Workplace technologies are developing at a staggering speed. With mixed reality, generative AI and other workplace technologies revolutionising ways of working, it's easy to get distracted and overlook your organisation's most important asset, its people.
What is technology without people? Beyond some expensive silicon and plastic, not much. When we take a step back and look at what's really driving change, the answer soon becomes clear: It's us. We live in a human-powered economy. That's why an investment in people is an investment in business. And getting that investment right starts with workplace culture.
It's important to define what we mean when we talk about workplace culture. But it's not easy to pin down. Is it a set of values? Behaviours? Attitudes? Or customs and traditions? It turns out it's all these and more.
Harvard Business Review describes it as "an organisation's DNA. It is the shared values, goals, attitudes and practices that characterise a workplace. It is reflected in how people behave, interact with each other, make decisions and do their work. It affects everything – including your happiness and career."
Perhaps the simplest explanation comes from celebrated US management guru Marvin Bower, who describes it as "the way we do things around here".
However we define it, workplace culture can be tricky to measure. It's how it feels to be at work rather than a set of written rules. Every organisation has its personality and atmosphere – and that's not something easy to engineer, especially among dispersed hybrid teams.
Peter Drucker, the renowned management consultant and writer, said: "Culture eats strategy for breakfast." And in the wake of huge upheavals in the way we work, organisations are waking up to the fact that you can have the greatest strategy, cutting-edge technology and the best people in the world, but it doesn't matter if your culture isn't right.
Culture is the very air you breathe. If it's toxic, your organisation dies.
Culture is the highest priority for organisations looking to transform how people work – and how they feel about work. Here are some specific reasons why it's so important, the areas it can affect and how you can effect positive changes to your company culture.
Workplace culture influences the way people perform, which can directly affect your bottom line. A happy, supportive workplace energises people to come to work each day and boosts mood and concentration. Organisations with stronger cultures are generally more successful and have high productivity levels.
In fact, happy workers are 13% more productive than unhappy ones, according to research by Oxford University.
Does your organisation value mental health to the same degree as physical health? Workplace culture has a significant impact on employees well-being, and while an increase in remote working has helped to give people a better work-life balance, organisations need to offer ways of working to maintain the balance in a healthy way. Using mixed reality at work could be a solution to fighting the isolation of remote working while boosting performance.
Good communication helps create mutual respect and trust, regardless of individual roles and responsibilities. Workplace cultures where people can't ask questions, float ideas or easily connect with each other are less transparent and might not get the best from people. To achieve engagement, communication needs to involve open, two-way conversations.
Transparency in business is key to creating trust. If you can create a more open working environment, people feel empowered to communicate in constructive ways. Meetings and brainstorming sessions become more valuable as organisations hear real opinions – and fresh ideas – from every corner of the business. With mixed reality, businesses are adding a sense of presence to hybrid meetings and encouraging colleagues to share the truest version of themselves and their opinions. And ultimately, that's good for business.
Organisations with a strong culture and brand identity are more likely to attract the right talent. Having a website that clearly defines your core values and objectives makes it easier for job candidates to weigh up whether they'd be a good fit for your business. It's also your opportunity to convince top talent that your values and culture are the right ones for them.
A positive culture is one that values its people and their contribution to the success of the business. Employees who feel they're part of a community rather than a cog in a wheel are more likely to stay with an organisation. Companies with healthy cultures are 16 times more likely to retain their Generation Z employees. This not only leads to long-term loyalty but also cuts the costs involved in continually having to recruit new talent.
The most successful organisational cultures bring together people from all backgrounds and nurture a sense of team spirit. Even people with very different outlooks and personalities can gel if they have a common purpose to get behind. The highest performing teams are increasingly insisting that diversity of all kinds is critical for success.
As the latest diversity and inclusion thinking from McKinsey suggests, the business case for diversity is only becoming stronger over time. The management consultants' research shows that diverse leaders are also associated with more satisfied employees.
A thriving collaborative culture can break down boundaries between teams. On the flip side, a toxic environment can make employees selfish and cultivate a blame culture.
A healthy culture motivates people to strive for the best quality in their work. It's easier to get the most out of people who feel comfortable at work and are empowered to make decisions. This builds a high-performance culture that strengthens the whole organisation and helps to ensure that products and services meet the highest standards.
We've all seen posts on job boards and social media sites giving companies a hard time. Many of these come from ex-employees. People judge organisations based on their interactions with them, and a negative image can do a lot of damage. Businesses with a strong social conscience who follow ethical working practices and support staff well-being tend to attract more business and the best talent.
McKinsey's findings also show a strong correlation between diverse leadership and greater social impact.
Getting these things right can have a hugely positive effect on business, but a toxic culture has the potential to do just the opposite. Over time, an environment where employees dread going to work and don't feel their supervisors support them can bring a business to its knees.
Culture and morale are intrinsically linked. Like culture, staff morale isn't always an easy thing to pin down – it's a mix of engagement, attitude and mood – but you'll almost certainly know when it's low. Creating a positive culture that focuses on well-being, diversity and inclusion can help build morale by making each member of staff feel heard and valued.
But it's not just about bolstering individual employees. Positive workplace culture is a vital ingredient in building team morale by enabling teams to feel confident and empowered in the work they do while encouraging individuals to be themselves and voice their valuable opinions.
76% of workers say it's very or moderately important that their organisation help them imagine how their job may change in the future. Here's just some of the trends set to shape the workplace in 2024.
AI is poised to further revolutionise the workplace this year, analysing data, answering customer queries, scanning documents and creating first drafts of communications. But what effect will it have on workplaces and jobs?
Gartner predicts that generative AI will lead to the creation of new roles rather than job cuts. And this is something businesses will need to upskill for: In a Thomson Reuters survey, 87% of the professionals who responded said they think everyone will need training in new skills.
But while enthusiasm for AI continues to grow, some of its pitfalls are becoming clearer. In particular, generative AI's tendency to produce errors. Gartner cautions that, without careful governance, the use of GenAI could lead to reputational risk. And then there's legal and regulatory issues to consider, highlighted by lawsuits such as those brought forward against ChatGPT in a New York federal court. Allegations from novelists and the New York Times have suggested that OpenAI's large language model has built a product on the back of other people's intellectual property.
So while AI has enormous productivity-boosting and even, in some cases, career-enhancing potential, harnessing it successfully will depend on having employees with not just the right technical skills – but the right judgment.
Employees love hybrid working: nearly 8 in 10 employees who can do hybrid or fully remote work expect to do so, according to Gallup. But it's not always as popular among employers, with return-to-office mandates becoming increasingly common.
Employees may be reluctant to return to full-time on-site working for a whole bunch of reasons – the costs associated with working outside the home, and loss of flexibility being just a couple of them. Meanwhile, debates continue to rage about whether working from home or on-site is most productive and about whether new starters can be adequately onboarded and trained without being in the physical presence of their colleagues.
But hybrid working isn't going anywhere. Organisations need to attract and keep the best talent, and hybrid working is what candidates want. So employers may well look to virtual reality to bridge the gap between on-site and off-site workers, and satisfy demand from both sides of the hybrid fence. VR and mixed reality can provide a real feeling of presence for those not physically sharing the same space. And onboarding can be done immersively and at scale, wherever new starters are.
The last few years have seen workplaces in an almost constant state of flux, with the pandemic, the widespread adoption of hybrid and remote working, and now inflation hitting the pockets of employees. Not surprisingly, this ceaseless change is having an impact on employee well-being with stress levels going through the roof. According to Gallup, global employee stress has stayed at a record high since the pandemic with more than half of employees in the US and Canada reporting experiencing a lot of stress the previous day.
This is a huge issue for organisations: Stress can lead to loss of productivity, lack of engagement, high staff turnover and adverse impact on culture. Because of this, employee well-being is likely to be in the spotlight this year, with employers turning to technology including VR mental health support to provide everything from anxiety training to immersive meditation.
The last few years have seen employers struggle to find the right employees, with more jobs than people to fill them, and the exit of skilled staff from the labour market during the Great Resignation. This year, there are signs that the balance might be starting to shift.
Indeed's 2024 US Jobs & Hiring Trends Report shows a fall in its Job Postings Index from its 22.5% peak in December 2021. And the federal government's job postings are also down. The use of AI may be having some influence on this, as well as the slowdown in economic growth.
But, while acknowledging changes in the labour market, the UK's Chartered Institute of Personnel and Development cautions that the war for talent is still very much on.
"Though 2024 could bring respite to employers struggling to recruit, for now the labour market remains competitive", it warns. "Creating quality jobs that enable people to balance competing priorities is key. This means more than just pay, but careful job design too. Flexibility and autonomy are highly valued and allow people to manage a work-life balance."
This year, Gen Z are poised to overtake baby boomers in the full-time workforce according to Glassdoor's Workplace Trends 2024 report. They're not the largest generation in the workforce – that's millennials – but they'll still have a substantial impact on shaping the workplace, as will the gradual exit into retirement of the older generation of workers.
So, what are Gen Z like and what do they want from work? We know that high expectations of workplace technology is a key Gen Z trait. They're true digital natives who demand the latest in tech at work. And with 60% of employees wanting to see headsets introduced to their workforce by 2024, and 62% wanting to experience VR spaces with digital avatars for collaboration, they're not alone.
But it's not just about tech. Deloitte Digital has identified three areas in which the attitudes and values of Gen Z differ from those of their (almost certainly older) bosses.
For a start, they don't see work being as key to who they are. While 86% of bosses say that work is a significant part of their identity, only 61% of Gen Z workers feel the same way.
There's a soft-skills gap too. Gen Z workers place high value on empathy – in fact, they view it as the second most important characteristic in a boss. But bosses rank it only as the fifth most important. Mental health is another key issue. The Deloitte survey found that 28% of Gen Z struggle with mental health because of their boss and less than half feel they get the support they need at work.
So, leaders have work to do in getting to grips with the desires and needs of this youngest generation of workers to harness their full potential.
VR is set to transform the hiring process in 2024, particularly with the use of VR interviews. It's a logical next step as hybrid and remote working enables employers to cast their net wider to find the right staff. It also fits in with employers' increased focus on looking at skills rather than paper qualifications when seeking to recruit the best job candidates.
VR interviews are completely immersive, giving candidates the opportunity to feel truly present with their interviewers wherever they are in the world. What's more, applicants can demonstrate their skills in virtual simulations of real-world work situations. This gives them the opportunity to show what they can do, as well as allowing interviewers to make a realistic assessment of whether they're a good fit for the job.
AI too, has an increasing role to play in recruitment. Concerns continue to be raised about the dangers of bias 'baked in' to AI. But on the other side of the coin, AI has the potential to increase diversity by, for example, automating the recruitment process to focus on skills and experience, so helping to remove biases.
Providing a positive employee experience at a time of radical change is paramount if you're going to hang on to your top talent. Despite this, Forrester is predicting an 'EX winter' in 2024 with organisations cutting back on employee experience funding and focus.
This is one trend it could be a big mistake to jump on. With only 31% of employees engaged, enthusiastic and energised by their work, most organisations still have a lot to do on this front. And doing it is worthwhile. According to Gartner, those who say they are energised and excited about their work are 31% more likely to stay with their employers, 31% more likely to make discretionary effort and make a 15% greater contribution.
There are a few key areas of focus for organisations wanting to make the most of what the coming year has to offer. Expand the boxes below to learn how businesses can prepare for the changes ahead.