| IAOP Thought Leaders Share Four Themes to Dominate 2024 | |
By: IAOP
IAOP THOUGHT LEADERS SHARE FOUR THEMES TO DOMINATE 2024
IAOP thought leaders expect Artificial Intelligence (AI), Environmental, Social, and Governance (ESG), talent, and the economy to be prevalent themes this year. While these are familiar conversations, expect the narrative to differ in 2024.
Although AI will continue to advance at an exhilarating speed, the technology must slow down to become more responsible. Regulations will be on the rise for ESG. The global skills shortage will widen, and the economy will be a top concern.
Read on to learn what IAOP’s Strategic Advisory Board members see on the horizon.
Artificial Intelligence
Mark Voytek, IAOP’s Chief Advisor of Thought Leadership and Founder and Managing Partner Voytechnology Partners, sees the integration and deployment of AI significantly transforming the Global Business Services (GBS) landscape.
“Generative AI (Gen AI) is poised to be a game-changer in GBS, offering unparalleled opportunities for innovation, efficiency, and new operating models,” he said. “By leveraging technology, GBS will transform service delivery models, enabling more personalized and efficient customer experiences. Gen AI's ability to analyze vast amounts of data and generate insights will drive more strategic decision-making, enhance operational agility, and foster continuous improvement in a company’s service offerings.”
“This technology is not just an evolutionary step but a revolutionary leap forward, setting new benchmarks in how services are developed, delivered, and evolved in response to changing market demands,” Voytek said.
Voytek predicts Gen AI will expand from the back office to the middle and front offices, and its functional penetration will also increase, offering new opportunities for GBS.
Mauricio Odovaine, Head of Outsourcing & Strategic Sourcing at Meta, agrees that AI, particularly Gen AI, is expected to remain at the center of conversations by governments, businesses, and society.
The technology will broaden its reach and impact to become more accessible and deliver a broader range of benefits – from more tailored experiences in daily life and scientific research advances, he said.
Meta, for example, is collaborating with Yale and EPFL’s Lab to build an open-source Large Language Model (LLM) to guide clinical decision-making in the medical field and with NYU on AI research to develop faster MRI scans and Carnegie Mellon University on using AI to create renewable energy storage forms.
AI presents tremendous opportunities for businesses to improve productivity with its potential to analyze massive amounts of data quickly, allowing for faster decision-making and reduced errors. Meta’s models can translate up to 200 languages, and its speech-to-speech translation models can translate voice into 36 languages with two seconds of latency.
For companies buying goods and services, communicating, gathering information, and selecting suppliers will increasingly become an AI-supported or driven process, potentially changing how companies buy and sell, Odovaine said.
Experts at Colliers also see AI as a technology tool poised to revolutionize all industries, including commercial real estate. The industry is exploring using AI to optimize portfolios and supply chains and identify target location strategies.
“Our subject matter experts see that these and other related technologies will increasingly enable predictive analytics to anticipate potential issues faster, help with decision-making, and enhance service quality to customers,” said IAOP Strategic Advisory Board Chair Maura Hudson, Head of Brand, Insights & Innovation Group at Colliers. “It will make work easier, reduce redundancy, and simplify processes.”
But with this significant influence will come the need to develop responsible AI.
“It is important that governments and tech companies do everything possible to ensure AI is developed responsibly, with transparency and accountability, and deployed in a way that benefits the most people,” Meta’s Odovaine said. “Eliminating potential bias in algorithms or moderating the content that AI consumes and produces are examples of this, but legislation about standards and guardrails around it is equally critical.”
ESG
Dan Lang, Senior Vice President of Sutherland and Executive Director of Vanguard Project, United Nations Global Compact, predicts that the tide will move from “tell me” to “show me” for many players, unfolding in ESG reporting.
“The integration of ESG considerations is evolving from a peripheral domain to a core strategy in business operations,” Voytek said. “As companies transition from a 'tell me' to the 'show me' era in ESG reporting, companies are recognizing that a robust ESG strategy is not just a check-the-box compliance requirement but a critical driver for sustainable growth. Further, companies often struggle with outdated ESG plans that will need to be addressed in this ever-changing landscape.”
Realizing that a robust ESG strategy will be critical to future growth plans, Hudson said companies will make significant strides in increasing efforts to create meaningful environmental impacts and evaluating diversity, equity, and inclusion (DE&I) initiatives.
According to Colliers, ESG regulations are expected to surge worldwide, with governments and regulatory bodies imposing stricter requirements on companies to disclose their ESG practices and performance. This will prompt organizations to invest further in ESG compliance and reporting.
Most large U.S. and Canadian businesses operating in the European Union will be required to report under the Corporate Sustainability Reporting Directive (CSRD). Similar regulations are expected in the United Kingdom, Australia, Canada, California, and by the SEC, with many focusing on reporting Scope 3 greenhouse gas emissions throughout the supply chain.
Colliers also sees that “greenwashing” will increasingly be called out. Companies seen as exaggerating the impact of their environmental or social programs may face new fines in the UK, lawsuits, and reputational damage.
Talent
The talent gap is expected to widen in 2024. According to Forbes, 41% of employees may leave their employers this year due to a global skills shortage. Technology advances are widening the disparity between what companies need and what employees have, and recruitment is more challenging than ever.
Hudson said that companies can overcome the skills gap by upskilling employees, increasing the focus on analytics in recruiting, leveraging outsourcing providers to fill fundamental gaps, and targeting newly emerging labor pools from universities or the open market.
IAOP’s Center for Social Impact members anticipate the ongoing adoption of impact sourcing as sustainability and social responsibility remains a focus. Integrating advanced technology and AI will create platforms for diverse talent pools worldwide to work remotely. Hiring and training for these traditionally untapped talent sources will also increase, helping to close the talent divide.
With the talent shortage in the U.S., companies may find new opportunities in Mexico and Latin America as a rise in nearshore outsourcing is expected. This trend opens new possibilities for collaboration while minimizing potential challenges associated with offshore outsourcing, such as time zone differences and language and cultural barriers.
“As we navigate the evolving landscape of the Talent Agenda and the Future of Work, it’s clear that the widening talent gap presents challenges and opportunities,” Voytek said. “To bridge this divide, it is imperative for companies to not only embrace innovative strategies like impact sourcing and nearshore outsourcing but also to focus on creating an environment where flexibility and employee choice are paramount.”
He added, “By integrating advanced technologies and AI into our talent acquisition and management processes, we can tap into diverse, global talent pools, offering them remote and hybrid work arrangements. This approach will not only help close the skills gap but also align with the evolving expectations of a modern workforce, ensuring that we stay ahead in a competitive global market.”
As the talent gap widens and AI becomes more integral to work, companies may consider market flexibility and employee choice to attract and retain the best talent, and hybrid work arrangements for some roles will become more of the norm, Colliers experts expect. Atrium Staffing predicts that many companies will increase their use of hybrid work arrangements by 81 percent.
Economic Impact
A poll of IAOP members found that economic uncertainty is the industry's number one challenge this year. This can lead to intensified competition and downward price pressure on providers.
According to the Everest Group 2024 Key Issues Study, cost and margin pressures ranked as the leading challenge, and revenue growth and cost optimization are viewed as the top-most enterprise business priorities.
Colliers sees ongoing credit constraints and political instability driving uncertainty. The effects of past monetary tightening measures may continue, resulting in limited liquidity in credit markets and hindering some, albeit not all, real estate transactions.
Other trends to watch for this year are an increased emphasis on outcome-based contracts, cybersecurity, compliance, ethical AI usage, data management, governance, and collaborative sourcing partnerships.