Redefining Work: Three Forces That are Reshaping Jobs
THREE FORCES THAT ARE RESHAPING JOBS
Rotman Management Magazine
1 May 2018
By John Hagel, Jeff Schwartz and Josh Bersin
Three forces of change are leading to a profound shift in the nature of work, and there are implications for individuals, businesses and public policy.
Three forces of change are leading to a profound shift in the very nature of work, and there are implications for everyone.
“Economic Possibilities for Our GrandchilIN HIS 1930 ESSAY, dren”, John Maynard Keynes foretold a future of ‘technological unemployment’ and 15-hour workweeks. We have long since given up on early 20th-century utopian visions of a leisure society in which machines do everything for us; but there is no question that what we actually do these days is changing fast — and will continue to change.
The biggest challenge in understanding the future of work comes in surfacing the implications for three broad constituencies: individuals, employers, and social and governmental institutions. Unless all three are aligned in their understanding and actions to address emerging opportunities and challenges, the road ahead will be bumpy, at best.
The good news is that if our organizational leaders understand more fully how the complex landscape of work is evolving, they can target their activities in ways that will help workforces around the world — and societies in general — anticipate and prepare for what lies ahead.
The Three Forces
Three powerful forces are shaping the nature of work and the future workforce:
Technological advances in the areas of robotics, 1. TECHNOLOGY. artificial intelligence (AI), sensors and data have created entirely new ways of getting work done that are, in some cases, upending the way we use and think about our tools and how people and machines can complement and substitute for one another.
Demographic changes are shifting the compo2. DEMOGRAPHICS. sition of the global workforce. In most places, people are living longer than ever, and overall, the population is becoming both older and younger, with individual nations becoming more diverse. Even more challenging, the younger generations will be increasingly concentrated in developing economies, while the developed economies (and China) get ever older.
Thanks to digital technologies and public 3. THE POWER OF PULL. policy shifts, individuals and institutions can exert greater ‘pull’ — the ability to access people and resources as needed — than ever before. Institutions and prospective workers alike now have access to global talent markets, enabled by networks and platforms opening up new possibilities for the way each interacts with the other. The demand for these platforms will likely be enhanced by increasing customer power and accessibility of productive tools and machines, opening up opportunities for more creative work to be done in smaller enterprises and by entrepreneurial ventures.
We will now take a deeper dive into each of the three forces.
FORCE #1: The Role of Technology
Past technological revolutions — mechanization, electrification, computerization — radically reshaped work, jobs and the organization of business and society. What is different this time is that today’s advances in digital technology are remaking not just manufacturing and low-skilled labour (the focus of past revolutions), but every sector of the economy and society.
Indeed, exponentially improving digital technology and infrastructures are reshaping the economics of work across the spectrum. On the one hand, automation is dramatically lowering the cost of certain routine tasks, as is expanded geographic access to low-wage labour. On the other, organizations can significantly augment the value of other tasks by leveraging technology capabilities and the ability to access deep specialization, wherever it is located.
Consider how today’s technologies are beginning to augment human capabilities. As just one example, by helping us ‘see’ much more richly the evolving world around us, applications based on augmented reality (AR) can help us focus our curiosity, imagination and creativity on early signals of the potential changes ahead that really matter. Already, AR technology is helping workers out in the field, far from their desktop computers, to assess unexpected developments and focus their effort on the actions that could have the greatest impact. And it’s hardly just cognitive technologies such as AR: In the robotics space, prosthetics and other augmentation devices are helping technicians and others to perform operations that were unimaginable a decade ago.
More broadly, an expanding array of technologies, ranging from 3D printing to biosynthesis, are making productive tools ac- cessible to smaller and smaller businesses, thereby eroding some big companies’ traditional advantages in developing and producing new products and services. This has the potential to create more viable job opportunities for workers in smaller enterprises over time.
We also should not lose sight of the impact of the accelerating pace of technology evolution and the proliferation of data on the skills required to do work. More and more knowledge is being created — while other knowledge becomes obsolete — at an accelerating rate, making it necessary to update our skills and job descriptions ever more rapidly to keep up.
FORCE #2: Demographics and Labour Supply
The workforce in many economies — especially the developed economies and China — is rapidly aging. This demographic trend is further amplified by both low birthrates and enhanced longevity made possible by advances in public health and medicine. For a variety of reasons — ranging from financial need to a desire to continue to make a difference — many older workers are extending their careers well beyond the traditional retirement age.
The prospect of older generations working for longer periods as their physical capability to remain employed improves could affect the pace at which younger talent and ideas renew organizations — and potentially intensify the intergenerational competition for jobs. It could also lead to a substantial increase in seniors participating in the ‘gig economy’, out of post-retirement desire or necessity.
In parallel, developing economies are supplying a growing share of younger workers to the global workforce. Digital technology infrastructures are making a growing number of these workers available — as full-time or gig workers—to developed economies that are confronting an aging population, not to mention giving them access to each other across the developing world. More generally, women and many marginalized population segments are slowly gaining ground in employment spheres around the world. As population growth in developed countries slows, organizations will be under increasing pressure to deepen the talent pool by including workers from more backgrounds.
There is growing evidence that more diverse work groups and teams generate more creative and higher-impact results — an even more important reason for organizations to become more aggressive in drawing in diverse segments of the global
Over time, as more routine tasks are automated, people should be able to achieve more of their potential.
population. The likely net effect will be the workforce expanding to historically underrepresented populations, as well as organizations needing to change work practices to accommodate a more diverse employee base.
FORCE #3: The Power of Pull
Market trends will also play a role in shaping the future of work. In responding to both changing customer demand and the ability to address labour needs more flexibly, the power of pull will likely lead to much tighter alignment of work with customer needs.
Why are customers acquiring more power relative to vendors? Because of their new ability to choose from an expanding array of product and service options globally, to access more in- formation about these options, and to switch from one vendor to another if their needs are not met.
With buying options expanding, customers are becoming less satisfied with standardized, mass-market products and services, instead seeking creative, tailored niche products, services, and experiences. This dynamic is playing out in digital product markets such as music, video and software, but it has the potential to rapidly extend into physical products and services, as the technology trends outlined above make it far more feasible for niche vendors to access the means of production. The result is likely to be a growing fragmentation of product and service businesses, with small companies employing more of the overall labour force.
On the supply side, labour markets are evolving in ways that enhance organizations’ ability to access and work with talent when and where needed. Global digital infrastructures are making it possible for employers to connect with, combine, and leverage talent wherever it resides. A growing array of digital platforms is making it easier for potential employers (and customers directly) to find the most appropriate talent anywhere in the world and to pull that talent together to perform specific tasks.
Conversely, the same digital platforms are making it possible for workers to exert ‘pull’ of their own. Online communities such as Glassdoor offer workers a great deal of insight into prospective employers’ operations and culture, narrowing employers’ historical informational advantage. And individuals operating in the gig economy can find, contract with, and work for employers worldwide using the Internet and other digital technologies.
The power of pull forces described above will likely spur growing demand for more creative work, as customers shift away from mass-market products and services, as workers in smaller businesses gain greater access to the means of production, and as platforms help to connect niche product and service providers with smaller segments of customers globally.
The Workforce Redefined
These three forces of change are leading to a profound shift in the nature of work. Employers and workers alike will no doubt find this shift challenging, but over time, as routine tasks are increasingly automated, a growing number of people should be able to achieve more of their potential. Following are two key principles of the new definition of work.
The industrial era defined TECHNOLOGY WILL RESHAPE EVERY JOB. work largely in the form of highly specialized and standardized tasks that became increasingly tightly integrated. This applied not only to factory jobs and manual work, but also to a broad range of white-collar and knowledge-worker jobs such as HR staff, legal staff and even salespeople and marketers. And it is precisely components of these types of work that are vulnerable to disruption by robots and AI. Law firms are already beginning to automate a significant number of routine tasks, news websites are beginning to use AI to write stories, and many of us use intuitive software to complete our taxes.
Many conversations about the future of work quickly devolve into discussions of the potential of robotics and AI technology to cut costs, automate tasks and displace human beings altogether. The anxiety is understandable, given these technologies’ continuing exponential price/performance improvement and the impact they are already having on the elimination of jobs. However, this narrow view misses much of the larger opportunity regarding future work and productivity. While perhaps a useful starting point, disassembling work into a set of tasks and orchestrating the capabilities of people and machines is not necessarily the goal. The greater opportunity to enhance productivity may lie in reinventing and reimagining work around solving business problems, providing new services, and achieving new levels of productivity and worker satisfaction and passion.
The growing availability of cognitive technologies and data also presents an opportunity to radically re-engineer business processes to leverage the unique capabilities of people, machines, and data to achieve desired outcomes. We expect to see multiple approaches to redesigning jobs emerge: From a narrow focus on identifying tasks to automate, to the radical reengineering of business processes, to the reimagining of work around problem-solving and human skills.
In this view, employers should become much more focused on exploring opportunities to create work that takes advantage of distinctively human capabilities such as curiosity, imagination, creativity and social and emotional intelligence. Research suggests that more than 30 per cent of high-paying new jobs will be social and ‘essentially human’ in nature.
Increasing diversity in the workforce will likely enhance the shift from routine tasks to more creative work, and we will see the emergence of hybrid jobs that increasingly integrate technical, design and project management skills. The specific skills will likely come from diverse domains and evolve rapidly, increasing the need to accelerate learning for both individuals and employers to stay ahead of the game.
We are still in the early days of integrating industrial and software robots into work — and of understanding their varying impacts and results, and thus far, the picture is blurry. Recent MIT research explores industrial robots’ negative impact on employment and wages. For example, a Mercedes-benz production facility in Germany recently announced plans to reduce the
‘Gigs’ based on human capabilities — curiosity, imagination, creativity, social intelligence and emotional intelligence — will likely grow over time.
number of robots on its production line and replace them with human labour. With increasing demand for customized auto options, reprogramming and switching out robots was more costly than shifting the line using human workers.
TechALTERNATIVE WORK ARRANGEMENTS WILL CONTINUE TO GROW. nology is transforming more than the way individual jobs are done — it’s changing the way companies source labour. Many global companies already actively use crowdsourcing efforts to generate new ideas, solve problems, and design complex systems. Deloitte’s Centre for Health Solutions and Centre for Financial Services, for example, collaborated with insurance company specialists on an online platform provided by Wikistrat, in four days generating 44 use cases regarding the potential for using blockchain technology in insurance.
Online platforms are playing a key role in accelerating the growth of this kind of crowdsourcing. In the next few years, three factors are likely to drive rapid growth of the gig economy — defined as ‘individual self-employed workers bidding for shortterm tasks or projects’:
1. As companies face growing performance pressure, they will have more incentive to convert fixed labour costs, in the form of permanent employees, to variable labour costs incurred when there is a surge in business demand.
2. Workers will likely increasingly seek work experiences exposing them to more diverse projects and helping them to develop more rapidly than in a single-employer career.
3. The desire of workers who are marginalized or under-employed — younger workers in developing economies, older workers in developed economies, and unskilled workers around the world—to find some productive work, even if it is not full-time employment.
A 2014 study estimated that 53 million people freelance in the U.S. (34 per cent of the national workforce), with 1.4 million freelancers in the United Kingdom. Over the longer term, the gig economy may evolve into something quite different. Many of the gigs being done today — for example, drivers of cars in mobility fleets and basic data-gathering — are routine tasks that are likely to be automated over time. Gigs based on human capabilities — emphasizing curiosity, imagination, creativity, social intelligence and emotional intelligence — will likely grow over time.
As the gig economy shifts to more rapidly evolving creative work, the way that work is done is likely to change, moving from short-term transactions to longer-term relationships that can help to accelerate learning and performance improvement. These more creative gigs — if they still qualify as gigs — will likely be increasingly done by small teams or workgroups that will collaborate on different projects over extended periods of time.
Implications for Individuals
In the new landscape of work we have just described, personal success will largely depend on accelerating learning throughout one’s lifetime. As this imperative takes hold, workers will need to take action on their own to enhance their potential for success. Three principles apply.
As rapid technological and mar1. ENGAGE IN LIFELONG LEARNING. ketplace change shrinks the useful lifespan of any given skill set, workers will need to shift from acquiring specific skills and credentials to pursuing enduring skills for lifelong learning. Individuals will need to find others who can help them get better faster — small workgroups, organizations, and broader, more diverse social networks. We are likely to see much richer, more diverse forms of collaboration emerge over time.
Historically, a career was defined 2. SHAPE YOUR OWN CAREER PATH. by a relatively stable, predictable set of capabilities that aligned with the needs of an organization and an industry. This included the progressive mastery of a set of predetermined skills required to advance in the corporate hierarchy, with accompanying salary boosts. But the half-life of skills and expertise is becoming shorter and shorter, with new, unexpected skills emerging as valuable. This has two implications. With needs constantly shifting, employers are less and less able to provide employees with well-defined career paths spanning years or decades. And to keep their skills current, workers must increasingly do whatever is necessary to accelerate their learning, including pursuing a diversity of work experiences or working for multiple employers at the same time.
Rather than relying on paternalistic employers to shape their careers’ nature and progression, workers will need to take the initiative to shape their own personalized careers. And as work evolves, individuals should cultivate a ‘surfing’ mindset, always alert to emerging, high-value skills and catching the wave at an early stage to capture the most value from these skills.
In our research into diverse work environ3. PURSUE YOUR PASSION. ments where there is sustained performance improvement — in everything from extreme sports to online war games — we have identified one common element: participants have a very specific form of passion — what we call ‘the passion of the explorer’. This form of passion has three components. First, a long-term commitment to making an increasing impact in a domain; a questing disposition that actively seeks out new challenges; and a connecting disposition that seeks to find others who can help one get to a better answer faster.
Implications for Organizations
Employers can help individuals along this journey by shaping work and work environments and encouraging individuals to learn faster and accelerate performance improvement. Following are three principles to follow.
The greatest 1. REDESIGN WORK FOR TECHNOLOGY AND LEARNING. challenge for businesses in the next decade will be to plan for the redesign and reinvention of work to combine the capabilities of machines and people, create meaningful jobs and careers, and help employees with the learning and support to navigate these rapidly evolving circumstances. Businesses will be well advised to not just focus on automation, but to identify the most promising areas in which digital technology can augment workers’ performance as they shift into more creative and value-added work. For example, how can companies use robotics to provide workers with access to environments that would be far too dangerous for humans? What are some ways in which Ai-based technology can complement human judgment and contextual knowledge to achieve better outcomes than either human or machine alone?
As organiza2. SOURCE AND INTEGRATE TALENT ACROSS NETWORKS. tions develop a better understanding of the expanding array of talent options available, they will need to design and evolve networks that can access the best talent for specific work. They will need to develop the capability to access talented people wherever they reside. Since this talent will likely evolve rapidly, these networks will have to be flexible and adapt quickly to changing talent markets.
3. IMPLEMENT NEW MODELS OF ORGANIZATIONAL STRUCTURE, LEAD
Organizational structures are ERSHIP, CULTURE AND REWARDS. evolving from traditional hierarchies to networks of teams that extend well beyond the boundaries of any individual organization. Hierarchical structures are well suited for routine tasks, but as the emphasis shifts to more creative work done by small, diverse groups, more flexible network structures will become more important.
Organizations will also need to cultivate new leadership and management approaches that can help build powerful learning cultures and motivate workers to go beyond their comfort zone. Indeed, leadership styles must shift from more authoritarian — appropriate for stable work environments shaped by routine, well-defined tasks and goals — to collaborative. In the future of work, we expect that the strongest leaders will be those who can frame the most inspiring and high-impact questions and motivate and manage teams.
The future of work is unfolding rapidly, and none of the constituencies discussed herein—individuals, businesses or public institutions — is prepared for the potentially turbulent transition and possibilities ahead. The goal of our framework is to inform and motivate individuals, organizations and public policymakers to proactively navigate the future of work and to come together and act now to make this transition as productive and smooth as possible.
John Hagel is Co-chair of Deloitte LLP’S Centre for the Edge and author of The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion (Basic Books).
Jeff Schwartz is a principal with Deloitte Consulting LLP and the global leader for Human Capital Marketing, Eminence and Brand. Josh Bersin is the Founder and Principal of Bersin by Deloitte, which provides research and advisory services focused on corporate learning. The complete report on which this article is based (“Navigating the Future of Work”) can be downloaded online.
Hagel, J., Schwartz, J., & Bersin, J. (2018). Redefining work: Three forces that are reshaping jobs. Rotman Management, Spring. https://www.pressreader.com/canada/rotman-management-magazine/20180501/281582356219134