Driving Business Growth in new normal with cohesive employee relations
Mr Ramkumar Shankar, Managing Director, Chemplast Sanmar Ltd, talks about the evolution of industries and how employee expectations and outlook have changed in recent times.
There are many clichés in life, in general, and in industry in particular. One of the most well-known clichés in recent times is the term, ‘The New Normal.’ This is a term that one just cannot escape from. It is used to refer from commodity prices and logistics to environmental norms and just about every business situation. While this may seem a highly overused term, one cannot escape the fact that indeed there have been significant shifts in industry over the last many years. Conditions have changed; needs have changed; approaches and methodologies have changed. The tools at our disposal have evolved. Opportunities which were not there earlier have emerged and where opportunities emerge, so do challenges. It would be interesting to take a giant step back and understand what really has changed so much. What is this new normal? For that, we would need to look well into the past and understand the path that has been traversed. Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, in a very widely read article in 2016, identified four phases of industrial growth.
The Four Industrial Revolutions
The first phase, which he calls the first industrial revolution and what we say as Industry 1.0, saw the advent of the Machine Age, with the usage of water and steam power. This was the first significant step moving away from the dependence on human and animal power to mechanical power. This opened up huge new possibilities in expanding output, as one was no longer restricted by what was physically possible. This was a phase that ran from the mid-18th to around the mid-19th century. Sometime around the mid-19th century, the next phase—Industry 2.0 began. This transformation was driven by the proliferation of electric power in industry. Railroads connected places and enabled movement of goods and people, thereby reducing distances as a constraint. Telecommunications evolved further, linking distances. All of these enabled mass production and further industrialization. Industry 2.0 went on till the mid-20th century, interrupted by two World Wars. Progress was obviously incremental during this phase. Once World War II ended, the next era began. This was Industry 3.0, which ushered in the ‘Digital Era.’ This saw a massive growth of electronics and information technology. The shift from analog to digital progressed at an extremely fast pace during this period. Industrial processes changed and the size of both manufacturing units, and indeed companies, increased multifold. In communication, transportation, product discovery and delivery and in many other areas, including the way we lived, there were seismic shifts.
Maximum disruption happened during this period, and people had to evolve quickly to live with and manage this disruption. We are now in what Klaus Schwab called the Fourth Industrial Revolution of industry or Industry 4.0. This builds on the third phase, further digitizing the word. This is the era of metaverses and to quote Mr.Schwab, ‘the fusion of technologies that is blurring the lines between the physical, the digital and the biological spheres.’
With the world in their hands, expectations of the workforce today have gone up and acceptance levels are very different from what they were. Today’s workforce has a respect for deeds, not for positions, persons or even age.
In this current milieu, the gap opens up between return on capital and returns to labour. Many traditional jobs are being pushed to extinction while new job opportunities open up. Reskilling is of paramount importance. No individual in the workforce can afford complacence or hope to remain relevant without effort. The pace of change has shot up multifold. If one does not keep up, it is very easy to be left behind. This dizzying rate of change places enormous stress and strain on the workforce, especially mentally and brings into sharp focus the need to address the impact on mental health as well.
There is already a talk about Industry 5.0, which talks of even deeper cooperation between people and machines. But what about the people side of industrialization?
Those then were the four broad phases of evolution that the industry has been through—Industry 1.0—the mechanization phase, followed by the electrification phase, then the automation phase and now the digitization phase. There is already a talk about Industry 5.0, which talks of even deeper cooperation between people and machines. But what about the people side of industrialization? As the ways of business have changed, so too have people, their attitudes and approaches. They too have evolved with the times, especially in the latter part of the 20th century.
Baby Boomers to Gen Alpha
Demographers have these very engaging labels by which they classify people since World War II. They start with those born between 1946 and 1964 and call them the Baby Boomers. These are people who were born during the economic boom that came about post-war. The generation that came after this, those born between 1965 and 1980, were turned Gen X. Following them are the millennials or Gen Y born between 1981 and 1996 and then the post-millennials born between 1997 and 2012. The next generation—Generation Alpha, spanning 2012 to now is not yet in the work force. They would be a subject for a conclave in the years to come!
This demographic classification is important because, when one was born defines the kind of change that one has seen and the thinking that defines the response to this change. For instance, I would qualify as a Gen X. We as a generation were needed to adapt to so many things—in communication, from the rotary dial phones for which we needed to reserve and wait; (How many of us remember the OYT and non-OYT scheme?) to the push-button phones to pagers, which we in India have mostly skipped; to mobile telephones to now the era of smart phones.
We moved from manual typewriters to electronic typewriters to computers that filled the room, to floppy diskettes and all the way to where we are today. In television, we had just Doordarshan. We have seen an explosion in programming channels to where we are today. The advent of the Internet and World Wide Web have essentially democratized access to information and knowledge and created a level playing field. We have witnessed tectonic development in so many areas.
Indeed, the Baby Boomers and the Gen Xers have seen the maximum changes in one lifetime, in almost all spheres of life. Now, multiply that by a factor of 10 and that is the speed at which development is happening. That is what the millennials and the post millennials are going through. The workplace has also seen the same rapid changes over the past few decades, starting from the very products that are produced. From products being manufactured to meet existing needs, today needs are being created around products or services that have been already designed. Cab hailing services, smartphones, tablets, etc., are all prime examples. Similarly, the existing paradigms in the workforce have changed dramatically both due to changes in the industrial construct and due to the evolution of employee expectations.
The world in your hands
The personality and character of today’s workforce have also changed dramatically. The explosion in smartphones has meant that today’s employees are very well informed and exposed to what is happening elsewhere. We would all remember this very early cellular services ad in India, which said karlo duniya mutthi mein—that is, “Take the world in your hands.” Truly, that was prescient. For, that is exactly what has happened.
With the world in their hands, expectations of the workforce today have gone up and acceptance levels are very different from what they were. Today’s workforce has a respect for deeds, not for positions, persons or even age. One can no longer expect or demand respect because of the position one holds or one’s seniority. Respect has to be earned. There is very little fear of losing jobs, or of saying the inappropriate things or of just about anything.
They don’t stand and wait
The millennials and post-millennials have the confidence, maybe sometimes not so well founded on reality, which shapes their behavior and approach to situations. Emotional connects are less of a given than before. There is more of a transactional construct to most interactions and relationships. There is an immediacy of needs bordering on impatience. John Milton’s lines on ‘they also serve who only stand and wait,’ would fall on deaf ears today. For, very few are prepared to wait for their turn in the sun.
Already businesses in the US and Europe are being roiled by what is being called the Great Resignation. In the US alone, post the pandemic, within the last six months between April and September 2021, it is estimated that 24 million workers have resigned and exited the work force.
Walls are breaking down, opinions are freely shared and social media offers a more-than-ready platform for this. All of this has been further complicated by the Covid pandemic and the havoc that it has brought on health—both physical and mental—and the restrictions on so many things that we have so long taken for granted. These restrictions have pushed us to make so many adjustments to how we do things—be it at home or at the workplace. These are likely to pose a fresh set of challenges, whenever the world ultimately emerges from the pandemic. I hope that Omicron is the last of these variants.
The great resignation
Already businesses in the US and Europe are being roiled by what is being called the Great Resignation. In the US alone, post the pandemic, within the last six months between April and September 2021, it is estimated that 24 million workers have resigned and exited the work force. This extraordinary situation has been attributed by sociologists to the pandemic induced existential questions that people have grappled with and the decision of many to just abandon the stresses of making a living.
A similar situation is actually playing out in China, though not much is heard about that, with what is called the ‘lying flat movement.’ This started as a push back against the 9-9-6 schedule or 9 to 9 work day, six days a week.
There is a shift in work focus worldwide from a work-life balance to a life-work balance. The priorities have changed. Businesses are now grappling with decisions on the balance between working from office and working from home.
An article in the Harvard Business Review in May 2021 on ‘what your future employees most want,’ talks of a talent accelerator study conducted among over 2,000 knowledge workers and 500 HR Directors in large corporations based in the US. As per this study, 88% of knowledge workers stated that when searching for a new position, they will look for one that offers complete flexibility in working hours and location. 83% feel that workers would be more likely to move out of cities and other urban locations, if they can work remotely. Interestingly, over 85% said they would prefer to work for a company that prioritises outcomes over output—In other words, in organizations that value action over activity.
Thus, this is just a small example of how employee outlook and expectations have changed in recent times. Not all of them may be acceptable; not all of them may even be practical but the change has to be acknowledged, identified and definitely cannot be ignored. This then is ‘The New Normal,’ a rapidly changed and changing industrial and business environment and a highly evolved, confident and non-conventional workforce and a complex interplay between the two.
Business leaders would need to manage this intricate and delicately balanced equation between business requirements in a world which is in churn and employee sensitivities and needs. It will not be easy. But as yet another advertisement goes, ‘Impossible is nothing.’