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Companies are "unprepared for the future of work", according to research commissioned by SAP.

Companies are "unprepared for the future of work", according to research commissioned by SAP.

Workforce 2020, a study by Oxford Economics paid for by SAP, says companies recognise the importance of managing an increasingly international, diverse and mobile workforce. However, "the majority lack the strategy, culture and solutions to do so".

Oxford Economics surveyed more than 5,400 employees and executives and interviewed 30 executives in 27 countries, finding that two-thirds of businesses have "not made significant progress" towards building a workforce that will meet their future business objectives.

“To gain advantage in the future businesses must understand the workforce of tomorrow and its importance to bottom-line success - today,” said Edward Cone, managing editor of thought leadership at Oxford Economics. “Our research shows that the C-suite is out of touch with HR on business strategy and priorities, and workers are not getting what they want from their employers in terms of incentives, benefits and training.”

The reseach says there are six top workforce issues facing companies.

According to Workforce 2020, competitive compensation is the most important attribute of a job to two-thirds of respondents - 20 percent higher than the next highest benefit. Retirement plans, flexibility and time-off rank well ahead of amenities such as fitness centres, daycare and subsidised food.

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If compensation is what motivates employees, what they are most afraid of is being left behind as a result of insufficient skills and inability to keep up with the latest technologies. “Becoming obsolete” is the biggest concern for today’s worker, twice as concerning as being laid off.

Secondly, although 51 percent of executives say that millennials entering the workforce greatly impacts their workforce strategy, fewer than one-third say they are giving special attention to millennials’ particular wants and needs - primarily because executives do not understand how they think.

Much has been written about how millennials are different in their use of technology and their attitudes towards work than past generations of workers. However, the Workforce 2020 study shows that they are "surprisingly similar" to their non-millennial co-workers when it comes to workplace priorities

Millennials and non-millennials alike cite compensation as the most important benefit. Additionally, 41 percent of millennials and 38 percent of non-millennials say higher compensation would increase their loyalty and engagement with the company.

Contrary to popular thinking, millennials are no more likely than non-millennials to leave their jobs in the next six months. And millennials and non-millennials have similar priorities in areas such as meeting career and income goals and meeting goals for advancement. The two groups have similar views on the importance of corporate values and achieving a work/life balance.

Next section: Failure to support the workforce

Failure to support the workforce

A third major concern is that few companies are "properly supporting their workers". Less than half of employees surveyed as part of Workforce 2020 say their company provides ample training on the technology they need, and less than one-third say their company makes the latest technology available to them.

The need for skills like analytics and programming/development will grow sizably over the next three years, but employees doubt the opportunity to gain proficiency in these areas. While executives cite a high level of education or institutional training as the most important employee attribute, only 23 percent say they offer development and training as a benefit. Incentives for pursuing educational opportunities are also uncommon.

Fourthly, there is a "leadership void". A lack of adequate leadership is cited by executives as the number two impediment to achieving their goals of building a workforce to meet future business objectives. Almost half of those surveyed say their plans for growth are being hampered by a lack of access to the right leaders within their organisations.

Only 31 percent of executives interviewed say that when a person with key skills leaves they fill the role from within the organisation. And less than half indicate that their leadership team has the skills to effectively manage talent or inspire and empower employees.

Fifthly, as the economy evolves to a state where nearly everything can be delivered as a service, companies will increasingly have to tap external expertise and resources to fill skills and resource gaps, and to accommodate rapidly changing business and customer demands.

That means more temporary staff, more consultants and contract workers, and even “crowd-sourced” projects. Of those companies surveyed as part of Workforce 2020, 83 percent of executives say they will be increasing the use of contingent, intermittent or consultant employees.

Last of all, the report says "compensation models, development and HR technology must change". Of the companies surveyed, 46 percent said they will require changes in compensation plans and 45 percent said they will require increased investment in training.

The research found 39 percent thought there would be changes to technology policies to support mobility and bring your own device, for instance, and 41 percent said there would be new investments in HR technology that can better support their changing strategies and needs - to address talent and performance management, learning and enhanced employee engagement.