The way we work is changing. According to a popular estimation reported by the World Economic Forum, around “65% of children entering school will eventually work at jobs that don’t exist today”. The main cause of this is rapidly changing technology.
In this article, we will explore the impact of automation. More specifically, how it will change jobs in general, five ways the world of work will change in the next ten years, and the implications of this for how we manage people.
Automation, a force for good and evil
Technology has been changing the way we work since the beginning of sentient life. Whether it is a stone axe, a bronze axe, or a chain saw, with every incremental improvement, productivity went up. One person with a chainsaw has the same output as a few hundred with stone axes.
However, this doesn’t mean that these other people are all of a sudden unnecessary. This is because every increment in technology creates a number of new jobs. Where the stone axe could still have been made by the user himself, a bronze axe required a specialized blacksmith, people to mine copper and tin, merchants and transport to get the resources from mines to the smith, a woodcutter to supply wood, a charcoal burner, and maybe even a shopkeeper to sell the axe.
In addition, these transactions also involved money or another barter system that needed to be created and managed – and before you know it you have an economy with specialized jobs.
This is not a bad thing because specialization leads to higher productivity. This is shown below in a graph showing the growth in labor productivity in US Dollars, from 1950 to 2014. It is impossible to find accurate data over the past 10,000 years but one thing is for sure, the difference will be much larger!
This makes technology both good and bad – a creator and a destroyer of jobs.
Your personal circumstances will – to some extent – determine whether you will see the good or bad. Age, place of residence, and education play an important role here. A 55-year old coal industry worker living in West Virginia whose job is at risk because of advancements in technology will have a very different opinion than a 25-year old recent MIT graduate planning to move to Silicon Valley.
The impact of technology on jobs
Over time, however, we see that technology creates more jobs than it destroys. The content of the jobs it creates will be different. This is illustrated by the picture below, published first in The Guardian.
On top of greater productivity through specialization, technology has also increased spending power. Part of the increase in output per hour worked comes back in salary to the employee. This creates new demand and new jobs.
An example is a fourfold rise in bar staff since the 1950s or the six-fold surge of hairdressers since 1871. This explains the often-described growing importance of soft-skills.
The largest decrease in work happens in sectors like construction, agriculture, and industry and energy. Sectors like business services or health and welfare see the largest rise in new jobs.
5 ways our work will change within 10 years
The way we work is changing and will continue to change. In this section, I will present five ways our work will change within 10 years. Most of these come from a recent research report titled Labor in Transition.
1. It takes 10 years to (partially) implement what’s possible
When it comes to technology, it is good to realize that there’s a distinction between what can be done and what has been done. It is technologically possible to automate a judge for simple court cases for a few years already – but it hasn’t been implemented anywhere, with the exception of Estonia, which recently launched an initiative to do so.
According to the Labor in Transition report, 70% of the current technological potential will be implemented in 2030. I think this is a good rule to keep in mind when thinking about the future: it takes around ten to twelve years to implement half of the things that are possible today.
This is an optimistic view. If we look at a technology like blockchain, which was first described in 2008, it is still far from broadly implemented. Another example is Natural Language Processing (NLP), a technology that has been around for well over 50 years. It is still scarcely used in HR.
2. Most jobs will only partially be automated
Automation will touch everyone’s job – but not everyone’s job will be automated.
Automation enables us to perform tasks or procedures with minimum human assistance. The tasks that can easily be automated are the ones that are repetitive and predictable. It is, however, much easier to automate a task than a job.
Jobs involve both repetitive tasks and complex tasks. Automation will impact these repetitive and predictable tasks. This opens up the opportunity to spend more time on the complex tasks, which usually have the biggest impact on our performance.
This automation process is illustrated in the picture below. Five people have 20 tasks combined. Of these tasks, 10 can be automated (picture 2). Of these 10 tasks, 70% can be automated in 2030 (picture 3). Through rearranging tasks, some jobs disappear.
However, there are also new tasks being introduced (picture 4). In the end, one job has disappeared, and new tasks have been introduced in the remaining jobs (picture 5).
Source: with permission from Labor in Transition.
This is what we’re talking about when jobs are being ‘automated’. This automation is not a bad thing in today’s market – it compensates for the decrease in the working population for most Western countries.
3. Learning new skills
The rapid rise of new technology doesn’t necessarily require us to learn new skills. It could also potentially simplify highly complex work.
As an example, artificial intelligence (AI) is able to detect skin cancer based on pictures. Scanners that use this kind of AI software are so easy to operate that the doctor’s assistant can use it just as well as the doctor him/herself. This means that technology can simplify a task that is seen as highly complex and that requires a high level of education.
4. Skills gap
The rapid rise in technology leads to a discrepancy between the skills needed today and the skills learned in school. This has been shown in multiple places in different governmental reports, including Canada and the Netherlands, and has been suggested by Gallup to cause the rising unemployment of recent graduates in the United States.
The countries that are able to resolve this discrepancy most effectively will have a workforce with more relevant skills. Failing to resolve this discrepancy will have a clear impact on the local economy.
5. Upskilling vs. reskilling
When it comes to educating oneself, there is a difference between upskilling and reskilling. Upskilling involves learning new skills on top of one’s current skillset. Reskilling requires one to learn a whole set of new skills to – in the end – function in a new job.
It is estimated that a highly-developed country like the Netherlands with a working population of 9 million, 450,000 people need to be reskilled in the next 10 years. This boils down to 5% of the total working population. These people predominantly have lower-skilled jobs in transport and logistics, administration, and economics.
The demands for upskilling are much higher. It is estimated that 50% of the working population needs to be upskilled in digital skills requiring a doubling of the educational budgets for most companies.
The importance of these trends for HR
The world of work is changing and so are jobs. Job criteria that were previously irrelevant, are now a must-have. 5 years ago, no one was talking about analytical savviness for business partners. Today it is hard to find a job as a business partner in a large company without this skill.
This article also stresses the importance of job (re)design for HR. Job design has traditionally existed of four elements: job simplification, job rotation, job enrichment, and job enlargement. Job automation will become a significant element in the job redesign process, and this is a key responsibility for HR.
The skills gap is also something that touches HR. Not only does it stress the importance of working together with colleges and universities to enable them to teach the skills needed for the future workforce, but it also stresses the importance of re-education for the part of the workforce that is at most risk for automation.
Lastly, this article stresses the importance of upskilling employees in digital skills. This is relevant for HR professionals to teach them digital HR but also for the average employee to become more digitally skilled.
As a final note, our attitudes also play a major role.
I was speaking about these trends a few months ago to a number of HR professionals, when I got the feeling that they were much less excited about these changes than I was myself. In the discussion, I asked a few of them how these changes made them feel. Some were excited about it but others a bit scared.
I think the difference between these two attitudes is in whether you see the (uncertain) future as an opportunity or a threat. As an entrepreneur, I believe that technology will bring a lot of opportunities to build new and cool ventures.
I think we need more of that attitude within an organization as well. What opportunities do these new developments bring, how can we capitalize on them to become a better employer, and how can they make us a more competitive organization?
If we continually search for answers to these questions, I think most of us would see a brighter future.