Extended Reality (XR): How It’s Changing Work and Employment

Extended reality, commonly known as XR, is becoming a mainstream technology that is used by many companies across various industries. XR consists of immersive technologies that have proven their capabilities in the gaming industry, for example. XR headset shipments are expected to grow to 105 million by 2025.

In addition to implementation in the gaming industry, XR also has many applications in the workplace, especially as more companies look to embark on digital transformation. XR can be a complex term to understand. Other technology words, such as augmented reality (AR) and virtual reality (VR), are frequently mentioned. What is the difference between these realities?

Below is more about XR, how it is changing the way employees work, some benefits it offers industries, how it has evolved, and what to expect for the future.

What is XR?

Essentially, XR is an umbrella term that describes several different but related technologies, including AR, VR, and Mixed Reality (MR). These three technologies are considered to be subcategories of XR, and each aims to achieve different results.

XR describes AR, VR, or MR, and a key component of XR is how it takes the screen from the human to the PC and modifies it in some way. For example, VR immerses you in a virtual environment, as its name suggests.

XR can also augment or add to a user’s environment, known as AR. Think of the game Pokemon Go, which quickly became a worldwide phenomenon in 2016.

When VR and AR converge, that is what is defined as MR. Again, these technologies can be confusing, but understanding XR and its capabilities is crucial in an ever-changing business landscape. Any device that uses AR, VR, or MR can be called an XR device.

The term is often overused as it has become a buzzword for marketing companies and brands. Like the terms “digital” and “natural,” marketers use XR to describe some of their latest products, hoping more consumers will spend on them. However, how can companies use XR to their advantage?

Which industries will benefit from XR?

From healthcare to manufacturing and everything in between, many industries can leverage XR to reap the benefits of this advanced technology. Below are some examples of other industries benefiting from XR:

  • Architecture, construction and engineering
  • Military
  • Events and conferences
  • Retail sale
  • Education
  • Automotive
  • Entertainment
  • Marketing and publicity
  • sports

It appears that most industries stand to benefit greatly from the use of XR technologies. According to research from PwC, VR and AR technology has the potential to add $1.5 trillion to the global economy by 2030.

Much of the fuel that drives this economic growth comes down to the benefits of technology for business. The business benefits of XR are richer and more attractive to executives throughout the business environment.

A 2019-2020 report from VRX suggests that 98.6% of business users said they would at least consider investing in XR in the next few years. Because XR will be in high demand sooner rather than later, XR developers and manufacturers will have their work cut out for them.

How XR is changing the future of work and employment

Before the COVID-19 pandemic, many executives believed that immersive technologies would disrupt companies across various industries. As the world continues to adjust to the effects of the pandemic, XR is proving to be a useful tool that companies can and should use to improve their internal operations.

The workplace is becoming increasingly decentralized and highly mobile, which means employee expectations are also changing. HR professionals across industries and around the world must now meet these unique needs of employees in a remote environment. For example, providing a great employee experience is paramount for companies looking to improve their retention rates.

Below are some ways that XR is changing the workplace and how it is affecting employment in many sectors of the economy.

remote work

With an unprecedented number of employees working remotely, whether part-time or full-time, employers are looking for ways to improve their business model to meet the needs of their remote employees. XR is an invaluable tool that companies can leverage to foster multi-dimensional collaboration experiences among team members.

Equipping employees with VR or AR head-mounted displays can be a game changer for remote workers and senior management, especially during meetings that are usually held in person. Examples of XR tools that companies can take advantage of include The Wild, VRtuoso, vSpatial, and Spatial. XR technology will be a widely used solution for companies with remote workforces.

employee training

One of the main benefits that XR offers is to simulate real life situations for employees. Walmart has reaped this benefit, considering how the retail giant implemented virtual reality headsets into its employee training program in 2016. When the pandemic hit, the company relied on these headsets to train employees on how to react kindly to challenging customer situations.

MR provides an immersive environment for surgeons to practice their techniques without making a single incision in a human body in healthcare and medicine. Training is a top priority for almost every company, as investing in employee training and development can reap great rewards in the long run.


When a company implements XR, it can help bring together top talent for recruiting purposes for a number of reasons. Younger generations are more likely to work for a company that takes advantage of newer technologies, and XR is no exception. Gen Z is expected to make up 30% of the workforce by 2030, according to data from the Bureau of Labor Statistics (BLS).

Companies should consider leveraging XR technology to meet the digital needs of the Gen Z population. Consider how HR departments can consider investing in XR to improve their hiring processes. With a virtual reality headset, candidates can experience a day at work at a company without having to visit the office in person. It would then be a perfect transition after being hired, as employees would feel comfortable using virtual reality during the employee training that follows.

The XR apps listed above are just a few of the ways this revolutionary technology is impacting work and employment around the world. With the rise of remote work and the need for better hiring and training, more companies will consider leveraging XR to support their business goals.

XR’s role in the ever-changing workplace

Employers who recognize the benefits of XR will likely outperform competitors in their industry, especially in the years to come. Because investing in XR could include high upfront costs, companies should consider their needs, budgets, privacy concerns, and other important factors before making any decisions.

The combination of physical and digital environments offers benefits for companies and their employees. A company willing to invest in new technology will also value employee satisfaction and engagement, which can help attract quality candidates and promote company success.

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