One major consideration, it believes, will be the hiring and retaining of talented staff. “It’s only going to get more difficult to find good people,” declares Simon Hughes, director of medium-sized businesses at Microsoft UK. The current generation of new workers, born during the 1980s and commonly referred to as the ‘millennials’, are already bringing an entirely new set of expectations and demands to the workplace. Not only, says Hughes, is this generation of talent strongly independent and aware that demographic changes mean that many skills are in short supply, but it is also highly tech-savvy, with as many sophisticated applications deployed to support their private lives as they have in the workplace.

The research points to a much-increased level of job mobility. By 2020, 40% of the UK workforce will be graduates, it suggests, with the average worker going on to change jobs 19 times before retirement. Increasingly, these workers are becoming concerned with issues such as environmentalism and may choose an employer on the basis of their ethical, green or corporate social responsibility agenda.

In short, future generations of workers will be better educated, technologically proficient and have few qualms about leaving an organisation if it does not suit their needs or meet their expectations. “It seems that no longer do you hire people; rather, they choose proactively to work for you,” says Hughes. And that is not going to make life any easier for mid-sized companies in competition with larger organisations for talented individuals.

Towards the virtual office

Technology will play a key role in satisfying many of these changing demands. In particular, predicts Microsoft, the move towards mobile working and the partial – if not full – realisation of the virtual office, is one strategy by which medium-sized organisations can create an environment conducive to attracting and retaining millennials. Its research finds that 47% of workers already operate outside the office on a regular basis, but organisations need to do more to abolish what Hughes dismisses as the “ridiculous culture of ‘presenteeism’” that currently prevails in the UK. In medium-sized companies, which are often regarded by workers as stepping-stones into the big league, it will be critical to create improved flexibility. “If you don’t respond to your employees’ needs, you will lose them very quickly,” he adds.

In doing so, companies will have to move away from the linear methods of operation that have characterised post-industrial economies and embrace distributed business processes. “The knowledge revolution is built on distributed processes: this means virtual teams and individuals working in flexible ways to solve particular business problems,” says Hughes. This development must be served by decentralised IT strategies encompassing many of the consumer tools with which millennials are already familiar, such as social networking and real-time collaboration software. “Resisting or banning these tools [in the workplace] will turn people against you,” adds Hughes.

More importantly, however, weaving such tools into the fabric of the company will foster innovation. Consumer software tools and hosted services reduce the capital costs associated with hardware and software purchases and the ongoing costs of upgrades and maintenance, freeing up resources to devote to more strategic, business-led projects. As an increasing range of inexpensive, flexible and low-upkeep tools are presented to the mid-market, says Hughes, “clever IT is no longer the preserve of big business”.