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2021 was the Year of the Great Resignation as described by Professor Anthony Klotz of Texas A&M University who predicted that the end of the COVID pandemic would see a large number of people leaving their jobs as life returned to a “new normal.” By April, the number of workers to quit their job in a single month broke an all-time U.S. record. McKinsey & Co. later described it as the Next Normal.

That was 2021. But what does 2022 have in store for the talent industry? Here are our predictions for the year ahead.

1. Less role stability, demanding a more flexible workforce

COVID-19 shook up the world’s economies, and it left many business leaders questioning what would be different about their future outlook once ‘things returned to normal.’ 2021 was the year everyone realized a return to normal wasn’t going to happen. We start 2022 knowing that fact, and that finding talent will require companies to look further afield for the talent they need.

At the same time, talent leaders know that demands from executive teams are unlikely to show any signs of stability. The bi-annual reorg has become a continuous roller coaster of unpredictable change as demands for different skills ebb and flow. It will require recruitment teams to increasingly look toward contingent workforce sources to get work done; where short-term stop gaps become long-term sourcing solutions.

2. AI begins to bite

Economies have always seen a trade-off between machine automation and employment. In the early 20th century, economists started to realize the relationship between automation and higher wages was a broken one. Until then, it was largely assumed that a rise in machine automation would lead to higher wages and growth in the GDP of economies.

What we are seeing today is a growth in digital machine automation, which is reducing demand for lower-skilled roles and cutting the incomes and role opportunities of workers. Today, most organizations don’t need filing clerks, draftsmen, or secretaries. Tomorrow, economies won’t need as many accountants, administrators, social media writers, test paper markers, or researchers.

As the result, we see workers take on multiple jobs to earn a living wage. Contracting roles are on the rise, full-time well-paid roles are in decline. That said, the influx of AI and software robot solutions invented over the past few years have yet to have the impact on productivity that was expected. We can expect 2022 to be the year when the influx of AI solutions begins to spike, speeding up the shift from permanent workforce roles to a much bigger flexible workforce. That said, higher-level tech roles—those that demand Applied Mathematics competencies—are set to grow exponentially in demand.

3. Hybrid working becomes the norm

2021 was the first full year of hybrid working, punctuated by governmental requests to stay at home, go to the office, go back home, and so forth. Most employers found the new normal frustrating but broadly a non-event as most departments were able to fulfil their obligations working to this new set of rules. But this was ‘coping’ not embracing what is a fundamental change to work patterns.

2022 is the year the business world has to come to terms with the hybrid working reality which, for talent professionals has its own unique blend of implications. Firstly, hybrid working diminishes the argument that you should hire locally to your offices, because most of your people are dialling in anyway, including hiring managers! Another transformative impact of hybrid working is how it is changing contractual arrangements and perceptions of ‘perks.’ In days gone by, a company car was seen as a privileged benefit, but now, many would prefer an annual contract with a local office services company. Talent executives will need to revisit their benefits packages in 2022. Another big issue comes in approaches to manage appraisals and wellbeing of people. Coping with the isolation of remote working and managing personal development in a distributed ‘virtual’ work environment demands a rethink on how businesses best manage their talent if they seek to keep it.

coworkers talking in the office with face masks

4. Workforce productivity is revisited

Measuring workforce productivity in a knowledge economy has always been a bit of a fools game. It’s quite easy in manufacturing, when the physical output of products can be counted against the number of workers needed to built them. It’s not so easy to measure output when workers are producing spreadsheets, sending emails, creating new ideas—and the like.

As the knowledge workforce becomes ever more remote, measuring productivity—or at the very least, the return on investment value of workers—will return in 2022 as a major topic of discussion in boardrooms. The simple solution, to automate tasks with robots instead of humans (so that every event, click and thread of activity can be tracked digitally), will be on the mind of many departmental leaders. But some tasks still need a human to fulfil them and, in 2022, it will be in this area that companies must decide how to weigh value, measure effort, and monitor results.

5. New business models and market structures emerge

At one time, companies tried to do everything for themselves under the same roof, taking control over their IT systems, their data, their processes. Nowadays, enterprise systems and processes aren’t normally managed and operated by the business they serve. Companies are having to be more circumspect on the resourcing approaches they adopt to design, build and sell products. Each has to determine where their core customer value comes from, and will normally hope to outsource the rest.

Business leaders might envision a two-tier business model of ‘core stuff’ that yields customer value, and ‘support stuff’ necessary to deliver results, but these are activities that produce little or no competitive advantage. Challenges in talent supply mean that business models are becoming ever more fragmented and multi-layered.

The hunt for new economies and productivity gains has moved beyond ‘better tech tools’ to a growing realization that it’s not business processes, but business models that need to be optimized in the 2022 economy.

In 2022, we can expect more layers to emerge in talent strategies. Expect to see Master Vendors or Managed Service Providers (MSPs) take on more support services, while technology suppliers make the move from ‘apps’ to ‘platforms’–that blend services with technology to deliver the outcomes employers seek.