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Over the past 50 years, work has evolved at an exponential pace. From remote workers and virtual meetings to concerns about emotional health and the emergence of artificial intelligence, today’s workplace is in uncharted territory. That’s why Dr. Ian O. Williamson, Dean of the University of California Irvine (UC Irvine) Paul Merage School of Business, assembled a series of essential essays that explore these seismic shifts for The Conversation on Work, published by Johns Hopkins University Press.

In the book, essays from top scholars explore a diverse range of urgent topics, including burnout and mental health, remote and hybrid working environments, unions, and job inequities among marginalized groups, as well as the effects of COVID and artificial intelligence on the future of our changing workplace.

“What we call work and what we actually do as work has changed dramatically,” says Williamson. “Over the last five to six years we’ve seen a change in the most fundamental areas. The actual work that workers do, the demographics of the individuals doing the work and the tools workers use have all shifted. All of that has generated a system where much of what we thought we knew about leading workforces has been rendered less relevant—or perhaps even irrelevant.”

Four Key Issues for Business Leaders

Williamson says these changes mean there are four issues business leaders must re-evaluate if they hope to remain profitable in the future. “The four most essential elements to consider are the work, the workers, the tools and the leaders,” he says. “The part that is probably most challenging is that, while the work, workers and tools have changed, it’s not clear the perceptions or capabilities of leaders have evolved at the same rate.”

Williamson and the book’s other contributors point out that the U.S. economy has shifted from a manufacturing economy to a service economy. “If you look across the U.S. today,” Williamson says, “the largest employers in most states are service organizations. That was not true 20 years ago. The economic drivers of our society are based on a fundamentally different set of activities from what we were doing in the ’70s or ’80s.”

However, Williamson notes, the approach many organizations adopt towards managing their workforces, particularly legacy organizations that have been around for 40 to 50 years, are often based on principles developed for manufacturing operations as opposed to service organizations. “If you look at how we’ve selected and trained our leaders, there is a disconnect between how we developed leaders in the past compared to what is needed today. In many organizations their approach to leadership simply has not changed at the same rate as the other three factors.”

Global Competition for Highly Skilled Young, Diverse Talent

Williamson sees the shift to a service-based economy as having a dramatic impact on the ability of organizations to attract a high-quality workforce. “If you are a service firm—a healthcare organization for example—you depend on the capabilities of highly skilled individuals,” he says. “You need a workforce with fairly high levels of education that can be retooled and retrained. The competition for those individuals is ruthless and global.”

The demand for highly skilled workers is fierce, he says. Current estimates suggest the IT industry, for example, will post more than 600,000 new job openings across the country in the next few years that cannot be filled. “We have historically thought of the USA as an attractive migration destination for workers, but the reality is most other developed economies are also service economies, and they are struggling as well. We’re in competition globally for skilled talent in a way we have never seen.”

This means our future workforce will become “extraordinarily diverse” by necessity, and “new talent will come from everywhere.” We won’t have the luxury of being picky about where new talent is located, he says. “As a leader, you have to spend a lot of time thinking about how to manage and lead a very diverse workforce in a way that perhaps you did not see even 10 years ago.”

In America, the growing challenge for many employers will also be finding young talent. “At the same time that America is becoming more diverse, we’re also aging,” Williamson says. “Globally, most of the developed economies are aging at a dramatic rate.” The number of young people is declining, “which puts tremendous pressure on organizations that historically have thought about filling entry-level roles with younger individuals who perhaps don’t have high levels of skill.” In this case, diversity isn’t the issue. Organizations just can’t find young workers. “They don’t exist. We don’t have the bodies.”

Adjusting to a Geo-Diverse Working Environment

All of this means going forward organizations will need to think very differently about how they manage their employees, especially when it comes to managing the diversity of needs individuals will bring to the workplace. Leaders must become skilled at managing a geo-diverse workforce, notes Williamson. “Today a worker in San Diego looking for a new job can feasibly interview for a job in Philadelphia and accept the new job offer without moving out of their house. In the past, it would have been incumbent upon the worker to move to another state for the job opportunity. They would have had no other choice.”

“The reality is very few organizations were actually set up with a geo-divers workforce in mind. We never thought about it. It wasn’t something we trained leaders to do. Leaders are asking ‘where’s the rule book on how to do this’?” He says, for most organizations, we have only been doing this at scale for the last three years, “so we haven’t had a chance to fully run this experiment. Managers are asking, ‘How do I inspire? How do I evaluate? How do I develop? What does career progression and succession planning look like? Can a person based in San Diego be the long-term leader of a business unit based in Philadelphia?’”

These kinds of questions are not academic for Williamson. He accepted his current job as Dean of the Merage School of Business in Irvine, California, while he was still living in New Zealand. “Because of COVID, I could not immediately move to the United States,” he says. “I started at UC Irvine in January, and I did not physically arrive on campus until late that year. With no prior experience with the university I led the business school in Irvine from Wellington, New Zealand, for over six months. During that time, we had to make many high stake and time sensitive decisions while investing millions of dollars in order to navigated the organization through the pandemic. I hired new members of my leadership team, none of whom I was able to physically meet until I arrived in California that August. But we were working together on a daily basis. This was not something we would have considered possible in 2000 or even 2015.”

Leaders Need Skills to Win ‘an Oscar, a Tony and an Emmy’

When Williamson accepted the position as dean, he had just completed work on a research project that examined the performance outcomes of teams that worked remotely compared to in-person teams. “It just so happened I finished that paper right before I started this job,” Williamson says. “I actually had to reread my own paper because I thought, ‘Wait a second. This is no longer abstract. I have to actually lead a team remotely from another continent on the other side of the planet.’”

Williamson learned from that research and his own experience that leaders need to develop a broader portfolio of capabilities to be effective in today’s workplace. “You need to be someone who can basically win an Oscar, a Tony and an Emmy,” he says. “If you think about your favorite actor or actress, there are actually very few people who are equally effective in a movie, a television show and a Broadway play. Yes, it’s all acting, but when you think about the skill set and what it takes for an actor to be on stage and captivate a live audience, that’s very different from what it takes to be effective in a twenty-minute sitcom versus what it takes for a person to be effective in a two-and-a-half-hour movie. It’s all acting, but it’s definitely not the same skill set for each.”

This metaphor applies to the different skills leaders need to develop to effectively manage their diverse workforce. “What we’re asking our leaders to do now is recognize that they have workers who need to be in person because the nature of their work requires it—and another segment of the workforce that will be remote or virtual. That means you have to learn to be effective interpersonally, and you have to learn to be effective on a Zoom call, and you have to be effective in a broader, more finessed way to inspire and motivate all of them. How many leaders have been formally trained to master this diverse set of skills? The reality is not many.”

Empathy Is the Key to Address Employee Wellness

Leaders need to evolve as quickly as possible to address more holistic aspects of managing a workforce, especially in terms of employee wellness, Williamson says. “In my mind, employee wellness is becoming more and more important. It’s almost impossible for you to be a service worker and not have your mental health, your emotional well-being and your physical health impact how you show up at work. All of it inherently shapes how you deliver the service that the organization is depending upon you to provide.”

To address these concerns, Williamson sees one specific skill leaders today will need to develop more than anything else: empathy. “We ask leaders to create work environments that enable service workers to use their discretion and come up with customized solutions for clients, however, it’s almost impossible for that to happen if the leaders don’t have empathy and can’t listen effectively,” he says. “If you are distressed because of something that’s going on in your personal life, or you’re not well physically due to a trauma in your life, that causes you to be emotionally and cognitively detached.”

“We used to think it was the employee’s job to figure out how to overcome the mental and physical traumas they faced in their lives. Now I think we are realizing that it is actually the leader’s job as well.’” Leaders can’t solve “every single” issue, but the good leaders have the foresight to invest in resources that help prevent employee’s life challenges from becoming “catastrophic or a detriment to the company.” In addition, “there’s a shortage of people to begin with, so a good leader realizes they can’t afford to lose any good employees. In order to be an attractive employer, organizations need to create as supportive of an environment as possible.”

Will Artificial Intelligence Displace Workers?

Many thought leaders suggest the worker shortage crisis might be solved by leveraging artificial intelligence to replace some lower-level jobs with automation. This has created a mild panic among workers who are terrified AI will take their jobs, but is that entirely true?

“Historically speaking, whenever we’ve had major technological breakthroughs, over the long term (5-10 years) that technology tends to generate more job opportunities than it destroys,” Williamson says. However, in the short term, he says, we often do see some displacement. “We may be tempted to assume this displacement happens at the lower-skilled jobs—the ones that will be displaced by things like robotics automation—but we are seeing the potential for some white collar, higher-paying jobs being impacted as well, perhaps even more so than some of the lower-level jobs.”

Ultimately, the way we respond to this may have more to do with whether we see AI as a threat to our jobs or as an augmentation. “This is a very important point because the way a group sees something is heavily influenced by the way the leader frames it,” says Williamson. “Our organizations need to think about how they invest in educational mechanisms to ensure their workforces have the ability to use AI tools to be more productive. This also helps mitigate some of the potential resistance and the perception of threat. Leaders play an important role in framing how individuals think about new technologies. Ideally, we want workers to think of technology as magnifying their skill sets, not replace them.”

In This Disruptive Period, Leaders Need to Develop Strong Listening Skills

As for the future of the global workforce, Williamson believes the real key differentiator for business leaders looking to gain a competitive edge is to simply develop their listening skills. “Let’s set the framework,” Williamson says. “Our civilization is still recovering from a traumatic global pandemic. We have a workforce that has some uncertainty. We’ve introduced AI and a remote workforce, and we have even broader geopolitical instabilities to deal with.”

Workers have huge questions about “the viability of our organizations.” In this environment, he says, “it is critical for leaders to be exceptionally transparent. It cannot be overstated how important it is for our leaders to understand how to express empathy because they will be asking for tremendous levels of discretionary effort from their workforce.” Workers “have the ability to leave, in most cases, but they will stay if they feel as if they are in an environment that is empathetic to their needs and understanding of their concerns.”

That doesn’t mean leaders should “fix” their employees’ problems. “Empathy is not solving your problem. Empathy is acknowledging and appreciating you are facing problems. Even acknowledging others concerns provides a sense of comfort and support, so while we have a lot of other things going on, if it’s your job to lead a group of people to accomplish a task, being able to have a sense of transparency, a sense of voice, a sense of empathy is crucial to enabling your workforce to be innovative and high performing during one of the most disruptive periods we have seen in recent history.”

The Conversation on Work, edited by Ian O. Williamson, will be published August 27, 2024, by Johns Hopkins University Press.