Data and Major Influences Driving the Future of Work
"Study the past if you would define the future" – Confucius
In order to make predictions about the future of work, we have to understand the trends and data that have persisted through all the changes the labor market has seen ― especially over the last forty years since the breaking of the lifetime employment model. We have seen things in the data that can help us think about the future of work, such as:
- Decrease in the number of hours worked
- Increase in worker responsibility for training, development, health care and retirement
- Increase in the level of communication between workers and companies
- Increase in the average working age
- Decrease in the amount of time a team is based in the same location
- Increase in on-demand labor
Other powerful factors that will influence the future of work include:
- Technological change has always driven changes in the patterns of work. Every large step function (mechanization, electrification and computerization) has led to predications of the end of jobs, but instead resulted in net increases in jobs. There is a looming step function with automation and artificial intelligence (AI) in its early phases right now. Will this time be different?
- Globalization, despite recent setbacks, is irreversible. Labor markets are global and workers are mobile. Companies face different levels of regulation and social costs and global wage rates seek equilibrium. Any labor force strategy that is not thinking about the global war for talent is doomed to fail.
- Regulatory change is an incredibly powerful factor in the adjustment of the labor market. Regulations tend to change in periods of tremendous distress in the labor markets and the economy. Even if technological change creates distress, do not expect fundamental labor regulatory change but, instead, marginal social safety net changes.
Given the data and the major influences, we see a future labor market that embraces:
Total Talent Management
Companies have made every effort to transition from a fixed labor model to a variable labor model. However, the on-demand labor market has remained relatively stable over the last few decades. Companies that could shift entire work streams, due to process and regulatory alignment, have made those moves. Incremental moves and capturing "rogue spend" in human resource information systems (HRIS) will allow companies to make use of Total Talent Management, whereby leaders get a view of all labor resources in one Labor Resource Plane. Full-time employees, part-time employees, temp workers, vendors, drones and freelance workers, all in one system. By embracing Total Talent Management, companies can —quickly adjust their resourcing model based on market forces, but also be ready to win the war for talent regardless of how talent wants to be engaged.
Tasks, Team, Algorithms and Data
Work products for all workers will increasingly be broken into Tasks, currently the norm for on-demand workers. Those Tasks will be assigned via an Algorithm to your Labor Resource Plan to determine the optimal labor resource for the Tasks. This will require your labor resources to form Teams based on the work, so those with each Task in a project can collaborate. Down the hall, on another floor, across town or across the world, will be irrelevant as the Team uses Slack®, Skype® and other collaboration tools. As the Task is a discrete product, performance Data will be captured on Task completion and level of collaboration. That Data will be stored (and begin to replace the annual review) on a profile of that worker, all to inform the Algorithm in its allocation of future work.
All Workers Are Facing Tenets of Today's On-Demand Labor
Today's on-demand workers know a world of total responsibility. They own their training, development, the marketing of their skills, their back office, their health care and their retirement. We see a convergence between on-demand workers and full-time workers, such that all workers will feel that same level of responsibility. This will include a constant learning model for all workers. Skills will fade at a much greater rate as the pace of technological change quickens. This will require workers to use on-line tools and distance learning to make sure they have skills that match the market need. Top of the list on those skills is the ability to collaborate with disparate Teams.
Robots and AI Are Creating a Better Society For All?
There are three differences between this step function of technological change and those brought by the weaving loom, the steam engine, the assembly line and computers,.
- First, this change will happen at a much quicker rate as technology adoption curves compress.
- Second, this change will happen globally at the same time.
- Third, the increases in productivity through the use of AI and robotics will be orders of magnitude greater than previous technological changes.
What Will This Mean?
The World Economic Forum believes over the next five years there will be 95 million jobs lost in industries like accounting and legal, but 133 million jobs created in the robotics, engineering and creative fields. Other predictions are more pessimistic and longer dated. What we do know is that all previous changes led to net increases in jobs and large decreases in the cost of production. We know that the productivity improvements derived from AI and robotics will mean the number of hours a person needs to work to enjoy an ever-increasing standard of living will continue to decline.
At ADP we don't profess to know the future. We study the trends, we analyze the data and we talk to the leading experts in the world of work. From this research we derive our theories on Total Talent Management, on work being driven by Tasks, Teams, Algorithms and Data, on the convergence of on-demand and full time and on the coming Robot Revolution.
Food for thought: Where do you believe the world of work is going and what data supports your thesis?
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