Jobs are changing and businesses need to adjust accordingly.
Thankfully, a new study by A.T. Kearney’s internal Think Tank, the Global Business Policy Council, explained the five major trends expected to shape businesses over the next 5 years. Pay attention, make accommodations and you’ll be on track to succeed.
“The companies that prepare accordingly really have a competitive advantage,” says Terance Toland, co-author of the study and an associate in the Global Business Policy Council of A.T. Kearney, a global strategy and management consulting firm. “They need to develop their strategies accordingly,” he says.
The study examines individual trends that may be a little below the radar that Toland and his associates believe will have a significant impact on businesses over the next five years.
The major trends include automation of jobs; loneliness; battery revolution; climate-resilient infrastructure and an increasingly cashless way of business, according to the study, which was released in September.
“Times are indeed changing, and businesses must learn to cope with the changes,” says Pratibha Vuppuluri, chief blogger at She Started It, an online resource guide for working mothers. “Businesses first and foremost, though, need to revisit and see which amongst these trends are beneficial for their business, and which ones are not: from there, business owners will be able to come up with the right approach.”
Here’s how businesses can react to each trend.
Trend: Cashless society
It’s no secret that digital transactions are taking over in everyday business transactions. But, according to the study, we may become a truly cashless economy within the next few years despite resistance from those arguing that it enhances social inequality and that it can contribute to vulnerabilities in the digital and financial ecosystems.
Cashless transactions are expected to rise annually by more than 21% in emerging markets, and by more than 7% in developed markets over the next two years, according to the Global Findex database.
Sweden is predicted to be the first country to go completely cashless, followed by Rwanda. South Korea will be eliminating coins.
Still, some states including San Francisco and New Jersey banned cashless business because they say it will exacerbate social inequality.
Digital privacy and theft is also another major concern.
What businesses should be doing
The biggest issue with a cashless society is the increase in bank fraud and debt, says Philip Haglund, CEO and founder of the Stockholm-based pocket money and chores app Gimi. And while businesses shouldn’t be reluctant to turn to technology and digital tools, they need to help consumers and kids create healthy money habits sans cash. A 2018 study by the Federal Trade Commission found that millennials are nearly three times as likely to become victims of scams as seniors since they share their personal details online and because they tend to do the majority of their financial transactions online.
To curb these issues, businesses should start strengthening their cybersecurity capabilities so they lessen their data risk.
While they’re doing this, the businesses need to research what type of cashless methods will fit their business models.
“Adapt to new forms of payment, like Bitcoin, the future libra, Paypal, Zelle, cards, you name it,” says Arthur Ruth, vice president of operations of Memphis Maids, a house cleaning service. “All of these payment methods are far superior to cash: you sometimes have fees, but the simplicity and handiness are so useful that you need to implement it.”
Businesses should also take advantage of the data they will be gaining from the digital payments: how do your customers shop, for example – to customize and personalize products and services. You can start to anticipate each customer’s needs by examining his shopping history.
Levels of loneliness have doubled since the 1980s. What’s even sadder is that urban cities including New York, London, Los Angeles, and Hong Kong – are amongst the loneliest cities in the world. This is not good for health, nor is it good for business. The chief medical officer for Behavioral Health at Cigna said that loneliness has the same morality impact as smoking 15 cigarettes daily – and a 2017 study from the American Association of Retired Persons found that social isolation costs Medicare $6.7 billion annually. The number of remote workers grew 115 percent between 2008 and 2018, and these workers are more likely to quit due to loneliness. Even if they don’t quit, their performance may suffer.
According to the Academy of Management, there’s a correlation between employee loneliness and reduced job performance.
What businesses should be doing
“It’s important to remember that remote working doesn’t have to mean less communication,” says Stuart Hearn, CEO, and founder of Clear Review in London. “In fact, if businesses work remotely, even in part, they need to put more effort into communication.”
Hearn suggests offering multiple channels up to employees so they can speak with each other, along with managers directly.
“Technology has evolved to meet this demand, with team collaboration tools such as Slack and other communication tools such as Skype,” Hearn says.
Along those lines, new businesses can address solutions to connect people and find a way to become real-life social in the remote age, says Jaku Kaliszczak, marketing specialist with CrazyCall in Wroclaw, Poland.
One company that’s already doing this is Catalyst.
Through experiential campaigns, high-level brand strategy and an original analytics framework, Catalyst comes up with solutions that transform marketing into a collaborative experience with consumers, inviting them to be part of the brand, not just fans of it.
“Just as social media shifted the focus from outbound to inbound marketing – shifting the consumer from active to passive – community and corporate social responsibility can be leveraged to shift from inbound marketing to empowered marketing,” says Sara Dahan, founder and CEO of Catalyst.
Trend: Climate-resilient infrastructure
Last year was the hottest year on record. In addition, there were severe climate events throughout the world, contributing to $160 billion in damages. Annual losses caused by flooding is expected to reach $52 billion by 2050, up from just $6 billion in 2005. This is a major threat to businesses, which will need to adapt to climate change-driven weather events as the number of natural disasters continue to increase. The world’s largest companies estimated climate exposure expenses to be $970 billion – and the insurance industry doesn’t know how to handle it all.
What businesses could be doing
“Individual businesses can anticipate growing environmental regulations that will be enforced more strictly,” Toland says, adding that businesses should get ahead of this by continually monitoring for potential regulatory changes. These may include limits on carbon emissions and regulations to reduce their carbon footprint.
Since climate effects are prevalent throughout the world, businesses should prepare themselves by creating contingency plans in response to possible disasters such as flooding, electricity outages and service interruptions, Toland says.
Trend: Global Reskilling Race
Here’s a scary fact: unskilled and skilled workers shortages are becoming more prevalent. This is due to immigration policies and political trends. As a result, artificial intelligence, robotics, virtual reality and other technologies are starting to replace unskilled labor loss. This automation could cause many jobs to disappear over the next 20 years, and businesses need to reskill its workers amid this tech change. The WEF forecasted that more than half of the global workforce needs to be reskilled by 2022.
What businesses could be doing
First, businesses need to determine which of its jobs are evolving. Which job functions can be upskilled? Where should you invest money in reskilling and retraining? Next, they’ll have to hire outside talent to close the skill gaps – especially those with tech knowledge who can work with the future technologies such as AI and blockchain.
“Companies must be proactive in the up-skilling department and new alternative training programs like digital badges and other micro-certifications are skill-specific and affordable,” says Sarah Boisvert, founder of Fab Lab Hub LLC and author of The New Collar Workforce. “Many community colleges are offering these trainings either online or through their continuing education departments, and will also provide training onsite at your facility.”
Bonus: upskilling can also contribute to alleviating loneliness if the training is done in teams, and if methods like LEAN processes can be integrated into the company’s departments, Boisvert says.
Trend: Battery Revolution
Grid-scale batteries are expected to expand thirteen fold over the next 5 years. In the United States, 44 states have proposed or under-construction battery storage projects. This is expected to play a major role in decarbonization, although there are many hurdles to overcome. Solar power can only be produced with the sun, and wind turbines need wind. Within the battery storage industry, there are supply chain risks for lithium-ion battery input metals – so some battery manufacturers are trying to make a low-cobalt alternative.
What businesses could be doing
Invest in renewables plus battery storage – especially if you have a large physical footprint. This could save companies a lot of money: Tesla’s battery storage system cut costs by $40 million, Toland says. And learn about new battery technologies, such as distributed energy systems.