Globalization, demographic change and digitization are forcing companies to constantly rethink their labor structures. That is as it should – the companies that manage to adapt tend to enjoy higher performance levels, growth and ROI. At the same time those kinds of changes present many companies with big challenges. Given that it is not enough to simply offer new company structures, a company must set up conditions in which their staff are not overwhelmed by the freedom and complexity engendered by the situation. Finding the right approach is difficult because there is currently very little information about the systematic implementation of new labor structures.
Only a few companies truly feel comfortable in the modern professional world
That’s why the Center for Employer Attractiveness, together with the University of St. Gallen, has conducted a study investigating the factors required for successfully implementing modern labor structures. The study also revealed that only 25 percent of the companies studied have made the leap into the new professional world. And of those only 24 percent were successful, that is to say: 76 percent of them couldn’t handle the change. That seems to indicate that the openness towards new labor structures is present among a quarter of the participating companies but that the implementation phase is still a problem. Companies should know how modern labor forms actually look when active in the world and managers need to create the necessary conditions for a successful transition from traditional towards modern methodologies.
Creating a new professional world
What does the new professional world look like? It is made up of flat network-like structures that are becoming ever flatter by the year. And terms like home office and desk sharing are commonplace. Employees can structure their time and offices flexibly and can work in fluid and virtual teams. The communication within the company is non-synchronous and it crosses boundaries. This of course leads to changes in leadership, cooperation and control. In order to survive in the modern professional world companies need to rethink their old understandings of leadership and learn to trust their staff more.
Four success factors that lead to the successful transformation
According to the study about “disruption in the professional world” there are four essential factors for success that a company can use to achieve the transition. It requires flexible structures with low levels of formalization, a strong culture of trust, leadership with vision and inspiration as well as competent staff. If a company does not pay attention to these success factors then performance, innovation, staff commitments and the productive energy could all suffer. Besides, if the shift towards a new professional world is poorly prepared the staff becomes less likely to be able to cope with the new professional structures.
1. Flexible structures with low formalization levels
The first requirement for success is flexible company structures with low formalization levels. The limited number of rules fixed in writing makes operations more fluid and it permits the existence of virtual teams, flexible hours and models as well as individualized tasks. This makes companies more innovative and more attractive. Flexible hours are the most common labor reform while home office and desk sharing offices are barely being used.
2. Leadership with vision and inspiration
It’s not enough to simply introduce flexible structures. Visionary leadership and inspiration are just as important. Companies need to offer staff a clear vision and an inspiring and goal oriented leadership climate. By goal oriented I mean that staff need to know exactly what is expected of them. When companies implement new reforms staff tend to set their own goals and determine their own structures. Inspirational leadership is becoming ever more important: it fosters a team spirt and stirs the employees’ emotions. Why is that so important? It’s simple, clear and inspiring company values are necessary to strengthen the culture of trust in the company and to motivate the staff.
3. The culture of trust
This leads us to the next factor for success: the culture of trust. A positive relationship between the staff and management is more important than ever before in modern companies. It is vital for the success of the company. At the same time a trusting supportive climate is essential for the staff as well. Without trust a decentralized methodology is not possible.
4. Staff competency
New professional forms are complex. They make staff more flexible and self-directed in their work and they allow teams to self-organize. This self-determination can cause pressure and nervousness among staff. That’s why it’s important for them to be able to deal with stress well. Otherwise there is a risk of falling into an acceleration trap. The staff also need to have strong social skills in order to be able to communicate with a variety of personalities using different communication methods.
Getting the parameters right
Companies that want to change and modernize need to see these four central factors as essential elements to making change possible. These factors also determine the timing. Perhaps it’s a good thing that only a quarter of interviewed companies have chosen to enter the new professional world – after all, most of these companies struggle with the implementation. Companies need to strategically think about the long run and only then decide whether they prefer the modern professional world or the old traditional one. And they need to adjust their HR management strategy according to that decision.
Companies that offer modern professional labor forms are considered attractive. Particularly the young generation is excited about flexible and fluid company structures. Yet not all companies feel comfortable in the modern professional world. A lot depends on the individual conditions present in the company. It would be irresponsible to pursue the change for its own sake – the new professional world needs to be planned with sustainability and foresight as their driving forces.
The Center for Employee Attractiveness in Konstanz released a study entitled “Disruption in the professional world. Learning from successful pioneers” with the Institute for Leadership and HR management at the University of St. Gallen. The study is based on an analysis of surveys filled out by 19,884 leaders and staff members from 92 companies. The study is available for free at www.topjob.de.
Beyond analyzing employer attractiveness TOP JOB investigates the central factors necessary for achieving a transition into a new professional world. With TOP JOB you can see at a glance how well prepared your company is and whether you may actually be more successful with traditional labor structures. zeag GmbH organizes projects called TOP JOB and Ethics in Business which cater to small to medium sized businesses. TOP JOB has been used as a survey-based HR management system in medium sized companies since 2002. The methods in TOP JOB were developed exclusively by the University of St. Gallen for zeag GmbH. TOP JOB helps companies find good employees and it develops a strong foundation for the continued advancement of employees.