Five Dimensions Shaping the Future of Work
There are two areas that are heavily shaping the future of work. The first being the growing adoption of artificial intelligence, machine learning and augmentation in the workplace and of work tasks. The second being the five dimensions defined by the International Labour Office in their Literature Review on the Future of Work. These dimensions are:
1. Job creation
2. Quality of jobs
3. Social protection
4. Wage and income inequalities
5. Social dialogue and industrial relations.
The future of jobs refers to job creation, job destruction or the future composition of the labour force. There is a growing fear from many that the rate of task automation is faster than the rate of job creation and the emergence of new sectors that will arise as a result of automation.
“The number of jobs might fall faster than the global labour force when existing jobs are substituted by automation and other systems operated by artificial intelligence.”
It is estimated by McKinsey that automation could replace 45% of activities currently carried out by humans, but only 5% of jobs could be completely automated by technology. It is believed that in the future workers will spend more time on activities that machines are not capable of, such as managing people, applying expertise, and communicating with others. Humans will spend less time on predictable, physical activities and on collecting and processing data, both areas in which machines already exceed human performance. The skills and capabilities required will also shift, requiring more social and emotional skills and more advanced cognitive capabilities, such as logical reasoning and creativity. It is also believed that automation could disrupt the labour landscape globally, with a shift in industry placement from developing countries to developed countries. With an increase in robots being leveraged in developed countries alongside new innovative production techniques that require a sophisticated level of skill will result in the reduction of labour costs.
In contrast, the future of job quality touches on issues like future working conditions or the sustainability of social protection systems. The growth of the gig economy has resulted in an increase in self-employment, contingent and agency workers. This is expected to grow to 40% of workers in the US by 2020. It is believed that with such a shift away from the traditional types of employment, the definition of what constitutes employment could become blurred, leading to legal uncertainty in the labour market. While the work carried out by contingent workers is associated with substantially less job security it allows for a high degree of flexibility allowing workers to take control of their work life balance, while employers are able to financially benefit from worker flexibility and greater cost-savings. It is believed that the growth in the gig-economy will make way for improved work models allowing for greater labour market efficiency. However, contingent employment is often linked to lower wages, less training and reduced career development which in the longer term will have a negative impact on the labour market as the onus is upon the individual to continuously up-skill and develop themselves.
Outsourcing of previously secure jobs to self-employed individuals who perform small and precarious tasks is expected to lower labour standards on a broad base. Going forward work is likely to be project-based with high turnover rates, thus providing contingent or agency workers with less access to social protection and work security. Digital workers in the gig economy, who are considered self-employed, are required to provide the full amount of social security contributions, increasing their financial burden and making them relatively worse-off in comparison to traditional employees, who are also protected by social policies like the minimum wage, which is reserved once again for formal employees.
Discussions on wage and income inequality are concerned about both the average growth of wages and earnings - as well as their distribution across households in the future. There is a growing fear that households that fall into the lowest earning bracket may be the least prepared to adjust to the new world of work, producing a vicious cycle of widening inequalities. It is also felt that as the need for highly skilled workers increases, wage inequality will worsen.
Finally, the future of social dialogue and industrial relations refers to how organised workers institutions might evolve in the upcoming years with such drivers of change.
How is the Future of Work impacting HR and the way we work today?
When thinking about the future of work, there are many things to consider, one is definitely the impact of AI and augmentation on the workforce. It is believed that the growth of AI will result in 60% professions having at least one-third of work activities automated. As we discussed earlier, the gig-economy is primarily characterised by the prevalence of short-term contracts or freelance workers as opposed to the historic norms of permanent roles. The gig-economy has drastically transformed the labour market, with the rapid expansion of companies such as Uber and Deliveroo, we have seen the creation of new work models. These new work models have seen such growth as a result of the introduction of offerings such as flexible working. Employees are looking for more flexibility to really enable work-life balance. With the rise in new work models and technology to support these models, organisations are embracing a more agile way of working that provides its people with flexibility they need while serving the growing needs of the business.
Working with a multigenerational workforce requires leaders to embrace new ways of working. It is said that 60% of new jobs require skills possessed by only 20% of the workforce, so taking an approach to learning that enables employees to continuously learn and upskill is not only a by-product of the future of work but something leaders should be considering as they build out their workforce strategies alongside HR to ensure they retain top talent.
The future of work is not only about creating new ways of working or how new workplaces are derived or even how AI is replacing existing jobs. It’s also about how we can enrich new human capabilities and integrate them into the workforce, while creating more sustainable organisations for the future.
There is a growing focus on employee experience, with the power of AI, organisations are finding new ways of measuring employee engagement and sentiment. Such innovations have the potential to have a great impact on employee retention.
When we think about the future of work, we should be trying to identify how we create a more valuable environment for education, championing for the continuous learning of our workforces. The rise of technology allows us to learn when we want, how we want on any device we want, understanding how we build learning at the point of need into an organisations culture is key.
Ultimately, when you think about the role that HR will play in the future of work its really about enabling and supporting the up and re-skilling of our workforces to be able to quickly adapt to change and while embedding the importance and need of continuous learning. Alongside supporting employees it’s imperative that they begin coaching leaders to develop a leadership style that allows them both overcome the challenges that arise with the future of work, while embracing the need to support their people develop the necessary skills to ensure the success of their teams and organisations.