Future of work report 2021 Future of work report 2021

THE FUTURE OF WORK REPORT 2021

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FIVE STEPS TO SUCCESS

‘There’s a whole infrastructure emerging’ – Soundbites from legal chiefs on ESG

On approaching ESG

On governance and the role of the GC

On non-financial reporting

On investor pressure

If you’re around the executive table you’re not there as a lawyer, you’re there as a member of the senior management team. It comes down to fully understanding the business from every level. When you can do that, and you’ve got a bit of legal, analytical knowledge, that’s when you can make a really powerful case to the business.

GC, public sector

When does the board talk about ESG? Every time we talk about strategy, which is every meeting. And because it’s so broad you need to monitor performance, create strategy, drive change.

GC, FTSE 100 banking group

GCs are afforded a view across everything. They are mostly afforded a view across the darkest stuff, which is helpful with ESG. They are allowed to talk to each other, they have the secrets of the company but no-one worries about GCs talking to other GCs and that network is powerful, albeit fractured

GC, property firm

It’s such a massive area – it’s not like a lot of the other risks that cross your radar. This is here to stay and it’s multi-faceted to the point where, honestly, it’s not even close to just being a legally-managed thing – there’s a whole infrastructure emerging in the company.

GC, global pharma group

In terms of ESG concerns – and Covid has put an accelerator on this – it is the trend towards actions not words. We all used to get away with just slapping something on a wall related to purpose and your five values, which would have integrity and trust in there and everyone would have the same, a nice little acronym in lovely colours.

GC, FTSE 250 business services group

For years it was all about: ‘Do the right thing.’ Now we’re back in the foothills of compliance with some of the EU legislation on supply chains and directors’ liabilities. And once we get to directors’ liabilities it becomes more of a compliance issue but I’m not sure that is yet understood.

GC, FTSE 100 retailer

My approach has been to stay enough ahead of the ESG curve to not get slapped across the back but I’ve got to get better at it.

GC, US pharma firm

Used correctly, ESG is a pretty holistic filter for how you want to run your business to cover all manner of risks that would sit across the principal risk register of a listed firm.

GC, property firm

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We’re living in a dreamworld about how much work this is going to be. I’m worried about our reporting and making sure we are presenting shareholders with an accurate picture and that’s going to be my responsibility together with the head of investor relations. That’s going to be a big piece of work.

GC, FTSE 250 retailer

If I think back to what we were disclosing two or three years ago, we’ve moved on night and day.

UK GC, global banking group

The trick is keeping up with the new regulations but we’ve spent a lot of time, staff and resource on this because of the nature of our business. This is one of the main things that we get questions on, so we are in as good a shape as we can be and we put a lot of attention and focus on it.

UK GC, global energy firm

I can’t point at other companies and say: ‘They’re doing well,’ because I don’t always believe these companies. I believe they are setting these lofty goals and they’ll get to 2026 and be like: ‘… we didn’t hit it.

GC, US pharma firm

The impact of clearer benchmarks for investing? To settle that would be huge.

Deputy GC, UK financial regulator

You get some who will listen and others who say: ‘Sorry, it’s on Google, I’m giving you a red flag.’ That engagement with the proxy agencies and understanding the bigger shareholders is key.

GC, FTSE 250 business services group

Our deliberately head-in-the-sand approach to it several years ago was shared by a number of fund managers but I don’t know anyone now who would stand up and say: ‘I definitely don’t take ESG into account.’ That kind of 1980s attitude has fortunately disappeared.

GC, sovereign wealth fund

I tell investors: ‘You should be asking how I am doing with my life-saving drugs and can people get access to them. I try to bring people there but these folks are all about the carbon.

GC, US pharma firm

Our first survey into workplace activism in 2019 was conducted when the world of work was undergoing transformation on a scale not seen since the Industrial Revolution. This technology-enabled workplace, defined by staff with differing priorities to previous generations – and willing to express their views through social media – was a critical challenge for employers. Then came Covid-19. For labour markets, the pandemic was an earthquake, accelerated existing trends – notably remote working and the focus on worker wellbeing – and distorted others, such as the rise of the gig economy. Many of these changes will be lasting. The pandemic shook up working conditions overnight but many of these shifts have profound long-term implications for the employer-worker relationship, legally, ethically and morally. The pandemic was by no means the only show in town. 2020 saw the Black Lives Matter movement and climate change protests held in cities around the world. It saw the UK Supreme Court rule that Uber drivers should be classified as workers, the beginnings of unionisation at Google, and continued unionisation efforts at Amazon. Millennials moved closer to becoming the dominant generation in the workforce and were joined by millions of Gen Z – generations with strong views about the environment, politics, social issues and values. These shifts have been subject to much discussion and raise novel questions. Will the employee empowerment seen in the past year endure? Have we entered a new era of corporate responsiveness to social issues? This report also finds employers already asserting new methods of control with their remote, dispersed workforces on a scale without precedent, in some cases taking steps that risk severe repercussions from increasingly assertive and mobile staff. Buffeted by events though companies are, labour markets have never required such thoughtful and creative responses.

18 months of upheaval in the shape of the pandemic has led to big questions for employers across the globe – many are still unsure how to answer.

The Future of Work – Headline findings

Two years ago, employers were very clear about the issues that were likely to trigger activism in the workplace. In 2021, respondents expect to experience activism, but are far less certain about what might cause it. This is compounded by the impact of Covid-19 on the workplace – the pandemic distracted us from critical emerging trends and clouded our view of the future.

REMOTE/ CONTROLLED

Hybrid working, digital surveillance and corporate advocacy challenge post-pandemic talent strategies and the bonds of employee trust. We explore the workplace of the 2020s.

...our CEO, Justin D'Agostino and Executive Partner, Alison Brown

Emerging flashpoints for activism

How the world has changed

ESG & stakeholder capitalism

Employee surveillance & monitoring

Wellbeing

Rights in a hybrid working model

18 months of upheaval

Methodology and data explorer

AUSTRALIA

Data here

Default summary content

The new trust equation

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

Activism is still seen as a significant risk to corporate reputation

Employers are taking active steps to mitigate the risk of activism

It’s clear that workplace policies are changing rapidly and employers are introducing, or planning to introduce within the next few years, initiatives that will have a profound impact on the worker/employer relationship

33% see workforce issues as a threat to reputation

40% describe their level of restrictions as ‘high’

94% of employers have measures in place to control or restrict worker actions

Only 37% see activism as a positive force for change

84% plan to measure output rather than time worked

82% plan to introduce digital tools to measure wellbeing, raising new questions about monitoring

49% plan to differentiate pay between remote and office-based workers

THE NEW TRUST EQUATION

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights under a hybrid working model

Emerging flashpoints for activism

read the full introduction

Your guide to tackling the Future of Work

VIEWS FROM...

Oct 2019 - Herbert Smith Freehills' first Future of Work report published

Jan 2020 - First impeachment trial of President Trump commences

Jan 2020 - WHO warns of a global health emergency

Jan 2020 - More than 70% of the global population now live in countries where the wealth gap is growing, according to the UN’s World Social Report.

Dec 2020 - UK leaves the European Union

Mar 2020 - WHO declares Covid-19 a pandemic. China begins its first vaccine trials in humans

Apr 2020 - Australian Fair Work Commission Full Bench rules an Uber Eats driver is an independent contractor

Jan 2021 - Google engineers unionise

Jun 2020 - Half a million people attended Black Lives Matter protests in nearly 550 US locations on 6 June. Surveys suggest that between 15 million and 26 million people in the United States have now participated in Black Lives Matter demonstrations, possibly the largest movement in US History.

Sep 2020 - School children and young activists hold a day of climate strikes around the globe

Sep 2020 - International Labour Organisation reports that working hours equivalent to 495 million jobs were lost in the second quarter of 2020 - 14% of the world’s entire workforce

Nov 2020 - Joe Biden elected US President

Jan 2021 - Second impeachment trial of former President Trump

Feb 2021 - UK Supreme Court rules that Uber drivers are workers. In Australia, Menulog begins the process to move its ‘on demand delivery’ drivers to an employment model

Sep 2020 - Covid deaths globally pass 1 million, according to John Hopkins University

Oct 2020 - Delta variant of Covid-19 first identified

Mar 2020 - Harvey Weinstein sentenced to 23 years in prison in New York after being found guilty of rape and sexual assault

May 2020 - George Floyd killed in Minneapolis

Mar 2021 - Teen ‘mastermind’ behind the great Twitter hack sentenced to three years in prison

Mar 2021 - World Economic Forum reports that the time to close the global gender gap has increased by a generation – from 99.5 to 135.6 years – due to the pandemic

May 2021 - Australian Fair Work Commission rules that a Deliveroo rider is an employee

Jul 2021 - World Bank reports that the global economy faces annual losses of US$2.7 trillion by 2030 if ecological tipping points are reached and countries fail to invest more in protecting and restoring nature.

Mar 2021 - 200 protests against gender violence, harassment and inequality held in towns and cities around Australia

Apr 2021 - Covid deaths globally pass 3 million, according to John Hopkins University

Jun 2021 - Madrid protests: thousands rally against Catalan pardons

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Our team of experts are ready to share further insights based on deep understanding of the pressure points across industries and regions. Get in touch to continue the conversation.

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DATA EXPLORER

Based on over 375 interviews with senior leaders across the world, our report analyses the key trends shaping the future of the workplace. Use this tool to dive deeper into the data and discover how employers in your region answered a selection of our survey questions.

EXPLORE THE DATA

81%

of respondents said they expected to see a rise in employee activism in the coming three to five years

93%

respondents in Asia and 88% of those in North America expect to see an increase in activism, compared to 63% in the UK and 61% in Australia

Feb 2021 - International Court of Justice dismisses US preliminary objections in Iran v United States.

Feb 2021 - India's sectoral reforms spark the largest workers protest on record.

Jul 2021 - Extinction Rebellion: activists begin two weeks of protests 'targeting root cause of climate crisis'.

Aug 2021 - China imposes new restrictions on social media usage with international ramifications

Aug 2021 - The UN Secretary-General says the latest Intergovernmental Panel on Climate Change (IPCC) report is "a code red for humanity".

Aug 2021 - US withdraws from Afghanistan, bringing an end to 20-year war

Sep 2021 - More than 140,000 French citizens protest against health pass for 8th straight weekend

2025 75% of the global workforce will be Millennials

Aug 2021 - Protests rise against Tokyo Olympics as Japan struggles with Covid-19

Aug 2021 - Prosecutors drop sexual assault case against ex-Alibaba manager

In 2019,

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This year

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Unprecedented. That was how the changes rolling across the workplace looked in October 2019, when we launched our first report on the future of work. In a matter of weeks these shifts seemed pedestrian, as Covid-19 gripped the world. Lockdowns in 2020 and 2021 forced entire industries to adapt to remote working in a matter of days and, for many, to shut down entire sectors. These restrictions have been challenging. They have upended long-held beliefs about how well staff could perform remotely without close monitoring and supervision, and tested the resilience of many whose homes and jobs were less suited to long-term remote working. The pandemic has also led employers to question the extent to which government intervention in private sector operations will be a momentary public health response, or a long term ideological shift. Employers are still wrestling with the significant issues of how they – and their staff – return to work (but not necessarily to offices or on the same basis) as the pandemic recedes. But as our 2021 report notes, the pandemic has simultaneously obscured some ongoing developments and accelerated other cultural shifts. The trends of hybrid work, cyber-related risks, digital monitoring and surveillance of staff, and a more assertive workforce preceded the pandemic although they have been sharpened by it. Similarly, the focus on corporate purpose that we identified in our 2019 report has only intensified as the pandemic intensified the social toll on many workers. C-suites are searching for clarity as they wrestle with issues such as corporate advocacy on ESG-related topics, and how to inspire and engage a workforce that has never been more difficult to bring together physically and culturally. For instance, our report found that nearly half of employers intend to vary pay for remote and office-based workers, a tactic that risks severe stress to the culture of most firms without thought and planning. Tactics can get you through the week, but these times require strategic vision to ensure businesses continue to thrive in the years ahead. The employers that succeed in the future will ultimately view adapting to such organisational challenges as less a matter of compliance and more one of securing competitive advantage. Considering the responses from more than 375 firms and dozens of senior interviews in our research, it is clear we remain a long way from reconciling the conflicting forces reshaping work. But we hope that this thought-provoking investigation provides some illumination for those managing the confounding, evolving modern workplace.

VIEWS FROM...

Do you trust your employer? The issue speaks to the contradictions at the heart of the modern workplace. Current generations have never placed such high hopes in their employers when it comes to social obligations and treatment of staff. And yet that trust has never been so easily lost, with workers quick to condemn perceived failings and hypocrisy and, unlike previous generations, possessing the digital tools to publicise their disillusionment. And while many looked to their employers for certainty and support during Covid-19, pandemic-induced changes have further blurred boundaries of home and work, challenging even the most conscientious employers to handle these issues sensitively. If many have for months been not so much working from home as living at work, how are employers to navigate this treacherous terrain, clouded by emerging office etiquette and norms? Our new report on the future of work offers some insights, with employers on one hand being inclined to trust their staff to work in a wider range of contexts, for example focussing less on hours worked, while on the other hand looking to new digital tools to measure productivity. Other thorny issues facing firms include supporting staff with Long Covid, tackling inequalities aggravated by the pandemic and addressing radically changing expectations regarding care of staff’s mental health. How such issues will be ultimately resolved is unclear but what is already starkly apparent is that companies will have to deal more directly in ethics and values with their staff in a manner that seemed improbable just a decade ago. The most successful employers will view the new expectations they must shoulder as less a burden and more a powerful force to bind their organisation together.

Justin D'Agostino, CEO

Alison Brown, Executive Partner

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Much has already been written about the impact of Covid-19 on the world of work, but the pre-pandemic workplace was not a benign environment. Our 2019 survey showed the disruptive effect of automation in the workplace, the growing levels of work-related activism across the globe, and the role of social media as a powerful megaphone for workplace issues. The potential flashpoints for activism we highlighted then – diversity, the treatment of contract workers, the pressure on companies to ‘do the right thing’ not only for their employees and customers, but for wider society – have, if anything, grown more intense over the past two years. As a firm we have advised on numerous investigations, and government policy consultations, into bullying, discrimination and harassment issues, as both one-on-one incidents within organisations and wider cultural and sectoral issues. "In some cases, these issues have been identified not through internal or whistleblowing processes, but through social media" comments Emma Röhsler, Partner and Head of Employment EMEA, Herbert Smith Freehills. The Covid-19 pandemic acted as a powerful catalyst to existing trends. Early studies suggest that remote working could be a lasting legacy; a survey of more than 32,000 workers in 19 countries found that just 9% want to return to a traditional commute and full-time work.

The proportion of respondents who expect to see an increase in employee and non-employee activism has fallen in every region except Asia and the US since 2019. "This could be a function of the pandemic, as many employees were isolated or furloughed, and perhaps less likely to use their voice in and about the workplace" comments Barbara Roth, Head of Employment US, Herbert Smith Freehills. While employers have taken steps to engage and create effective internal channels to address issues (70% say they are active on external and internal employee forums, compared with 39% in 2019), "it is possible that a new wave of activism may hit as people return to the workplace and as employers make changes to reflect their new normal." This seems to be on the mind of employers – their concern about the potential impact of activism has increased significantly. Workforce issues are now seen as a risk to corporate reputation by a third of respondents (figure 1), compared with 55% in our 2019 report. Even so, in 2019, 49% saw activism as a positive force for change; this has now fallen to 37% – and 34% see activism as a risk to be managed.

HAS ACTIVISM PEAKED?

Around the world, employers are reassessing working models; this year’s survey shows that 42% of all respondents (and 48% of those in Australia) said that they plan to substantially change their approach to flexible and remote working within the next three years. The workplace issues we highlighted in 2019 have not gone away, and have been joined by an even more complex set of challenges. Our survey reveals some early signs of the ripple effects of rapidly changing working practices; 42% of respondents, for example, are planning to substantially change their compensation and benefits structure and 39% are reassessing their recruitment and use of contract and agency workers.

As a result, companies are putting active measures in place in an attempt to manage what their employees and workers can say or do. In 2019, only 46% of respondents said that they had put in place measures to restrict or control employee and/or worker actions (such as attending marches, signing petitions, or making public comments on specific issues). Today, 94% of respondents have these measures in place and 40% describe their level of restrictions as ‘high'. This willingness to introduce formal measures to control employee and worker actions can be seen across all regions (figure 2). A third of employers (33%) also say that in the next three to five years, they will substantially change their thinking and approach on the private conduct of workers and free speech. Companies including General Motors have already begun to include guidance in their code of conduct addressing social media and comments made outside the workplace.

Our 2019 report highlighted the role of social media in activism and the concerns of employers; 95% expected to see an increase in employees making their voices heard through social media. The recent focus on ‘cancel culture’ adds a further dimension in terms of the implications for bullying and workplace discrimination. This is a complex area. While employees generally rely on codes of conduct to specify appropriate use of social media by employees, the stakes are much higher when corporate reputation is under scrutiny. When we asked respondents about a specific hypothetical scenario involving employees’ social media discussions (see here), more than half said that they would admonish employees for speaking out publicly. “Taking action against staff for their comments on social media is fraught with difficulty,” says Fatim Jumabhoy, Head of Employment Asia, Herbert Smith Freehills. “Doing so may heighten the focus on the original comments and result in wider coverage, in social media and the press. At the very least social media policies or other related policies should be clear on what is permissible and what is not, and prohibit discriminatory comments. Unless employees are publishing on behalf of the employer with consent, they should make clear their comments are personal.”

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FUTURE OF WORK REPORT 2021

Pandemic upheaval has obscured workplace trends, even as it drives long-term shifts.

How the world has changed

In some cases, these issues have been identified not through internal or whistleblowing processes, but through social media.” Emma Röhsler, Partner and Head of Employment EMEA, Herbert Smith Freehills

This could be a function of the pandemic, as many employees were isolated or furloughed, and perhaps less likely to use their voice in and about the workplace.” Barbara Roth, Head of Employment US, Herbert Smith Freehills

Taking action against staff for their comments on social media is fraught with difficulty.” Fatim Jumabhoy, Head of Employment Asia, Herbert Smith Freehills

Figure 1: In which of the following areas do you see the biggest potential risks for corporate reputational impact in the next five years?

The UK's largest craft brewer has come under fire from over 60 former employees who say in an open letter to founder and CEO James Watt that the businesses had created a culture of fear that made staff feel afraid to speak out . In their letter to BrewDog, they claim workers have been subject to harassment, assault and treated "like objects" and that Watt had “become a lightning rod for some of the worst attitudes present on both the internet, and in real life." BrewDog is conducting an anonymous staff survey of its culture and will commission an independent review of its culture and HR practices.

CASE STUDY

One of the major challenges for employers is understanding where the potential for activism could emerge in a world that has been so suddenly disrupted. This can be seen when we compare what respondents see as the major triggers for activism in 2021, compared to 2019 (figure 3). Two years ago, the future seemed relatively clear; advancing technology and its potential to replace some roles and enable greater monitoring of employees was seen as the biggest concern. Today, employers are less sure of where the next threats will come from. This confusion is the strongest indication of the disruption companies have experienced over the past year or so. The changes brought about by the pandemic were so sudden and acute that organisations and their leaders are still assessing what the long-term legacy will be. But by looking beyond the pandemic and factoring in broader business, geopolitical and demographic trends, clear warning signs emerge – significant flash points that are likely to act as a lightning rod for activism in the next few years. Organisations’ response will need to be carefully constructed and informed by regional and sector developments. Respondents from the consumer and retail sector, for example, say that they will be changing their approach to address workforce challenges in the next few years. Respondents from the banks sector, by contrast, are looking at flexible working and compensation structures.

THE FLASHPOINTS

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The new trust equation

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

Ethical business conduct

Biggest risks for corporate reputation

CSR

Workforce issues

Supply chain issues

Global economic slowdown

Geopolitical events

Regulatory intervention

Cyber threats and data loss

Sustainability / environmental

46%

of respondents said that they had put in place measures to restrict or control employee and/or worker actions (such as attending marches, signing petitions, or making public comments on specific issues)

In 2019,

94%

of respondents have these measures in place and 40% describe their level of restrictions as ‘high’

Today,

42%

of all respondents (and 48% of those in Australia) said that they plan to substantially change their approach to flexible and remote working within the next three years

In 2019,

39%

are reassessing their recruitment and use of contract and agency workers

In 2019,

The Covid-19 pandemic acted as a powerful catalyst to existing trends.

2019

2021

Figure 2: To what extent do you restrict or control employee/worker actions, including public comments, attending marches, signing petitions, picketing, strike action, etc?

2019

100

ME and Africa

Asia

Australia

Europe/UK

Total

No restrictions

Moderate restrictions

High restrictions

2021

100

Asia

Australia

EMEA

North America

Total

No restrictions

Moderate restrictions

High restrictions

Figure 3: What do you perceive to be the key triggers for increased employee/worker activism over the next five years?

CSR/ environmental

Pay and benefits

Surveillance and monitoring

Automation and AI

Terms of contract workers

Objections to strategic

Discrimination

Lack of diversity

Vaccination certificates

FIVE STEPS TO SUCCESS

Your guide to tackling the Future of Work

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

The new trust equation

A number of employees who have suffered from symptoms of stress, isolation and overwork while working for your organisation have set up a support group to help each other and colleagues with wellbeing concerns. While this group was initially internal, the discussions have spilled over into public social media and are attracting media attention – potentially damaging the employer brand. Respondents’ strategic response to the hypothetical crisis shows the increasing tendency for employers to bring the discussion in house as far as possible – 49% say that employees would be asked to refrain from public discussion, and 51% – rising to 68% in the US and 57% in Asia – said that their employees would be admonished for speaking out publicly.

Scenario 1

As part of our survey we posed hypothetical scenarios to garner further insights.

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In 2019 almost half of employers expected ESG concerns to be a magnet for employee activism in the future. The momentum for stakeholder capitalism and purpose over profit was growing, the view that sections of society had seen no benefit from globalisation was fuelling populism, and several companies (including Google) had seen their employees protesting decisions that they felt were not in keeping with the company’s mission statement. This was indicative of a paradigm shift underway to values and ESG-powered activism. "Workplaces have become the frontline in culture wars and social activities such as #MeToo," says Gillian Miao, Counsel, Employment at Herbert Smith Freehills Kewei Joint Operation in Shanghai, PRC. The protests have not stopped; as recently as May 2021, thousands of school children in 110 countries took part in a coordinated school strike, calling for more action on climate change. The corollary is as younger generations come through to employment, they may show a much greater understanding of the importance of the issue, "posing risks for corporates taking stands on some areas where the 'correct' view is more debated and, or the difficulties where pressure to take a certain stance might adversely affect profitability and shareholders value and more importantly the reputation of corporates," says Miao.

INTRODUCTION TO THE REPORT

We believe that if it were not for the pandemic, activism around social and environmental issues in some regions would be a bigger concern for employers, both as a trigger for activism and a risk for corporate reputation. The fact that the Black Lives Matter protests made such an impact during a global pandemic is a strong indication of the strength of feeling. “After the BLM protests we saw a material shift in discussions around diversity and inclusion internally, which I’ve never seen before,” says Doug Evans, General Counsel at Hays Group. “That awakened everyone to the issue, and that’s a good thing. It was the milestone event during lockdown.” Country by country, local issues have also triggered a heated community response, from London, New York and Belarus to Bangkok, Hong Kong and Sydney. For employers, the position on each issue will vary, and the challenge is to manage local workplaces in line with both local regulation, cultural sensitivity and with global corporate standards. "Opinions on issues like diversity tend to be polarised, which creates a dilemma for employers,” says Tony Wood, Partner, Employment, IR & Safety Australia, Herbert Smith Freehills. "Whilst, superficially, it's difficult for employees to disagree with most employers' general statements in support of 'diversity', many employees are wanting to advance causes by going harder, faster. This creates the scope for friction. Some employees might not agree with a company’s public voice (or inaction) on a particular topic. How do you navigate that? Could that result in activism among a minority? And if a company speaks out on a subject, employees will look at whether it is ‘walking the walk’. If the employer’s actions aren’t consistent with what it says, the risk of activism or public criticism will be higher."

While 46% of respondents see sustainability and environmental issues as a risk to corporate reputation, only 31% (compared with 46% in 2019) see this as a trigger for activism. This may be a consequence of stronger environmental policies and communication from many organisations, but the fall in emissions during the pandemic may also have played a part.

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FUTURE OF WORK REPORT 2021

Workers will increasingly demand that employers take stands on social and geopolitical issues, whether businesses like it or not.

ESG and stakeholder capitalism

Workplaces have become the frontline in culture wars and social activities such as #MeToo”. Gillian Miao, Counsel, Employment at Herbert Smith Freehills Kewei Joint Operation in Shanghai, PRC

One of the biggest hidden risks for employers is in the ‘social’ aspect of ESG, partly because legislation in this area is less developed than environmental and governance regulation. The #MeToo, #StopAsianHate and #BlackLivesMatter movements have propelled diversity up the corporate agenda. Regulators, too, are beginning to take action; for example in order to "accelerate the pace of meaningful change, the UK’s financial services regulators are consulting on a number of initiatives, including the introduction of targets, and, more controversially, assessing candidates for approval as a senior manager taking into account their individual diversity within the context of the diversity of the board/senior management they plan to join", says Jenny Stainsby, Partner and Global Head of Financial Services Regulatory, Herbert Smith Freehills. As an added complication, the pandemic amplified the role that companies play in society and their responsibility for the safety and wellbeing of the people who work for them (the share price of Deliveroo, for example, fell by over 30% in the first day of trading, partly attributed to investor concerns about its ESG policies). It also highlighted the societal value of some professions, such as healthcare and elderly care, and food distribution and delivery, creating the potential for unrest over relative pay.

Beware of the ‘S’

Corporate advocacy will continue to increase. Companies will be required to take a stand on issues. Before, it was OK to say nothing – it made you neutral. But what Millennials have said to us is, if you say nothing, you are actually saying something” General counsel at a global news and business intelligence business

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How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

In October 2020, LH Technik maintenance workers refused to repair a Boeing 737 that had landed at Hamburg airport because the plane was part of the governmental fleet of Alexander Lukashenko, the President of Belarus. The trade union Verdi released a statement which said: ‘Although we, the activists of the Lufthansa Technik campaign, are having a hard time negotiating with the employer in the face of the economic crisis, we do not forget the long tradition of international solidarity and stand side by side with Belarusian workers.’ The Union added that it expected the LH Technik management to ‘refrain from any sanctions if employees refuse to work with the relevant aircraft.'

Political activism at a major airline carrier

We are seeing more questions about politics and values during the recruitment process” Head of Human Resources at a global investment bank

Had life carried on as normal we would expect to see this discussion rise up the agenda, yet in 2021 only 31% of employers (rising to 35% in EMEA and 36% in Asia) identify societal and environmental issues as a potential trigger for activism. Even so, respondents identify sustainability and environmental issues as the biggest potential risk to corporate reputation. “We are seeing more questions about politics and values during the recruitment process,” says a head of human resources at a global investment bank. “Subjects such as climate change and diversity are big subjects, increasingly coming up during candidate interviews which the bank is responding to, changing mindsets and through change management, including via CEO communications.”

These are emotive issues. Companies are becoming drawn, willingly or unwillingly, into political and social discussions, and this raises complicated ethical and moral dilemmas. The concern is that many employers are not taking active steps to address the potential for activism before it spills into public discourse. Less than three quarters, for example, have a formal mechanism for employee consultation – and for contract workers, barely half (figure 4). "Forums established by employers to consult with employees on general workplace issues can raise thorny issues, including; requests for voluntary recognition of trade unions or other employee representative bodies, especially if the workplace forum has limited powers in the event of a dispute, comments Andrew Taggart, Head of Employment UK, Herbert Smith Freehills. Another interesting statistic coming out of our survey is that 50% of respondents indicated that they are considering consulting with non-permanent (contract) workers as well as employees. This potentially raises a wide range of novel issues and has further implications for employers. Organisations will need to consider these issues and implications carefully. Andrew also states, "Employers should regularly review their industrial relations situations and consider whether they need to update their communication and consultation strategies in light of developments and trends in workforces and workplaces."

In March 2021 Myanmar's incumbent government, the Junta, suspended 212 Central Bank staff for going on illegal strikes as part of the civil disobedience movement against the regime. This ranged from assistant directors to cleaners for failure to perform their duties. The Central Bank, as well as other regional agencies and employers, dismissed a number of employees for attending nationwide general strikes that had not been approved by the incumbent government and warned its employees of its zero-tolerance approach.

Tension during Myanmar protests

31%

of employers (rising to 35% in EMEA and 36% in Asia) identify societal and environmental issues as a potential trigger for activism

50%

of respondents indicated that they are considering consulting with non-permanent (contract) workers as well as employees on general workplace issues

30%

in the first day of trading, partly attributed to investor concerns about its ESG policies

46%

of respondents see sustainability and environmental issues as a risk to corporate reputation

In 2021 only

Deliveroo share price fell by over

The new trust equation

Figure 1: In which of the following areas do you see the biggest potential risks for corporate reputational impact in the next five years?

Ethical business conduct

CSR

Workforce issues

Supply chain issues

Global economic slowdown

Geopolitical events

Regulatory intervention

Cyber threats and data loss

Sustainability / environmental

2019

2021

Biggest risks for corporate reputation

Figure 4: Have you established a formal forum or mechanism for employee/worker activism consultation, such as workers on Boards/Works Councils, etc?

EMEA

North America

Total

Asia

Australia

Figure 2: To what extent do you restrict or control employee/worker actions, including public comments, attending marches, signing petitions, picketing, strike action, etc?

2019

100

ME and Africa

Asia

Australia

Europe/UK

Total

No restrictions

Moderate restrictions

High restrictions

2021

100

Asia

Australia

EMEA

North America

Total

No restrictions

Moderate restrictions

High restrictions

FIVE STEPS TO SUCCESS

Your guide to tackling the Future of Work

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

After the BLM protests we saw a material shift in discussions around diversity and inclusion internally, which I’ve never seen before...That awakened everyone to the issue, and that’s a good thing. It was the milestone event during lockdown.” Doug Evans, General Counsel at Hays Group

The new trust equation

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The ability to monitor the location, activity and communications of workers through technology was seen as a potential trigger for activism by half of companies in our 2019 survey. In 2019, a number of countries were already exploring legislation that set out the circumstances in which electronic surveillance and monitoring should be permitted in the workplace. Today, 35% of respondents expect surveillance and monitoring to be a trigger for activism, rising to 40% in Australia and 41% in the UK. The huge shift towards remote working during the pandemic complicated the landscape significantly. Generally, allowing people more responsibility and authority for their own work product was a success. But sales of software designed to monitor activity and productivity (including webcam access, random screenshot monitoring, and keystroke monitoring) soared during 2020 – one company in Australia said requests for trials of its software increased by 200% in two months. Given hybrid working is likely to continue – our survey shows that employers are adapting their workplace strategy to accommodate hybrid working models (figure 5), including paying for output rather than hours worked – it’s highly likely that surveillance and monitoring will increase. The question is how far can this trend go – could we soon see a world where smart contracts, for example, mean that workers are paid according to output? And how will employees and workers feel about this level of surveillance?

INTRODUCTION TO THE REPORT

Covid-19 and the implications for sensitive employee data

The pandemic raised complex questions about employers’ responsibilities for the welfare of their workers, and their rights when it comes to mandating testing, vaccinations and health certificates. Mandatory testing was accepted in many jurisdictions (with Asia being a notable exception) during the pandemic on public health grounds. "Generally, employers had no explicit contractual rights to require testing of employees or workers, but an implied right to issue a 'lawful and reasonable' instruction to employees to be tested," comments Nerida Jessup, Special Counsel, Work Health and Safety Australia, Herbert Smith Freehills. The 'reasonableness' of any such direction will depend on individual circumstances, but foremost is the statutory obligation to maintain a safe workplace.

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FUTURE OF WORK REPORT 2021

Employers face tough choices to balance cultural values with legalities of data use to monitor productivity.

Employee surveillance and monitoring

Space for one graph, illustration or logo.

We do not systematically monitor staff. In Germany you would run into really big regulatory problems with monitoring and surveillance of employees, including in relation to the Works Council. Our monitoring is really about targets and key performance indicators. I don’t need to know when my employees are 'on', I just want them to complete their tasks on time and correctly. We have had no issues concerning productivity, it has really worked throughout the Covid-19 pandemic.” Head of Human Resources at a global investment bank

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How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Miriam Everett, Global Head of Data and Privacy, Herbert Smith Freehills, points out that data protection laws such as the GDPR place tight restrictions on the extent to which employers can lawfully monitor their employees in many jurisdictions: “But the key to navigating the legal requirements is transparency to employees about the nature of the monitoring that is taking place and the purposes for which is being carried out, limiting it to only what is strictly necessary for business needs." "But it’s not just about the legal considerations – there is an ethical question around the level of monitoring that is appropriate, even if legally permissible," adds Tim Leaver, Partner, Employment UK, Herbert Smith Freehills. Productivity monitoring raises many difficult questions: How should collaborative work be measured? Could monitoring cause friction among teams? Could the system be gamed? If the focus is on output measurement, does that reduce the need for managers? This is a complex area with the potential for unintended consequences – careful planning and analysis will be essential.

If employees were required to disclose their antibody or vaccination status for Covid-19, does that mean that all health data is open for discussion? As employees return to the office, what employer instructions will be acceptable? Regular Covid-19 testing? Vaccination? Mandated use of a tracing app? This comes at a time when the collection, use and storage of biometric data (including voice, fingerprint and facial recognition) is rising up the legal agenda. In Europe and the UK, the GDPR and implementing legislation covers biometric data, while in the US, individual states are taking a close interest in similar legislation. Specific legislation covering biometric data is less common in Asia, although the Hong Kong Privacy Commissioner of Personal Data has issued guidance which says that biometric data can only be collected for a lawful purpose related directly to its function and activity and after a full explanation of the personal data privacy impact of its collection. In Australia, privacy legislation applies to biometric information, including requiring consent for its collection, except in limited circumstances. In 2019, the Full Bench of the Australian Fair Work Commission ruled that a worker was unfairly dismissed for refusing to consent to the use of his biometric data for recording attendance at work.

The Illinois Biometric Privacy Act (BIPA) has been the basis for a growing number of class action suits in the US. Two significant settlements were reached in the first half of 2021; in February Shutterfly, a digital photography and image sharing company, reached an undisclosed settlement in principle after two plaintiffs, one of whom did not have a Shutterfly account, alleged that the company had stored their biometric data from its facial recognition software without their consent. In the same month, ByteDance Ltd, the parent company of the video sharing platform TikTok, settled a class action suit for US$92 million. The class action suit claimed that TikTok had collected, stored and disclosed users’ facial scans without their consent. While Illinois is currently the only US state that allows consumers (which includes employees) to claim damages if their biometric data is taken without their consent (on the basis that once biometric data such as a fingerprint or facial recognition scan is compromised, the individual is at greater risk of identity theft because, unlike a password, it cannot be changed) other states including California and Texas have also introduced legislation that introduces rights of action. BIPA requires a written release before a private company can capture biometric information, and it must be destroyed once the purpose of its original use has been satisfied, or within three years of the user’s last contact with the company.

BIPA leads the way

35%

of respondents expect surveillance and monitoring to be a trigger for activism, rising to 40% in Australia and 41% in the UK

Today,

200%

One company in Australia said requests for trials of its software increased by 200% in two months

Increased by,

The new trust equation

Figure 5: To what extent do you agree with the following statements?

We plan to use digital tools to monitor wellbeing

We have already empowered workers to self determine their working environment, hours & holidays

We have redefined our core working hours

We plan to measure output rather than monitor hours worked

Figure 4: Have you established a formal forum or mechanism for employee/worker activism consultation, such as workers on Boards/Works Councils, etc?

EMEA

North America

Total

Asia

Australia

Figure 2: To what extent do you restrict or control employee/worker actions, including public comments, attending marches, signing petitions, picketing, strike action, etc?

2019

100

ME and Africa

Asia

Australia

Europe/UK

Total

No restrictions

Moderate restrictions

High restrictions

2021

100

Asia

Australia

EMEA

North America

Total

No restrictions

Moderate restrictions

High restrictions

100

FIVE STEPS TO SUCCESS

Your guide to tackling the Future of Work

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

The new trust equation

Changing work practices

Changing working practices

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With remote working becoming the norm in some sectors (full-time or part-time), wellbeing is rapidly becoming a major employment issue. The pandemic triggered a rethink of wellbeing policies and processes for many employers. 36% of survey respondents say that they are substantially rethinking their strategic approach to wellbeing of the workforce, rising to 43% in EMEA, and 82% say they plan to use digital tools to monitor workers’ wellbeing in the near future.

Our survey shows that 97% of employers have processes in place to detect and address wellbeing issues at work at an early stage. 43% say that these processes are assisted by technology. An example of this would be sentiment analysis software, which detects the tone and emotion behind digital communication (figure 6). Questions remain on the accuracy and reliability of wellbeing data, and on the implications of decisions made based on the data – could it be interpreted as bias against socio-cultural differences with adverse consequences for less resilient employees, for example? “It’s understandable that employers want to use tools to monitor wellbeing during a global pandemic, but it could be argued that some employers have failed to address the central issue,” says Natalie Gaspar, Partner, Employment Australia, Herbert Smith Freehills. “Has the response to increased uncertainty during the pandemic, and ongoing, changed organisations operating models away from just-in-time delivery of goods and services to maintaining adequate levels of capacity to deal with the peaks and troughs? The workload and deadline pressure might not be sustainable – and the blurring of work and private life during the pandemic is an added pressure. Monitoring might just add to employees’ anxiety.”

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FUTURE OF WORK REPORT 2021

The pandemic and remote working have pushed mental health and wellbeing into the mainstream. Employers will struggle to keep up.

WELLBEING

The general workforce across the gig economy increased during the pandemic and, for some, especially those who had lost work in other industries, platform work became a primary source of income.” Senior Legal Counsel at an online platform company

FIGURE ONE

The focus on wellbeing raises particular challenges for the gig economy. While there are concerns over rights in some countries such as the UK, the US and Australia, gig economy work was also an important source of income with job losses across many industries, and in many countries during the pandemic. For example, food delivery companies in China came under criticism in 2021 following a television documentary that highlighted low pay, long hours and dangerous working conditions. China’s seven million food service delivery workers are classified as self-employed and as a result do not qualify for a minimum wage, health insurance or holiday or sick pay. Strikes by these gig workers were a regular occurrence before the pandemic – there were at least 45 strikes recorded in 2019 – but public support during the pandemic may tip the balance in the legal fight around their worker status. A senior legal counsel at an online platform company, points out that as a result of the pandemic, gig work has become an important source of income for more people: “The general workforce across the gig economy increased during the pandemic and, for some, especially those who had lost work in other industries, platform work became a primary source of income.”

Wellbeing in the gig economy

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How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

On the 5 July 2020, accusations were made by The Sunday Times against fashion giant Boohoo about unacceptable working conditions and underpayment of workers at the factory in Leicester. On 24 September 2020 an independent review by Alison Levitt QC was released. The report found that these allegations weren’t only well founded but substantially true stating that Boohoo’s monitoring of the factories was “inadequate” because of “weak corporate governance”. The report also went on to say that the failure to assess the risk to workers during the coronavirus pandemic was “inexcusable”. In response, Boohoo accepted the recommendations put forward in the review in full and apologised for failing to the standards they themselves set. CEO John Lyttle is quoted in The Guardian as saying that the company would become "a leader for positive change in the city", adding that it was clear that they needed to go further and move faster to improve governance, oversight and compliance. It also pledged a series of reforms including a move towards publishing a list of companies in its supply chain, reducing the number of factories it relies on for produce, and making a conscious effort to start using more ethical suppliers.

Working conditions under the spotlight

36%

of survey respondents say that they are substantially rethinking their strategic approach to wellbeing of the workforce, rising to 43% in EMEA

82%

plan to use digital tools to monitor workers’ wellbeing in the near future

43%

say that these processes are assisted by technology such as sentiment analysis software, which detects the tone and emotion behind digital communication

97%

of employers have processes in place to detect and address wellbeing issues at work at an early stage

Uber has introduced safety net features for its contractors, such as injury insurance which includes income protection should something go wrong, training opportunities and education, a voluntary move as the legal issue of the status of its drivers is discussed in courts around the world. The gig economy is becoming an increasingly important part of the future of work and as a contractor, you get flexibility but little in the way of benefits. Mike Gonski, Partner, Employment Australia, Herbert Smith Freehills comments, "The thing I love about being a lawyer is that legislation will likely always trail behind innovation. While it would be great for business for there to be easy laws to follow and clear guidance on issues, the fact is, it will never happen this way. Accordingly, it is good that innovative businesses are looking at ways to do the right thing by workers under the current laws that are in place and shouldn’t be penalised if what they are trying to do is better off overall for a worker. The worst thing that could happen would be for businesses to reduce innovation because they are too scared to slip up under laws that are outdated."

It is good that innovative businesses are looking at ways to do the right thing by workers under the current laws that are in place.” Mike Gonski, Partner, Employment Australia, Herbert Smith Freehills

Scenario 1

The new trust equation

Figure 7: How do you respond to this scenario?

Conduct an employee survey to assess the extent of the problem

Figure 6: Do you have established processes in place to detect and address wellbeing issues at an early stage?

EMEA

North America

Total

Asia

Australia

Figure 2: To what extent do you restrict or control employee/worker actions, including public comments, attending marches, signing petitions, picketing, strike action, etc?

2019

100

ME and Africa

Asia

Australia

Europe/UK

Total

No restrictions

Moderate restrictions

High restrictions

2021

100

Asia

Australia

EMEA

North America

Total

No restrictions

Moderate restrictions

High restrictions

Processes to detect wellbeing issues

Review the remote working policy

Ask employees to refrain from public discussion until the issues are addressed

Invite a widespread debate through internal employee forums

Announce a review of wellbeing policy

Actively engage in a social media conversation to emphasise the organisation's wellbeing policies

Ignore social media

Responding to the scenario

FIVE STEPS TO SUCCESS

Your guide to tackling the Future of Work

As part of our survey we posed hypothetical scenarios to garner further insights.

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

The new trust equation

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The pandemic triggered a widespread and enduring shift towards a hybrid working model in many sectors and countries. What is already clear is that employment law is having to catch up. One of the unintended consequences of remote working during the pandemic is that it has increasingly seen by employees as a right, as opposed to a right to request – but that is just the tip of the iceberg. What are the implications, for example, for workers covered by ‘awards’ (industrial instruments which set work rules and minimum pay) in Australia? Australian employers are required to keep a record of the time that award-covered staff start and finish work, even if they are salaried or hold professional roles. The Working Time Directive and implementing legislation in the EU and the UK makes parallel requirements.

INTRODUCTION TO THE REPORT

“Employers will need to give serious consideration to the design of remuneration packages and performance assessment tools to provide some counterbalance,” says Christine Young, Partner, Employment UK, Herbert Smith Freehills. “Arguably, after this enforced period of isolation, workers will feel the benefit of building relationships in person. This creates opportunity for employers to re-evaluate what benefits there are to working in the office, re-design work to provide these as part of a hybrid model, then pass those benefits to employees.” There are upsides to hybrid working. 86% of survey respondents said that remote working has benefited their talent strategy, in terms of attracting top talent and encouraging greater diversity of applicants who are not restricted by geographical location. But this, too, has implications. If employers source remote workers from further afield, labour market wage relativities come into play – and the risk of pay-related activism increases. Redundancy policies will also have to be rethought. It is clear from the survey that these questions are already preoccupying employers. 75% say that within three to five years, they expect their remote workforce to be located in many more jurisdictions than before – and nine out of 10 recognise that remote workers could face disadvantages as well as benefits (figure 8). Tess Lumsdaine, Counsel, Employment Hong Kong, Herbert Smith Freehills notes that the outlier in Asia concerning differential pay between remote and office-based workers might derive from a number of organisations offshoring those business functions that have shown to have effectively worked "remotely", benefitting from their proximity to jurisdictions and regions where wages are significantly lower. "We have, for example, seen some further movement of back office functions transferred out of Hong Kong and Singapore to the Philippines and Malaysia and out of Shanghai to other localities such as Guangdong. All of these 'remote' locations have lower wages but higher employee protections."

Hybrid working could split the workforce into tiers of predominantly home and office workers, which has unexplored implications for pay. Employees working from home save time and money on travel and subsistence costs – so is it right that they are paid the same as equivalent employees who are required to work in an office? The counter argument is that rewarding employees for coming into the office will penalise groups that choose not to, which are more likely to include working mothers, disabled employees and the medically vulnerable – resulting in an increase in the gender pay gap and greater risk of disability and age discrimination claims. And what of workers who demand to be reimbursed for their costs associated with working from home? The Australian Council of Trade Unions’ Working From Home Charter calls for employers to provide an adequate allowance or full cost reimbursement for all work-related expenses.

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FUTURE OF WORK REPORT 2021

Widespread remote working risks pitting two tiers of workers against each other. Will the law ever catch up?

Rights in a hybrid working model

Space for one graph, illustration or logo.

Employers will need to give serious consideration to the design of remuneration packages and performance assessment tools.” Christine Young, Partner, Employment UK, Herbert Smith Freehills

We have seen some further movement of back office functions transferred out of Hong Kong and Singapore to the Philippines and Malaysia and out of Shanghai to other localities such as Guangdong. All of these 'remote' locations have lower wages but higher employee protections.” Tess Lumsdaine, Counsel, Employment Hong Kong, Herbert Smith Freehills

FIGURE ONE

One of the most challenging aspects of managing an internationally mobile remote workforce lies in the conflict between working practices and employment, tax and social security law. In the US, for example, if a single employee works remotely in a state where the employer has no physical presence, the company may become liable for certain employment laws applicable in that state. In Europe, an employee who works for a Belgian-based company and works from their home in France gains certain French employment rights. And worldwide, companies risk falling foul of Permanent Establishment tax rules if their staff work remotely from jurisdictions where their employer is not based. The legal implications if an employee’s home office is in a different location to their employer’s office are extremely complex and encompass pensions and social security liabilities, employment rights, tax legislation, worker safety, immigration and data protection legislation. They also open the Pandora's box of dual-employment risks or co-employment.

The taxing question of remote working

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How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

86%

of survey respondents said that remote working has benefited their talent strategy, in terms of attracting top talent and encouraging greater diversity of applicants who are not restricted by geographical location

September 2021 saw many businesses launch their formal return to the office/hybrid working arrangements with employers keen to ensure their employees achieve balance in their working lives and re-establish the collaborative relationships with colleagues which makes the office workplace a hub for training, creativity and innovation. Beyond this continues to see the increase of flex in the occupier/office market. Driven by occupiers but shaped as well by those seeking a competitive edge, the market continues to develop at a pace. "A key development is the increase in contractual structures available to occupiers to take on space. The range of products is dizzying with work/live, co-working, membership, serviced offices, short term leases and traditional Full Repair and Insurance leases. Those options are complimented by more imaginative leasing structures which build in flex to office portfolios – call options, rights of first refusal, rights of first offer and expansion and contraction options pre-delivery," comments Jeremy Walden, Managing Partner, Real Estate Practice UK and EMEA, Herbert Smith Freehills. All of these are becoming increasingly common in the leasing market and all are a response to customer demand. "The significant disruption created by the pandemic, including work from home mandates, has highlighted how some of these developments are not without risk and we have seen some new and not so new providers of flexible space struggle with the stability of their model." Property owners and lenders will need to be thoughtful and agile in their short to medium term strategies.

It emerges that an employee who works exclusively remotely is not living at their primary address, as assumed, but has been working for several months at their second home, in a different country. 99% of respondents said their company could see a similar challenge arise in the next three to five years and on average, 11% of the workforce could potentially be affected. The stakes are high: for 72% of employers (rising to 84% in Australia and 88% in the UK), this scenario would trigger permanent establishment issues – so it is hardly surprising that almost four out of five employers are already using monitoring software to establish the location of their workers, and the remainder either require self-reporting, or are considering introducing monitoring technology (figure 9). It will be important to have clear policies on where staff can work in addition to location of work clauses in employment contracts. 61% said that this scenario would breach existing contractual requirements about where their employees work.

Scenario 2

75%

say that within three to five years, they expect their remote workforce to be located in many more jurisdictions than before – and nine out of 10 recognise that remote workers could face disadvantages as well as benefits

99%

of respondents said their company could see a challenge with workers operating outside primary country residence

In the US, if a single employee works remotely in a state where the employer has no physical presence, the company may become liable for certain employment laws applicable in that state.

The new trust equation

Figure 8: To what extent do you agree or disagree with the following statements (those responding ‘strongly agree’ and ‘agree’):

Intentions for the next three to five years

We expect that our remote workforce will be located in significantly more countries, including those where we have no physical presence

We plan to dfferentiate pay between remote and office-based workers

We plan to mitigate the risk of disadvantages suffered by those who work remotely

Figure 9: Do you monitor the location of employees when they work remotely?

Yes - we require them to self-report

Yes - we use monitoring software

No - we are not considering monitoring this in the future

No - but we would consider using technology to monitor in future

Figure 2: To what extent do you restrict or control employee/worker actions, including public comments, attending marches, signing petitions, picketing, strike action, etc?

2019

100

ME and Africa

Asia

Australia

Europe/UK

Total

No restrictions

Moderate restrictions

High restrictions

2021

100

Asia

Australia

EMEA

North America

Total

No restrictions

Moderate restrictions

High restrictions

100

FIVE STEPS TO SUCCESS

Your guide to tackling the Future of Work

As part of our survey we posed hypothetical scenarios to garner further insights.

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

The new trust equation

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FUTURE OF WORK REPORT 2021

Pandemic upheaval has obscured workplace trends, even as it drives long-term shifts

Five steps to success

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How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Don’t forget underlying trends

The pandemic acted as a distraction from powerful existing workplace trends and clouded our view of the future. In 2019, 57% of respondents named automation and AI as the most significant trigger for activism. This has fallen to 41% in 2021 but that does not mean that automation is any less of a risk in terms of activism.

Be clear on corporate advocacy

Employers’ role in society – the pressure to do (and say) the ‘right’ thing – is more intense than ever. Employers are being increasingly drawn into political and social discussions, willingly or otherwise. It’s vital to have a consistent message across all channels, underpinned by transparent internal debate.

Look ahead

The rapid evolution of the world of work, accelerated by the pandemic, means that identifying future risks is more challenging than ever. Social and environmental issues are a solid bet. Hybrid working could change the nature of many jobs and potentially reduce the need for some layers of management. It could also have far-reaching implications for pay – particularly around the pay of remote and office-based workers. Look ahead and plan for a different future.

Prepare for difficult conversations

The rapidly changing workplace is raising challenging workplace issues. Transparency is the key to heading off disputes – but internal workplace forums alone are unlikely to be enough to deal with the complexities of controversial issues such as industrial relations strategy, monitoring and social media policy.

Re-evaluate the role of HR

The trend towards hybrid working and measuring output over hours means a shift towards a more trust-based relationship between employer and worker. This will have implications for the role of HR and the skills required within the function.

The pandemic has not fundamentally changed the world of work, but it has added to its complexity and created numerous new challenges for employers. How employers navigate these challenges in the age of ethical and moral leadership ahead will be critical. The potential for activism remains a constant threat, but also a valuable opportunity for employers to learn what is important to their workforce. Different organisations, sectors and jurisdictions will have their own challenges but there are five important points to remember:

INTRODUCTION TO THE REPORT

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INTRODUCTION TO THE REPORT

The new trust equation

Executive summary

How the world has changed

ESG and stakeholder capitalism

Employee surveillance and monitoring

Wellbeing

Rights in a hybrid working model

Five steps to success

Your guide to tackling the Future of Work

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Based on over 375 interviews with senior leaders across the world, our report analyses the key trends shaping the future of the workplace. Use this tool to dive deeper into the data and discover how employers in your region answered a selection of our survey questions.

AUSTRALIA

In which of the following areas do you see the biggest potential risks for corporate reputational impact in the next five years?

To what extent do you restrict or control employee/ worker actions, including public comments, attending marches, signing petitions, picketing, strikes...?

What do you perceive to be the key triggers for increased employee/worker activism over the next five years?

To what extent do you agree or disagree with the following statements:

Do you monitor the location of employees when they work remotely?

Have you established a formal forum or mechanism for employee/worker activism consultation, such as workers on Boards/Works Councils, etc?

Do you have established processes in place to detect and address wellbeing issues at an early stage?

View questions

In which of the following areas do you see the biggest potential risks for corporate reputational impact in the next five years?

Sustainability/environmental

Cyber threats and data loss

Regulatory interventions

Global economic slowdown/recession

Geo-political events

Ethical business conduct

Corporate social responsibility

Workforce issues or employee actions resulting from a high-profile individual and/ or collective worker groups

10%

15%

20%

25%

30%

35%

40%

45%

50%

41%

32%

43%

28%

35%

27%

36%

24%

Ethical business conduct

Corporate social responsibility

Workforce issues or employee actions resulting from a high-profile individual and/ or collective worker groups

Regulatory interventions

Global economic slowdown/recession

Geo-political events

No restrictions

Moderate restrictions

High restrictions

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

43%

28%

35%

27%

36%

24%

To what extent do you restrict or control employee/ worker actions, including public comments, attending marches, signing petitions, picketing, strike action, etc?

Within the next three to five years, we expect that our remote workforce will be located in significantly more countries, including jurisdictions where we have no physical presence

We feel that the employment/labour law regulatory frameworks are keeping up with the changed environment for employers

We have redefined our core working hours to reflect/accommodate remote working

Within the next three to five years, we plan to use digital tools to monitor workers' wellbeing

Within the next three to five years, we plan to measure productivity/output rather than monitor hours/inputs worked

Within the next three to five years, we plan to empower workers, including worker representatives, to selfdetermine their working environment/hours/holiday days

We feel that remote working has benefited our talent strategy in terms of encouraging greater diversity in applicants

Within the next three to five years, we plan to mitigate the risk of disadvantages to those suffered by working entirely or predominantly remotely

We feel that the company's position on ethics and moral leadership is fit for the future workforce

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

92%

88%

89%

80%

77%

87%

80%

76%

To what extent do you agree or disagree with the following statements:

Discrimination allegations (age, gender, race, religion, LGBTQ, disability)

Exploiting contract workers/prevalence of unstable work contracts (e.g., zero hours) - the terms of employment

Widespread disagreement with corporate decisions/strategy

Lack of social and environmental issues being addressed/corporate social responsibility

Lack of demographic representation in the workforce

Increased monitoring and surveillance of workers and transparency e.g., self-certify their working hours/ use time and/or activity tracking software

Pay and benefit inequalities

Widely available channels for activism, predominantly social media (i.e., easier to complain)

Automation/AI in the workplace replacing workforce (creating redundancy)

10%

15%

20%

25%

30%

35%

40%

45%

50%

28%

41%

36%

40%

27%

36%

27%

24%

What do you perceive to be the key triggers for increased employee/worker activism over the next five years?

55%

60%

68%

43%

We have already empowered workers, including worker representatives, to self-determine their working environment/hours/holiday days

Within the next three to five years, we plan to differentiate between pay for office-based and remote workers

Vaccination certificates/health screening requirements

I don't expect an increase in employee/ worker activism over the next five years

33%

15%

No plans to establish

Plan to establish

Already established

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

28%

72%

Have you established a formal forum or mechanism for employee/worker activism consultation, such as workers on Boards/Works Councils, etc?

70%

80%

Employees

No plans to establish

Plan to establish

Already established

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

70%

80%

31%

69%

Non-employee workers

No - we are not considering monitoring this in the future

No - but we would consider using technology to monitor in future

Yes - we require them to self-report

Yes - we use monitoring software

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

91%

Do you monitor the location of employees when they work remotely?

Yes - assisted by technology e.g., sentiment analysis software

Yes - manual process e.g., staff forum discussion group

10%

20%

30%

40%

50%

60%

70%

80%

32%

68%

Employees

Do you have established processes in place to detect and address wellbeing issues at an early stage?

Yes - assisted by technology e.g., sentiment analysis software

Yes - manual process e.g., staff forum discussion group

10%

20%

30%

40%

50%

60%

70%

80%

59%

39%

Employees

Do you have established processes in place to detect and address wellbeing issues at an early stage?

No - we are not considering monitoring this in the future

No - but we would consider using technology to monitor in future

Yes - we require them to self-report

Yes - we use monitoring software

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

76%

12%

11%

Do you monitor the location of employees when they work remotely?

No plans to establish

Plan to establish

Already established

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

70%

80%

55%

45%

Non-employee workers

No plans to establish

Plan to establish

Already established

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

70%

80%

40%

60%

Employees

Have you established a formal forum or mechanism for employee/worker activism consultation, such as workers on Boards/Works Councils, etc?

Vaccination certificates/health screening requirements

I don't expect an increase in employee/ worker activism over the next five years

Discrimination allegations (age, gender, race, religion, LGBTQ, disability)

Exploiting contract workers/prevalence of unstable work contracts (e.g., zero hours) - the terms of employment

Widespread disagreement with corporate decisions/strategy

Lack of social and environmental issues being addressed/corporate social responsibility

Lack of demographic representation in the workforce

Increased monitoring and surveillance of workers and transparency e.g., self-certify their working hours/ use time and/or activity tracking software

Pay and benefit inequalities

Widely available channels for activism, predominantly social media (i.e., easier to complain)

Automation/AI in the workplace replacing workforce (creating redundancy)

10%

15%

20%

25%

30%

35%

40%

45%

50%

41%

25%

40%

33%

29%

27%

24%

29%

49%