LGBTTQIA+ community; and the rapid emergence of technology automation and innovation to name a few.  All of this points to a workplace where there is increasing demand for inclusive and innovative policies and practises. Our leaders of the future will have to pivot accordingly, and focus on prioritising the employee experience as well as the customer experience.  This might involve providing enhanced flexibility in work hours, or making innovation and sustainability central to organisational strategy, or adopting a proactive approach to AI, backed by the freedom to adopt and experiment and access to ongoing training. Or it could lead to the implementation of workforce polices and practises that have an enhanced focus on inclusivity for specific cohorts. Regardless, the workplace of the future is going to be fascinating.

Looking for more Market Insights? Check out our Q3 2024 State of the Market report right here.