The rapid spread of digital technology throughout all facets of business is changing dramatically how companies attract, retain, develop and deploy their workers.

Traditional approaches to workforce management are unable to satisfy many of the aspirations of new generations of digitally-savvy workers. They also fail to take full advantage of digital technology’s increasing ability to enhance the performance and efficiency of workers.

What’s needed is a new, adaptive approach to managing the workforce. By redesigning the content and context of work, to better accommodate increasingly-pervasive digital technology and provide workers with greater employment flexibility, organizations can unleash a trove of previously neglected skills and capabilities. These new-found competencies will help companies adapt more quickly and effectively to the demands of the fast-changing inter-connected digital economy.

One of the main reasons why employers need to change their approach to workforce management is the arrival of large numbers of Millennials onto the job market. These young people, who are less than 35 years old, are usually very confident using digital technology. They are already the biggest demographic group in the workforces of most developed economies34 percent in the US for exampleand their influence is rising steeply. Within less than a decade they’ll comprise as much as 75 percent of the global workforce.

Unlike previous generations, Millennials rarely seek long-term careers with a single employer. Instead, they’re usually attracted to jobs that give them plenty of autonomy and lots of opportunities to learn and develop their skills. Consequently, workforce churn among Millennials is high. Sixty-three percent of the Millennials we surveyed expect to change jobs within five years.

Furthermore, Millennials tend to value emotional factors, such as engagement with their employer’s goals and vision, as well as their quality of life and status, as highly, if not more, than their income and benefits. They often spurn traditional hierarchical roles in favor of less structured, more project-focused jobs. Freelancing, for example, has great appeal.

To match Millennials’ work aspirations, many companies are already becoming more flexible in managing their workers. Video game developer Valve Corporation, railway operator Deutsche Bahn and automotive manufacturer Mercedes-Benz, for example, are creating “hyper-personal” work environments that accommodate their workers’ individual skills and preferences.

The need for such adaptive approaches to workforce management will accelerate as the next generation of workers, Generation Z, exerts greater influence. Born after 1994, they are the first true Digital Natives and have always engaged with digital technology. They tend to have highly diverse attitudes and preferences as well as short attention spans.

To develop an adaptive approach to workforce management, that harnesses the changing needs of workers and employers, organizations should consider these key steps.

  • Create a flexible workforce model: Redefine employment opportunities, for full-time workers and freelance contractors, to ensure the workforce can react with speed and agility to the demands of digital innovation.
  • Embrace collaborative design: Encourage collaboration among workers with diverse skills, on innovative projects, and promote a “fail-fast” culture that experiments with new products and services to quickly gauge market response.
  • Deploy digital ecosystems: Use physical and virtual networks to build worker communities, deliver training, gather feedback, link new roles and tap additional talent when needed.
  • Encourage experienced workers to share knowledge with emerging talent:  Create a workforce culture that values experience and wisdom as well as innovation and creativity.

In my next blog post, I’ll discuss why organizations need to build partnerships to help them overcome the digital skills shortage. Meanwhile, take a look at this report. I’m sure you’ll find it useful.

Harnessing revolution: Creating the future workforce.

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