The corporate landscape is currently in the midst of a profound transformation, driven by the convergence of generations and the imperative to adapt to emerging skills and artificial intelligence. To help us understand the issue we asked Valerio Mancini, Director of the Divulgative Research Center of Rome Business School to shine a light on the new trends and market opportunities, in occasion of the Employment Report 2024
One of the central themes revolves around the need to bridge generational gaps in workplaces, a key element that emphasizes the critical need for a comprehensive understanding of evolving professional dynamics.
In Italy, over the past 20 years, workers aged 55 and above have surpassed 20% of the workforce, with a notable increase, especially among women. It is estimated that mature workers in Europe may constitute 35% of the total workforce by 2025. However, generational turnover is not a solution to youth unemployment.
In OECD countries, an increase in employment for those over 55 corresponds to an increase in youth employment and vice versa. Moreover, aging does not hinder innovation. In Italy, startups led by individuals over 50 continue to thrive.
The problem is that to address the issue of the generational gap, demand and supply need to be balanced. But the economic system of many countries, including Italy, is not capable of accommodating all this demand for qualified, ethical, and well-being-oriented work: it is a generational mismatch, the result of complex social processes, where the rise in the average level of education has not been accompanied by an upgrading of the production structure.
In this context, the good news, according to the annual report from the US consulting company Gallup, “State of the Global Workplace,” is that in 2023, global employment and job opportunities have increased, aligning with pre-pandemic development trends.
The downside is that stress and dissatisfaction among workers have also increased, reaching historic highs worldwide (44% of the total). Among the structural factors that have significantly contributed to reshaping the labor market is technological innovation, whose progress has accumulated rapidly in recent decades, challenging the job stability of entire groups of workers. Their roles have suddenly become vulnerable to replacement by new technologies.
This factor has had profound consequences on the labor market structure: technology has increased heterogeneity among different occupational groups, giving more centrality to occupations that were previously less prominent.
The research on the “Future of Work” (2023), conducted by the World Economic Forum, predicts a transformative change in the core skills of 44% of current workers over the next five years. Basic and technical training, including languages, digital knowledge, and soft skills, must be enhanced to maintain competitiveness.
Digital skills will play a central role due to their inherently transversal nature, particularly in the context of the Fourth Industrial Revolution. Automation, AI, and robotics will drive rapid change, impacting job roles. According to McKinsey, 22% of workforce activities in Europe could be automated by 2030, however, jobs are rarely entirely automated; machines tend to take over methodical tasks, reallocating workers’ time to more complex functions.
Thriving in any industry requires cultivating the top five skills for the future:
The adoption of advanced technologies and the advent of automation in the professional sphere remain key elements in driving business transformation in the coming years. Consequently, there is a crucial need to develop digital skills through strategic investments in education and a proactive response to the changing demands of the labor market.
Ensuring the well-being and retention of the workforce require comprehensive and efficient welfare packages. Companies should offer services such as daycare, physical wellness programs, flexible work arrangements, counseling, psychological support programs, training courses, and additional pay benefits.
In this regard, the case of Italy, a country deeply affected by a significant generational wage gap, is emblematic. To cope with economic instability, 37% of Gen Z and 23% of Millennials in Italy have at least a second job to supplement their primary source of income. Many of these secondary jobs leverage technology and social media platforms, such as e-commerce or ride-sharing.
Furthermore, although there has been much talk of “quit quitting” lately, nearly half of Gen Z and the majority of Millennials state that work is still central to their identity, albeit differently than in the past. Work is important, but flexibility comes first. Current challenges involve navigating sudden changes in the world of work, demanding increased attention and care from executives. Personnel management should transcend mere business needs and align with the evolving requirements of employees.
Efficient welfare packages are crucial for ensuring workforce well-being and retention. Italy’s case highlights significant generational wage gaps, with many supplementing income through secondary jobs leveraging technology and social media platforms. Nearly half of Gen Z and the majority of Millennials still view work as central to their identity, emphasizing the importance of flexibility.
Developing insight forecasts, identifying appropriate talent, and strategic hiring and retention of staff with interdisciplinary skills, digital acumen, and analytical proficiency are imperative. Specialization in computer science, automation, AI, and cloud technologies, along with robust soft skills like creativity, will drive future workforce competitiveness.
