HPE Accelerates its Sustainability Goals While Improving the Impact of IT on the Environment and Society

Transcript of a discussion on how Hewlett Packard Enterprise has newly accelerated its many programs and initiatives to reduce its carbon emissions, conserve energy, and reduce waste. 

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on the impact of information technology (IT) on the environment and society.

Gardner

As businesses worldwide seek to maximize their value to their customers and communities, the total value equation has expanded to now include the impact on sustainability for the environment.

The ways that companies, along with their partners, suppliers, and employees best manage and govern their resources and assets speaks volumes about their place among peers. And it allows them to take a leadership position as stewards and protectors of the future. The sooner the world’s industries develop a commitment to reach a net-zero carbon emissions posture, for example, the better for everyone in gaining environmental sustainability.

Stay with us now as we examine how Hewlett Packard Enterprise (HPE) has newly accelerated its many programs and initiatives to reduce its carbon emissions, conserve energy, and reduce waste -- including far earlier net-zero dates and more impactful emission-reduction milestones. We’ll now learn how HPE’s newest living progress report provides a blueprint for other organizations in and outside of the HPE orbit to also hasten and improve their sustainability efforts.

Here to share the latest on HPE’s plans and goals for broad and lasting sustainability is John Frey, Chief Technologist, Sustainable Transformation at HPE. Welcome to BriefingsDirect, John.

John Frey: Thank you. It’s great to be here.

Gardner: How does HPE define ESG and how long has it been working toward improving its impacts across these goals?

Frey: To make sure everyone knows what we mean when we say ESG, that’s actually an acronym for environmental, social, and corporate governance. This is language that was first used by investors in the financial community, and now it’s used much more broadly to emphasize that when we discuss sustainability. We mean more than just the environmental aspects. We mean the social aspects as well.

Frey

From HPE’s perspective, we’ve named our ESG programs Living Progress, and that’s really our business strategy for creating sustainable and equitable technology solutions for a data-first world. These efforts are tied to our corporate strategy and our purpose, which is to advance the way people live and work.

Our programs go back many, many years. In fact, back in 1957 when our program started, the program was called Corporate Citizenship and it was based around how HPE would grow beyond the borders of the United States. We have a long history of leadership as Hewlett Packard. When Hewlett Packard and Hewlett Packard Enterprise became two separate companies, we adapted the best practices at that point in time and then built our LivingProgress programs around that.

Our programs today have three main elements -- driving a low carbon economy, investing in people, and operating with integrity. We have goals across that entire spectrum of sustainability and throughout the lifecycle of our products.

Gardner: It’s very impressive that you have been doing this for going on 65 years. How has the world changed more recently that has prompted you to accelerate, to even dig in deeper on your commitments here? 

Frey: Climate change is one of the greatest threats to our common future. We recognize that we have limited resources and lots of impacts that are complex societal and environmental challenges. At HPE, we believe that addressing climate change is not only a moral imperative; it is also a business opportunity as we innovate technology to help our customers thrive in this carbon-constrained world.

Years ago, we set our goal to be net-zero by 2050, and it was backed up by science-based targets throughout our entire value chain. When we set this goal, it was clear leadership. However, the Intergovernmental Panel on Climate Change (IPCC)’s most recent reports indicate that going to net-zero by 2050 is not fast enough. We have to accelerate our goals.

HPE has committed to becoming a net-zero enterprise across our entire value chain by 2040. Our commitment is backed by our roadmap to net-zero, which consists of a science-based targets.

Therefore, HPE has committed to becoming a net-zero enterprise across our entire value chain by 2040. Our commitment is backed by our roadmap to net-zero, which consists of a new suite of science-based targets that are consistent with that one-and-a-half-degree pathway and approved by the Science Based Target Initiative.

We set those interim targets and longer-term targets. Our interim targets for 2030 include reducing our scope-one and scope-two emissions by 70 percent and reducing our absolute scope-three emissions by 42 percent, both off of a 2020 baseline. And that scope-three target includes the use of our products by our customers, upstream transportation and distribution, and scopes one and two supplier emissions. Our longer-term target for 2040 is to reduce the absolute scopes one, two and three emissions by 90 percent off of that 2020 baseline as well.

Getting to these targets will require a fundamental transformation in everything we do. Our leaders need to be accountable for driving this and we’ve tied key climate metrics to executive compensation. We will need to ‘walk the talk’ and procure 100 percent renewable energy for our own operations while at the same time helping our customers and suppliers bring new renewables to the grid where they operate.

And most importantly, we’ll enable our customers to meet their own net-zero ambitions. This is important, because about two-thirds of our climate impact on the globe occurs when our customers use our technology solutions. So HPE is putting our innovation engine into action to develop more sustainable IT solutions while working closely with our customers to help optimize their IT infrastructure so that they can meet their own net-zero goals.

Gardner: That’s very interesting when you say nearly two-thirds of the climate impacts happen in your customer base from the use of your solutions. Can you expand on that? What does that mean?

Sustainability demands change

Frey: When we think about our footprint across the company, a small single-digit percentage is because of our own operations, our buildings and our employees and employee travel and those sorts of things. Around a third of it then is our supply chain – when we bring products to the market and when we take those products back from customers at their end of life. But the bulk, nearly two-thirds of our climate impact on the globe is when our customers use our technology products.

Learn More About

HPE's Living Progress Initiatives.

For us to help our customers get to net-zero and for HPE to lower our own carbon emissions across our entire portfolio means that we really must help our customers use their technology more efficiently. So that really gets to things such as helping them right-size the amount of technology they have, increasing the performance they get from the technology for each watt. We have to help them continue to optimize in real time their technology so that it uses the lowest amount of energy and does the most work at the same time.

Gardner: It’s no exaggeration to say that it’s technology that’s going to come to our aid, but it’s technology that we need to, in a sense, solve.

Frey: Absolutely. In fact, we think of technology as a force multiplier for solving climate challenges. Technology really enables a lot of these solutions, and it also facilitates a lot of clean energy innovation as well.

Gardner: What are some of the major hurdles that need to be overcome to achieve this? It’s quite a bit to bite off and chew.

Frey: Yes, absolutely. Experts estimate that about half of the carbon reductions that the world needs to achieve net-zero emissions in the coming decade will come from technologies that don’t even exist yet. So that’s challenging. And in fact, if we look at just the companies that have made net-zero commitments already, we don’t have enough capability in terms of renewable energy and carbon offsets and things to even cover those commitments.

Technology can be an enabler here. HPE is spending a tremendous amount of effort innovating with solutions such as HPC technologies that are used by climate scientists and clean energy researchers.

So that is a huge challenge, but technology can be such an enabler there. HPE is spending a tremendous amount of effort innovating with solutions such as our high performance computing technologies that are used by climate scientists and by clean-energy researchers who are trying to find better ways to bring those solutions to market. With our customers, who are using our professional services and our technology services, instead of buying assets, we help them right-size the technology they need, we help them manage their technology from the edge to the cloud and optimize all the way through that.

Lots of opportunity. I prefer to think in terms of the positive, rather than the hurdles, which I think of as business opportunities. But what I can say from my experience working with our customers around the globe is many of our customers are really fixated on trying to help solve these challenges, many of our customers see great business opportunities in trying to help fix these challenges, and they’re all turning to technology as the enabler of that innovation.

Gardner: Yes. I’ve heard it said elsewhere. You can do quite well as a business by doing good for sustainability in the economy.

Frey: Absolutely. We fully agree with that.

Gardner: It seems like HPE has taken quite a lead here, but it involves more than just you the company. It affects your supply chains, as you’ve mentioned, your customers, your partners. So how do you characterize HPE’s role in that larger community?  Are you an example to follow, maybe a facilitator, an educator accelerating growth of potential, or all of the above?

Our example: Fail fast, then innovate again

Frey: We really play all of those roles. In some cases, we are an example that others point to and say, “Hey, we’re not going down this path alone. HPE has gone down this path.” In many cases, we’re an educator and will share with customers this long sustainability journey that we’ve been on, the lessons we learned. Often, it’s better to learn from what someone who has been down the path said they would never do again, or what they learned from their journey. We so often focus as a sustainability community on the things that went well. Yet, there’s a lot of lessons learned, and we really try from an HPE perspective to take a ‘fail fast and then innovate again’ approach. We’re constantly learning, and that education has great value.

In many cases, there’s a need for a facilitator. We know that these challenges exist across many industries, but there isn’t a central body pulling together multiple stakeholders and multiple customers to help solve that challenge. A couple of examples of that are organizations such as the Responsible Business Alliance (RBA).That’s an organization that HPE helped found years ago. We realized when we were auditing factories in our supply chain that these factories were building products for other technology companies as well. So, the factories were following our expectations in the lines building HPE products but may not have been protecting workers adequately in some of the other lines. When we took a step back and said, “Well, why is that?” We were told, well, that other vendor doesn’t make us do these things, and we said, “Well, wait a minute. That’s actually not the right answer.”

If we’re really trying to make sure that workers in our supply chain are being treated fairly, paid a living wage, have their health and safety protected, and are protecting the environment that’s a non-competitive issue. So, we took a step back and formed what was then called the Electronic Industry Citizenship Coalition (EICC) and invited companies in our industry to come together to have a common set of expectations for our suppliers and then put in place assurance programs. Well, that was so successful, other industries came to us and said, “Could we adopt that same practice for our industry?”  Today, the organization that does all of that is called the Responsible Business Alliance. And so, it’s having a huge impact on supply chains around the world, but all started because there was that need for a facilitator to bring companies together.

Another great example of that is the Clean Energy Buyers Alliance (CEBA). As more and more companies started making renewable energy commitments, we realized that to get the scale we needed in the pricing for renewable energy, we could do so much together as an alliance, have common procurement expectations and get better pricing.

Learn More About

HPE's Living Progress Initiatives.

One of the ways I talk about it is catalytic collaboration. How do we bring voices to the table that may not have been heard before?  How do we think from an innovation and an accelerator perspective much broader than just for example, publicly traded companies coming together?  How do we bring in the voice of stakeholders and customers and governments?  So, in all of these ways, HPE plays a variety of roles trying to accelerate the world’s progress to solve these big challenges.

Gardner: John, it seems no matter where you live, you’re getting a steady stream of reminders about why this is important. It could be wildfires, hurricanes, permafrost melting, rising sea levels. But on the other hand, this has been a challenge for many of the rates of increase to be met or reduced. So, what are the risks for businesses if they don’t make sustainability a priority?

Ignore environmental impacts at your own risk

Frey: Well, there’s a variety of risks, but let’s start with the business risk. The missed market opportunities. Businesses cost more and they can lose customers. One of the things we know about sustainability is that in many cases it’s about preventing waste, and waste has a cost associated with it. At the same time, we find customers increasingly saying that they want to do business with companies who have strong reputations, who have strong social and environmental programs, and companies that have a purpose and assist in making the world a better place.

In all those ways from a business perspective, customers are watching what companies do, and they’re making purchase decisions based on the attributes of the companies that they want to do business with. Frankly, if you’re not being a sustainability leader or at least keeping up with your industry, you’re going to start missing many of those market opportunities.

Customers are watching what companies do, and they're making purchase decisions based on the attributes of the companies that they want to do business with. If you're not a sustainability leader, you're going to miss market opportunities.

Another one could be, and we hear this from many of our customers, in this increasingly difficult time that we live in, finding employees is very challenging. Employees want to work for a company where they can see how what they’re doing contributes to the company’s purpose. And so that’s another opportunity that they miss.

I’ll just give you a sense. We had International Data Corporation (IDC) do a survey for us last year. We asked technology executives across several countries why they were investing in and participating in sustainable IT and sustainability programs in their technology operations, and what they told us was really interesting. The digital leaders, those companies that are the innovators and the fast movers said that they were investing in sustainability programs to attract and retain institutional investors.

Now, the companies in the middle, the digital mainstream said they were doing it to attract and retain customers and the digital followers. Those companies that move a little slower are not quite as far in their own digital transformation said they were doing it to attract and retain employees. So, there’s a variety of business reasons to do this. Increasingly, there are regulatory reasons as governmental agencies start asking companies to talk about things that are either material from a financial perspective, such as we’re seeing here in the U.S. with the proposed Securities and Exchange Commission (SEC) regulations or other places around the world where there are regulatory reporting reasons to make sure that you have strong sustainability programs because you have to disclose data to a regulatory agency.

Gardner: Do you have any examples or use cases for how sustainability leadership moves beyond reputation to be a driver of business growth, which, as you said is one of the chief reasons to embrace sustainability fully?

Frey: There are a variety of opportunities. We’ve seen it ourselves. For example, in the last year, we’ve had over 1,400 customer inquiries asking HPE about our own sustainability and social and environmental programs whether it relates to our products or whether it relates to our business. That’s just one example of the way customers are paying attention and they’re asking increasingly in-depth questions. It used to be questions such as, “Do you have your own sustainability program, yes or no?” Then it moved into “Are you using some of the various standards that show us that you’re managing this as a process and as a system across your business?” Now, they’re asking us questions all the way down to “Tell us the carbon footprint of this product or solution that HPE is bringing to the market.”

Now, what we know is when we have good answers to that and we share expertise with customers, we tend to do much better from a business perspective as well, and customers want to do business with us. We certainly see on our own that there are lots of opportunities for additional value by having the strong programs.

Gardner: All right. Are there any even more specific examples of how HPE has helped customers to improve their businesses while also accelerating sustainability improvements? Do we have some concrete examples of how this works in practice?

Win-win: Great business and ESG results

Frey: Yes, I’ll give you just a few. Wibmo is India’s leading digital payment provider, and they use a variety of HPE technologies, but they wanted to consider moving to a much more flexible technology we call HPE Synergy, which is a composable infrastructure. What that really means is that you have compute, storage, and networking in a common chassis that shares power supplies and gives you great scalability. It gives you a pool of resources that the customer can tap from, and what Wibmo really wanted to do was move from a blade infrastructure to that Synergy infrastructure to increase their capability to respond very quickly to changing customer requirements. As we did that for them, to give them the same capability, reduced their IT capital expenditures by 80 percent, reduced their creation and delivery of new accounts from weeks to hours and it lowered their carbon footprint by 50 percent. So, we observed great business outcomes and great environmental outcomes coming from the work with that provider.

Now, another one was Nokia Software, and they’re an HPE GreenLake customer, which is our as-a-service offering. Nokia has always been progressive around their environmental objectives, and they wanted to strive for a carbon-negative data-center operation, and one of the things they wanted to do to achieve that was using a renewable energy source. They wanted to take water from a nearby Finnish lake to cool the data center. They wanted to move to liquid cooling and using renewable energy sources to power that data center. HPE was able to help them do that. One of the great things about HPE GreenLake is that because it’s consumption-based, we help customers tailor the infrastructure to their needs without additional equipment that is sitting there and not doing any work. We enable them to reduce their capital expenses and reduce their environmental footprint at the same time.

Gardner: Let’s talk next about one or two examples of how technology accelerates environmental change, not just from the IT perspective, but perhaps other views that are more data driven and offer the capability to exercise more efficiency, and more ways when you’ve got a data driven organization from edge to Cloud.

Learn More About

HPE's Living Progress Initiatives.

Frey: I’ll give you two quick examples. Purdue University is one, and we’re really partnering with Purdue on sustainable agriculture. One of the challenges we have as a global population is that we’re swelling to about nine-billion people by 2050. And, so, the world is going to have to double our agricultural output or have starvation challenges around the world. Purdue’s College of Agriculture partnered with us to do a variety of research around sustainable agriculture, increasing agricultural output in using edge technologies to allow farmers to really be able to tailor things such as irrigation and fertilization only to the places in their fields that they are absolutely needed. The ultimate goal of this, of course, is to drive more effective ways to grow nutritious, healthy, and abundant food for this growing planet. So that’s one great example and that research continues.

Another great example is Carnegie Clean Energy, and they’re an Australian wave, solar, and battery energy company. But they’re really focused on making wave power a reality. They’ve developed a wave energy technology called CETO that uses the wave energy off Western Australia’s Garden Island to power the country’s largest naval base.

Now, you may not realize that one of the big advantages of wave power is predictability. The sun stops shining at times, the wind stops blowing, but the ocean’s waves don’t stop flowing in. Wave forecasts can look out about a week in the future to figure out how the wave energy is going to be, and they only have about a 20 percent margin of error, which allows CETO to predict how much power is going to be generated looking into the future. It even allows them to tailor the effectiveness of CETO, based on how big or small they predict those waves are going to be. They can generate precise knowledge about the shape and the timing of upcoming waves so that they can make sure they get the maximum amount of energy from each wave that comes in.

Those are two examples of the way we’re using technology for social and environmental good.

Gardner: John, you mentioned, of course, about the long period that HPE has been involved with looking for sustainability and improvement and the impact on its communities, and you’ve just said, “Okay, we were on track, but we’re going to accelerate that. We’re going to move it forward.” How can other companies who might want to decide to accelerate what they’re doing get started? What’s a good way to think about a methodological or comprehensive way to get faster, better, and more impactful when it comes to sustainability?

Partner up for possibility

Frey: The first way we suggest is do a materiality assessment, and that’s talking to your customers, your stakeholders, and your employees about the things that are most relevant to your business and the things that you have the greatest ability to impact. So, figure out what’s most material and publish plans to solve those challenges. In fact, HPE gives an example every year in our Living Progress Report. We publish our own materiality assessment and then show how the initiatives we’re taking are driven straight from that materiality assessment.

Another thing that we would recommend is to learn from leaders. Don’t reinvent the wheel. Companies like HPE freely share this knowledge with our customers, stakeholders, and others in the broader community because we feel that not everybody needs to go back and develop their programs from scratch. Learn from those that have been doing it, learn those lessons and then use that to accelerate your progress.

Learn from the leaders, Don't reinvent the wheel. Companies like HPE freely share their knowledge with our customers, stakeholders, and others in the broader community because we feel that not everybody needs to go back and develop their own programs from scratch.

And finally, partner for success. You don’t have to go it alone. Leverage the expertise throughout your value chain. In HPE’s case, for example, we share our sustainable IT strategy, our white papers and our workbook that helps customers implement a sustainable IT strategy freely, and we put them out on the Internet so that anybody can have access to them and tap into those resources. So, look up and down your value chain and see where there are others that already have that expertise and learn from them. 

Gardner: Before we close out, let’s take advantage of the fact that we must look to current and new technologies to solve these problems. What are some of the future opportunities? Even if we don’t know the how, perhaps we have a sense of the what. What is it that we can be doing in the future to bring these carbon net-zero realities right into our backyards?

Frey: We’ve talked a little bit previously about the fact that we don’t have all the low-carbon solutions we need. And one of the things that HPE did to help with that effort is we co-launched the Low Carbon Patent Pledge. HPE gathered with partners Meta, formerly Facebook, JPMorgan Chase, and Microsoft.

By putting those patents out there, making them freely available, we hope to accelerate the innovation opportunities out there. Perhaps it will be for things that we could have never imagined patents being used for, but some innovator will see a connection and be able to accelerate some new low-carbon solutions. I think there are other ways as well and that we’re seeing a shift from moving in technology from the general compute world to workload specific hardware and software solutions. We’re seeing advances in liquid cooling that are necessary as densities go up, and I think there’s a huge opportunity around software efficiency as well. This is a great untapped opportunity. Yet, some studies say that using a more effective software programming language, such as, for example, Rust, could reduce power consumption by the technology industry by up to 50 percent.

Learn More About

HPE's Living Progress Initiatives.

I think there are opportunities to have common platforms from the edge of the cloud so that we can all see across our technology operations, look at things such as utilization rates, power consumption, carbon emissions, and see those in a common way across that value chain and by being transparent, it highlights opportunities for improvement.

And finally, I think there’s a lot of opportunity that artificial intelligence (AI) and machine learning (ML) bring to optimization.

But we have to do that while paying attention to ethical AI principles as well, because these types of technologies can be misused if we’re not paying attention to the ethical implications. I feel that we have a strong need to not only use the ethical AI principles that are in place today but to continue to advance that thinking as well as more and more AI and ML solutions are brought to market.

Gardner: It’s been a fascinating discussion, but I’m afraid we’ll have to leave it there. We’ve been exploring how companies along with their partners, suppliers, and employees can best manage and govern the resources and assets for sustainability. And we’ve learned how HPE has newly accelerated its many programs and initiatives to reduce its carbon emissions, conserve energy, and reduce waste far earlier than its earlier net-zero days. So please join me now in thanking our guests. We’ve been here with John Frey, chief technologist, sustainable transformation at Hewlett Packard Enterprise. Thanks so much, John.

Frey: My pleasure. It was a delight to be with you today.

Gardner: And a big thank you as well to our audience for joining us for this sponsored BriefingsDirect discussion on the impact of information technology on the environment and society. I’m Dana Gardner, principal Analyst at Interarbor Solutions, your host for this ongoing series of HPE-supported discussions. Thanks again for listening. Please pass this along to your community and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how Hewlett Packard Enterprise has newly accelerated its many programs and initiatives to reduce its carbon emissions, conserve energy, and reduce waste. Copyright Interarbor Solutions, LLC, 2005-2022. All rights reserved.

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It’s Official—Flexible and Remote Work are Here to Stay, Say Empowered Employees

Transcript of a discussion on new research into how innovations such as contingent labor exchanges and intelligent workspaces are changing the future of work forever.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Citrix.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Gardner

The world’s office workers now have more clout and influence than ever over where and how they do their jobs. Those who have worked from home and want to continue are spurring on their employers to do more than embrace hybrid work. They’re seeking to reinvent the very nature of employment.

Stay with us now as we explore new research into how innovations such as contingent labor exchanges and intelligent workspaces are changing the future of work forever. To learn more about how flexible work models are the new normal for workers and businesses alike, please join me now in welcoming our guests. We’re here with Andrew Bartolini, Founder and Chief Research Officer at Ardent Partners in Boston. Welcome Andrew. 

Andrew Bartolini: Hey, Dana, I’m glad to be here.

Gardner: Tim Minahan is also here, he’s the Executive Vice President of Business Strategy at Citrix, in Fort Lauderdale, Florida. Hey, Tim.

Tim Minahan: Hey, Dana. Glad to be back.

Gardner: Tim, COVID-19 or not, workers seem to have spoken adamantly when it comes to flexible work. What are they saying and why is flexible work here to stay?

Minahan: If you think about major historical moments throughout the ages that have kind of reset how we live and how we work, certainly the pandemic will go down in history as one of those. While no one would ever wish the pandemic to occur again, if there’s any iota of a silver lining, it’s this rapidly accelerated digital transformation which has caused employees and employers to dramatically rethink the way they work, where they work, how they work, and who does the work.

Minihan

We’ve been studying this dynamic for several years from an executive and IT perspective and the knowledge-worker perspective. The latest poll of 13,000 knowledge workers around the globe clearly indicated that folks are not going back to the office five days a week. They’ve proven that they can engage and be productive anywhere, and they’re not going back. In fact, nearly 90 percent of those who participated in the poll said they plan to work on flexible models in the year ahead, with the majority of them indicating that they plan to remain fully remote.

Gardner: Is there a back and forth in how companies have been responding to this? And, of course, it’s very hard to predict what’s going to happen in two weeks, never mind two months, but is this creating some confusion, some angst? Is that contributing to what some people are calling the Great Revelation of why workers are seeking something new?

Workers want out of the office

Minahan: Certainly, there’s a near-term part of it where companies haven’t even figured out how to get folks back safely in a condition that’s conducive to working. But more realistically, it’s been a major reset. We’ve talked about the Great Resignation but also, I have heard it defined differently as the Great Revelation.

In fact, a similar study of 1,500 knowledge workers across North America shows that as many as 50 percent of workers in the U.S. have left or plan to leave their jobs. There are several different reasons, but it really boils down to three things: burnout, opt-out, and time out.

Well over a third of knowledge workers surveyed said they left their jobs because they're burned out by the stress of working in this prolonged pandemic environment as well as over the demands in the workplace.

From a burnout perspective, well over a third said they left their jobs because they’re just burned out by the stress of working in this prolonged pandemic environment as well as over the demands in the workplace. From an opt-out part, a lot of folks either took time during the pandemic to retrain themselves, to get new skills, or they just wanted a new challenge. They’ve been working at their employer for a while and they’re looking for a promotion or they literally just want to take on a new challenge.

An interesting part of the study is a number of respondents said they ditched their jobs really to feel like they can get some control over their lives, which had somewhat gotten out of control. The last part of the study is time out, and you think about the dynamics of the workforce. We often forget, but if we can think back, unfortunately 48, 50 months ago we had a global talent shortage. McKinsey was estimating that we had a shortage of 95 million medium- to high-skilled workers, especially those with the most in-demand skills, such as cloud, artificial intelligence (AI), and security, skills needed to digitize and modernize your business. And guess what? That hasn’t gone away. So, these are the dynamics that are really causing a complete reset of the workplace.

Gardner: Andrew, it sounds as though workers have learned a few lessons through this whole experiment during the last couple of years. What’s working best for them when it comes to getting things done and how different is that from just two years ago?

Bartolini: Right. I mean this has been a dramatic, radical shift. Necessity is the mother of invention and at the core, people are resilient. They evolved when they had to. When we go back to March of 2020, there was no choice, but people found a way to keep working. Maybe they had a home office but more frequently, people were working from their kitchen tables and from their bedrooms.

Bartolini

How workers and teams were able to maintain productivity was amazing, but it wasn’t necessarily easy. Some part of our research focuses on the contingent workforce but also on the supply chain. I remember speaking to the number-two person for a Fortune 50 pharma company a couple of weeks after the shutdown. She was talking to me about how they were completely retooling several Asian factories to start manufacturing hand sanitizer because they clearly saw a huge demand or future demand coming.

We started to drill into the weeds, and I was talking about the challenges of the global supply chain. She paused and said, “The biggest challenge for us has been in dealing with the team working from home.” This was sort of at the height of uncertainty around the risks of COVID-19 and the impact there. And as someone who’s been generally working virtually for about 20 years now, I almost forgot that. I live in Boston where the rush-hour traffic is terrible because most people work in an office environment. Overnight, that changed.

It sounds odd, but the pandemic, because it helped minimize distractions -- you can’t go to a movie, you can’t go to a mall-- helped people focus on the work at hand. I think that the pandemic unified teams, I mean especially for those with family responsibilities. When you bring the office into your home, you erase the lines between work and home and things blend into each other, particularly for people with young children at home.

And so, I think the reaction to that was that team leaders and leaders of large organizations understood that they needed to instill greater levels of communication and collaboration. Really, as the leaders themselves, many chief procurement officers (CPOs) talked about having much better scheduling and interacting more with the people on their teams as well as their direct reports in a virtual environment than they had in the preceding years. So, I think it’s all part of having to learn on the fly. I think by and large, organizations were sort of able to get through the challenging time and are now settling into this period of greater uncertainty. 

Gardner: Well, it seems as though the workers get it. The workers have found how to be productive and gain balance in their whole lives quickly, but employers seem to be still thinking we’re going back to the nine-to-five and the cubicles thing. Are employers lagging in their perceptions? Why haven’t they learned the same lessons of how this can work so well?

Mind the management-employee gap

Bartolini: Yes, I do think there’s always been a gap between sort of the workers and their views and management if you will. I don’t think that the gap, at least in our research, is necessarily related to the pandemic itself. When we were looking at it sort of pre-pandemic, maybe around 21 percent of the workforce was remote. We’re doing a study right now and the early indications are that post-pandemic, fewer than 10 percent maybe even fewer than 5 percent of all businesses plan to revert to the way things were, doing that nine-to-five thing.

Workers Speak: Remote Work is Here to Stay.

Now You Can Enable it in a Secure, Reliable Way.

So, I think that the gap is a larger, more general one. I mean, Great Resignation, Great Revelation right there. When you look at the shift in power from employer to employee over the past couple of years -- the McKinsey study that Tim just quoted being one great example -- we’re really dealing with the market where there’s this Great Resignation plus a huge demand for talent. There’s extremely low rates of unemployment and we’re really experiencing what we would call a talent revolution. It’s a revolution that’s hitting workers of all types. It’s hitting white collar, blue collar, and the contingents as well. It impacts their voice and what they’re looking for from an employer, whether that’s flexibility or a sort of greater alignment between the companies that you work for and the purpose of those companies. 

There’s strong demand for engagement with corporate culture. This is really across the blended workforce. Look at the blue-collar workers seeking safer and better work conditions. Workers seek the intrinsic rewards, such as better pay, better benefits, but also the extrinsic benefits. There’s been that gap and employers have been slower to respond to that, but by necessity again, they’re going to need to start to craft engagement models and employment models that allow them to attract the best talent.

Gardner: Tim, what do these employees need to do to close this gap functionally even if they get it, even if they want to? What’s missing from a lot of employers in terms of making the accommodations to keep their employees happy, productive, and flexible?

Redefine where, who, and how talent works

Minahan: Now, the savvy employers recognize that this is an opportunity to drive greater innovation to recruit and retain the best skill set. They need to use a lot of the same tactics that they used out of necessity during the pandemic, such as allowing people to work more flexibly and remotely and arming them with more effective productivity and collaboration tools. They need to be able to rethink their workforce strategies. Whereas before they had to compete with folks down the street in major metropolitan areas such as San Francisco and New York, now they can hire the best talent by empowering the work wherever they want.

When they're doing thoughtful research, maybe it's time for them to be remote. When it comes to brainstorming and strategic planning, maybe its better for them to come together.

When you think about what this post-pandemic world of work is going to look like, there’s really three categories. One is what we’ve talked about and that you hear about in the press, which is where work gets done. It’s much more transcendent than just does Sam or Susie come back in the office three days a week, five days a week, or not at all? Really, it is about, “Gee, how do I create and maybe even rethink the role that the office plays? How do we create a work environment and a toolset that allows employees to perform the different types of work they do in the best way possible?” When they’re doing kind of thoughtful, meaningful research and other work, maybe it’s better for them to be remote. When it comes time for brainstorming, planning, strategic planning, that type of thing, maybe it’s better for them to come together.

Then you begin to look at your real-estate footprint. “Do we have a big office in a major metropolitan area, or do we downscale? Do we transform that office from one where everyone goes into the office, punches a virtual clock and closes the door into more of a collaboration space where they come together for very discrete moments and activities, or into a customer-experience space where we can invest more in those high-traffic metropolitan areas and create an engaging experience such as you might experience in an Apple store?” That’s the “where.”

Then, there’s the “who.” Smart companies recognize that they can use what they learn through the pandemic around remote work to go out and recruit new talent. In other areas, they’re not beholden to a commuting distance to one of their office hubs. Also, thinking about rebalancing the workforce where they might not be able to secure that developer or designer when competing with Amazon or Google on a full-time basis, there’s a whole host of very skilled and talented freelance workers and free agents who have that skill that are willing and interested in taking the projects that they want. So, you can get the top talent.

And then the last part is the “how they work.” Over the several past few decades, we’ve been amassed a massive amount of tech debt. We’ve deployed a whole host of individual devices and applications that on their own were designed to solve a particular business process whether that’s automating the procurement process or something else, right, Andrew?

Bartolini: Right.

Minahan: However, when you stack them all on top of each other, there’s a cacophony of technology now that disrupts an employee’s day. So, having a digital workspace allows an employee to have access to all the work resources they need in a very secure way, no matter where work gets done, and layers it with automation and productivity and collaboration tools that allow them to work at their best. It allows for more efficient work execution and collaboration across all of these systems so that they’re not being disrupted throughout the day, but they actually quickly can get work done, quickly find the information they need, and do their best most meaningful work.

Gardner: Andrew, Tim just laid out some interesting things around where and who and how but the “who” kind of jumps out at me. It seems to me that a full-time employee (FTE) isn’t the only option. You don’t always need to know where they are, but maybe you also don’t need an FTE for every type of process or productivity. So, what is the future of work exchange and how should we think about the types of labor categories differently while we’re re-examining everything else at the same time?

Flexible work here, there, and everywhere

Bartolini: Tim is exactly right, and I think your question is absolutely on point. So, the future of work exchange is a web site that our partners launched only last year. We’ve been tracking the growth and expansion of the contingent workforce since the start for the past 13 years. They’ve really focused on what we define as the future of work and we think about that as the strategic optimization of how work gets done through the evolution of talent engagement, the advent of new technology and innovative tools, and the transformation of business standards.

And the reason why we’ve invested greater resources in this area is because the growth and expansion of the contingent workforce, the extended workforce -- it’s called a lot of different things today-- has grown dramatically over the past decade. Our research shows that 47 percent of all workers working for a company today are not FTEs. So almost half of all workers are contingent workers. They’re the independent contractors and consultants.

A decade ago, that number was 25 percent, and we expect that number to climb above 50 percent. We expect there’s probably a natural ceiling that will be hit at some point in a world where talent continues to be a major differentiator. But as organizations start to be more focused on “how” work gets done, rather than “who” does it, there’s been a shift. We’ve erased many of the geographic constraints that companies have traditionally had when trying to staff projects and to find the best talent. That’s been removed by technology and the advent of digital marketplaces where people can find the talent and do matching.

Workers Are on the Move. Here Are Five Things

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There’s been a shift in the way that organizations are thinking about what it is that they need to do to get their projects done, to get their work done, and it’s moved from the old view where the contingent worker was the temporary employee. Somebody’s going on vacation, somebody’s going out on maternity leave, we need to find somebody to fill a tactical position. Now, the expanded view of who we can bring in to do work and what that work is, much more strategic projects. It’s an evolving mindset that has been accelerated by the pandemic. It’s an interesting and exciting time for those working in procurement and HR to get their hands around what does their total workforce look like as they go forward.

Gardner: Tim, Ardent Partners reports that almost half of the workforce is no longer full-time. That means when they start working for a company, they’re not onboarded in the same way. They don’t get, “Here’s your 15 applications. Here’s your laptop. You have now 45 different sign-ons to deal with.” Now, you need to do all that on a more granular basis, maybe focused on a process or a project, not on an employee definition. How can technology support this interesting new mix of types of workers when it comes to getting things done?

Minahan: You’re absolutely right. That is something that companies had to grapple with throughout the pandemic. I’m thinking of some of our financial services customers that saw, as you might expect, a dramatic uptick in their remote financial advisory services.

One was telling me that they hired 3,000 new employees during the pandemic, and they needed to onboard them all remotely. They needed to get them technology very quickly, they needed to get them access to the applications and information they required and that was where they kind of really embraced a secure digital workspace strategy, leveraging in this case our desktop as a service offering to be able to quickly stand up a desktop that had a personalized workspace for that employee.

Thanks to virtual desktop-as-a-service, employees were able to get all the onboarding materials delivered in a reliable and secure manner so they could ensure the corporate information remained private and secure.

In some cases, they would send out a thin client device like a Chromebook to allow that employee to have access to a device. Or, in other cases, at least early on throughout the pandemic, they would allow them to use their home device. Because they had a virtual desktop-as-a-service offering, they were able to ensure that not only did their employee have reliable access to all the onboarding materials, all the applications, all the training, all the information needed, but also that it was delivered in a reliable and very secure way so they could ensure that their corporate information remained secure.

This is offering a whole new flexibility particularly as we look at who does the work. As we’ve transitioned virtual desktop delivery from on-premises to the cloud, it’s opened up and made desktop delivery much more turnkey and much more practical for a broader set of use cases. So, not just FTEs, but contingent workers, seasonal workers, temp labor, these freelancers that we’ve talked about, designers and the like, it’s allowed companies to stand up and empower and onboard these employees very quickly without putting their corporate resources at risk.

One great example of this is a customer and innovation partner of ours, Major League Baseball (MLB), which, throughout the pandemic in the full spotlight, had to grapple with how to put the season on, how to keep the players and employees safe, how to empower them. But at the same time, everyone was seeing rising incidents of cybersecurity threats. They were able to empower not just this employee base but also their supply chain with desktop services.

A lot of their supply chain partners are small partners and they needed to step up their security requirements and they just didn’t have a large IT department. So, MLB basically extended this desktop service to that supply chain so that they could be compliant, continue to deliver the high grade of innovative and quality services that MLB needed while meeting the stepped-up security requirements. And so, I think we’re going to see a massive shift if we believe that flexible work is here to stay. The only consistent place that an employee is going to work is going to be their digital workspace.

Gardner: Andrew, sometimes I think we get complacent about how important a role this technology is playing in allowing this all to happen. One of the ways for me to wrap my head around how essential and innovative and powerful the technology is, is to say, well, what if this pandemic hit 10 or even 15 years ago? If this had happened 10 or 15 years ago and we didn’t have cloud computing, we didn’t have desktop as a service, and virtualization was just starting out, where would we have been? It seems to me that we lucked out, right? We got just over the line on where this technology is capable enough to allow people to work remotely almost anywhere on the planet. This technology is, I think, underappreciated. 

Tech enables transition to digital workspace

Bartolini: Yeah, I would say, no doubt. I mean, there’s been a long steady march towards driving improved communication whether that’s among teams and the capability to chat or among trading partners as well. I mean, that’s another piece. If you think about the growth of the global supply chain, that’s been a technology-enabled phenomenon as much as anything else, when it comes to the workers and to the workforce, right?

If this was 10 or 15 years ago, I’d like to think that we would have seen many of today’s innovations come along much sooner. But from a workforce management standpoint, when you’re dealing with a workforce that is not full-time, that is much more transient in how it engages and how you engage, your approach to that workforce necessarily has to change. From a technology standpoint, if you have your old HR playbook of how you onboard a traditional employee, you need that same playbook now for the freelancers, for the temps, and you need to have those things codified and smooth because there’s a war for talent that’s going on right now.

And so, it’s not just the FTEs that are picking and choosing when and how they engage. It’s the independents as well. It is this extended workforce. And so, you as an organization have to be at the ready. You have to be the employer of choice whether that’s a short-term project or the long-term employer of still 50 percent of the workforce.

So, yes, technology has been absolutely critical, and it is only going to play a greater role. When I speak to procurement leaders, CPOs and directors of sourcing, there’s been a shift that has happened and it’s going to continue to happen. As you see company offices and the investment in corporate real estate shrink, that money is redeployed to productivity tools, to technology that can create the digital workspaces that Tim has just been talking about. So, there is this transition, and the technology has absolutely played a key role.

Gardner: And Tim, we talked a little earlier about employers needing to close the gap between recognizing a flexible workforce future. It seems to me that this has forced them to appreciate how impactful the technology can be, and in many ways, we’re only scratching the surface of what the technology is capable of. So, is the silver lining here that we’ve created a catalyst to technology adoption and therefore also a catalyst to further technology development?

Minahan: Yes, Dana. I think it’s the combination. Certainly, the pandemic has expedited everything as folks are looking at accelerating their digital transformation and the shift to more flexible work models. That is causing companies to think not just about how to deliver all the work resources, all the applications, all the content, all the collaboration tools that employees need to be productive and do it securely so they can work anywhere, but also looking at, “Gee, how do I help them work better?”

At the top of the list for prioritized investments for IT are collaboration tools that foster more efficient work execution across all these distributed work environments.

If you look at any of the analyst studies out there, at the top of the list of prioritized investments for IT this year are collaboration tools. Tools that foster more efficient work execution and collaboration across these distributed work environments. Some of them are actual tools such as whiteboarding tools, project management tools. And some of them are actually, this role in robotic process automation (RPA) or automation providing a way for frontline business analysts and business users to knit together all of the source systems to complete a single business process so that employees can actually not be burdened by technology but can drive differentiated business processes. That’s a key opportunity as companies are looking at, “Gee, a lot of the stuff I invested in out of necessity during the pandemic is now allowing me to drive new business processes and innovation in my business that I couldn’t think through before.”

But all of this needs to be accompanied by changes in policy and ultimately culture. So, if you think about our experience during the pandemic including on this podcast here whether we’re using Zoom or Teams or whatever, it was really the great equalizer. We all have the same size box, we all have the same access to the same tools, the same information but as we rotate back to what a lot of folks are trying to work out as hybrid work, it opens up the opportunity to create a high level of inequity in the workplace where you have these battles between the office-first culture and the remote culture and how you run meetings.

Gardner: We used to call them road warriors, remember?

Equality essential for hybrid workmates

Minahan: Exactly. And it’s a big shift that we need to talk about. How do you create equity in the workplace? You just assume that you’re going to have a planning meeting, a work environment where you’re going to have remote workers and in the office workers and how do you create that equality? So, as we talk about this hybrid work model, companies really have an opportunity now to figure it out.

Here at Citrix, for example, we are retrofitting all of our conference rooms to be hybrid oriented. We’ve got cameras now in the middle of the table. We’re operating on Teams whenever we have a meeting. We’ve got cameras on the whiteboard and we’re trying to develop protocols or policies that include remote people participating in a meeting. For example, they get to respond or ask the first questions. Those types of things which we haven’t really thought through need to be thought through, in addition to the technology infrastructure that enables such work.

What is the Future of Digital Workspaces?

Tune in to The Future of Work Podcast.

Gardner: Andrew, companies right now are sort of dealing with some tough, thorny problems around flexible work models and also the talent shortage. What does your research tell you about what they should do sooner rather than later in terms of how to best adjust to this? What is the research telling you are sort of the fast-track things that people should be doing to be best prepared for our strategic approach to these problems?

Bartolini: The new flexible work model, the extended or contingent workforce and its growth in size and in strategic impact really has changed the way that organizations need to engage talent. So, if you are a hiring manager, if you lead a large organization, hiring is now a 24/7, 365-day activity because workers’ duration and the amount of time that they’re staying with a single employee also has shortened dramatically.

And so, you need to be developing and building a talent pipeline and maintaining that pipeline in an ongoing fashion. You need to be working to become the employer of choice. The research that we’ve seen and the strategies that organizations should be employing, if they haven’t already, include that there needs to be a more empathetic approach to how you manage your people. I think that the workforce today, because of the labor shortage or the low unemployment and the high demand for talent really has allowed employees to spend more time seeking out the jobs with employers that match their own sensibilities.

Is there a purpose that the company can communicate to their candidates and to their current workers? What is the culture of the organization and how is that culture manifested when you’re dealing with people that are in a distributed environment and not meeting face to face? How are you thinking about the benefits and how are you trying to better understand what it is that your workers need from a flexibility standpoint?

I think all of those things sort of go back to how do you engage your talent? And that’s the talent that you’re trying to recruit to bring into your organization and the talent that you have now that you’re trying to retain.

Gardner: Similar question for you, Tim. As companies are grappling with flexible work and talent shortage issues that are critical, what does Citrix’s research and its product development efforts tell you that they should be doing now tactically in order to be set up strategically for this cultural shift as we’ve termed it?

Minahan: The number one thing, if you look at it, is that 90 percent of employees plan to use a flexible work model this year. And 80 percent prefer to continue on in that fashion. Companies really need to think about their workforce strategies in different ways. They need to be open to flexible work arrangements to secure the top talent and the modern skills that they need, but also to retain their existing talent who are increasingly looking for new opportunities in this hot job market.

Secondly, they need to create an environment from a technology standpoint that is conducive to allowing employees to do their best work. Before, if everyone was coming into the office, your technology investment was pretty systematic. Now, you have to look at what it is going to take to empower an employee to work from their own device while protecting corporate resources, while ensuring that they have the collaboration, communication, and productivity tools that they need to foster more efficient work execution and collaboration across this distributed environment.

Those are the types of things folks need to think about. But they need to be coupled with a change in policy and culture. One that is forward thinking about, “Okay, if I have a new workforce strategy that is a balance between FTEs and contractors to make sure we have the right skills on the right project and people who are managing things in much greater pools of talent. What are the policies that we need to put in place to make that most effective?

If I know my employees and assume that we’re always going to be in a work environment where we’ve got to have in-person and distributed folks participating in the same meeting, what am I doing to foster an environment that makes it a meaningful experience for everyone involved, not just those who are sitting in the room? And then finally, what am I doing culturally to ensure that development opportunities and career advancement opportunities are not hindered by the choice of where an employee works?

There’s a major reset that companies need to think through. In order to be competitive, to be able to secure the top talent, tame the top talent, and drive and modernize your business with this talent, you need to adjust on those three vectors.

Gardner: Tim, I really respect the amount of research that you’re doing there at Citrix. You’re being empirical and not just using gut instinct on this and that’s great. And you’re also sharing this research, so where can people go to learn more? Where can I find some of the resources that Citrix is providing?

Minahan: I appreciate the feedback, Dana. You can go to Fieldwork by Citrix where we incorporate and make our research available. We also have our own kind of remote-work podcast there. Go to www.citrix.com/fieldwork to check it out.

Gardner: Andrew, where can people learn more about Ardent Partners, their research, and the future of work exchange?

Bartolini: Go to futureofworkexchange.com, that’s our site that’s got all of our current research and innovative ideas and tools. Tim even has a few articles up on the site there, too, which we appreciate.

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect discussion on ways workers and businesses alike are adopting flexible work models as the new normal.

And we’ve learned how innovations such as contingent labor exchanges and intelligent workspaces are empowering workers to control their destiny and reward their employers with higher productivity.

So, a big thank you to our guests, Andrew Bartolini, Founder and Chief Research Officer at Ardent Partners. Thanks, Andrew.

Bartolini: It’s been great, Dana. Thank you.

Gardner: And with Tim Minahan, Executive Vice President of Business Strategies at Citrix. Thanks so much, Tim.

Minahan: Thank you, Dana. I appreciate the dialogue.

Gardner: And a big thank you to our audiences as well for joining this BriefingsDirect future of work innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout these series of Citrix-sponsored interviews.

Thanks again for listening. Please pass this along to your community and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Citrix.

Transcript of a discussion on new research into how innovations such as contingent labor exchanges and intelligent workspaces are changing the future of work forever. Copyright Interarbor Solutions, LLC, 2005-2022. All rights reserved.

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