The changing face of the workforce

You can barely open a newspaper these days without warnings of our impending obsolescence.

Technological advances, including automation, robotics, artificial intelligence and cognitive computing, could soon replace jobs as varied as airline pilots and medical practitioners, if the reports are to be believed — with a devastating impact on the global workforce.

And the impact may not be as far away as we think, with a March study by professional services firm PwC estimating that up to 38 per cent of jobs in the US, 35 per cent in Germany and 30 per cent in the UK are at risk of automation by the early 2030s.

According to David d’Souza, head of engagement and London at the Chartered Institute of Personnel and Development — an association for human resource management professionals — there are two extremes being discussed.

The first is a utopian future where automation allows people to focus on emotionally intelligent work without worrying about repetitive tasks.

Meanwhile, the second is the rapid diminishment of available jobs with a privileged elite dominating the economic landscape.

He believes both predictions neglect the complexities of modern day working, particularly in roles where a variety of different tasks are performed, but more needs to be done to make sure workers remain relevant as technology continues to advance.

“What we’re attempting to do is look at how technology can be used to augment people to do a better quality of job rather than just replace them,” he says.

Key to this change will be human resources departments, which d’Souza suggests will be able to play a more active role in worker development and future-proofing the workforce through technology adoption.

“The next generation will automate some HR tasks, providing a risk or opportunity to influence the strategic agenda,” he says.

And a key part of this new role could be identifying future needs of the business.Mervyn Dinnen, an HR and talent analyst and author, suggests some of the top challenges facing employers today include overcoming skills gaps and shortages, retention and engagement, and having a workforce able to respond to changing conditions. In the process, he suggests the way companies go about recruiting needs to change as the cost of replacing workers through reactive hiring continues to increase.

Age-old practices like job descriptions and matching candidates to exact skill boxes are not producing results, he argues, citing figures showing that up to a quarter of new hires leave a role in the first six months.

Instead Dinnen suggests firms need to think creatively about how to find hires that are right for the role despite not being from a predefined background assumed suitable, with recent examples including challenges and anonymous selection to manage the entry process.

He also believes the skills that companies focus on will need to change as automation becomes more common, with problem solving, critical thinking, empathy, creativity and accountability all considered key to making sure a workforce is not left irrelevant by the rise of the machine.

“There needs to be some element of human accountability for the decision the machine makes,” he says, envisioning a future where humans oversee automation processes.

To support this shift, Peter Spence, head of performance management at the Chartered Institute of Management Accountants, argues a greater emphasis on human capital and employee performance and engagement is needed.

But in order to focus on human capital, greater transparency will be required from HR departments that typically operate as silos disconnected from corporate performance, he argues.

“In terms of performance management, there is no reason for finance to know how well an individual is performing but it is relevant to know how well a team is performing,” according to Spence.

And some experts believe that technology, while presenting many of the challenges facing workers today, may also be the solution.

Andrea Eccles, CEO at London financial HR body the City HR Association, suggests HR professionals armed with new metrics data are increasingly finding a voice at the board level due to their insights into the workforce.

Indeed, a Chartered Global Management Accountant survey of 744 respondents found that quality of people (human capital) was deemed the fourth most important value driver at organisations behind customer satisfaction (76 per cent), quality of business processes (64 per cent) and customer relationships (63 per cent).

But for the moment only a limited number (15 per cent) of firms are fully embracing so called ‘people analytics’ to facilitate more sophisticated information and decision making, Eccles says. And more effort is needed to tailor information to stakeholder needs.

“We have to actually understand what stakeholders want, how to drive information in business and how we can make it meaningful so it gives good insights,” she says.

As a part of this shift, one solution being discussed is the combining of the opposing perspectives of HR and finance departments, who typically look at employees as an asset or a cost respectively.

A study by MIT Technology Review produced in partnership with Oracle argues collaboration between the two siloed departments can support digital transformation and produce new benefits, particularly as companies struggle to engage or involve employees in their transformation plans.

Data from polling firm Gallup indicates a staggering 87 per cent of employees worldwide are not engaged at work. While a separate survey released in February by McKinsey concluded that companies are no more successful at overhauling their performance and organisational health today than they were 10 years ago, with a particular blind spot deemed the failure to involve frontline employees and line managers.

The more recent MIT study of 700 C-level executives and finance, HR and IT managers from countries including the UAE found that a shared finance and HR cloud system was a critical component of successful transformation initiatives.

Nearly half (46 per cent) of HR and finance professionals said a full cloud deployment had significantly improved collaboration between departments with a similar percentage expecting a significant improvement in the next two years.

Combining enterprise resource planning (ERP) and human capital management (HCM) systems was also deemed to simplify tracking of employee costs for budgeting, with 37 of respondents indicating they used the cloud to improve data sharing between departments.

Elsewhere, 31 per cent of respondents said they spent less time doing manual work within their departments as a result of moving to the cloud and automation had freed up time to work on larger strategic priorities.

Based on these positive interactions, 35 per cent of participants in the survey indicated they planned to create a shared finance and HR function within a year, with 42 per cent citing improvements in productivity and performance as a key motivation.

“As finance and HR increasingly lead strategic organisational transformation, ROI comes not only with financial savings for the organisation, but also from the new insights and visibility into the business, HR and finance gain with the cloud,” says Dee Houchen, senior director ERP solutions at Oracle.

“People are at the heart of any company’s success and this is why we are seeing finance and HR executives lead cloud and transformation initiatives.”

However, as respondents to the survey admit, change does bring the requirement for new skills, with time management (40 per cent), active learning (32 per cent) and problem solving (30 per cent) deemed the most lacking.

There was also some indication of the changes taking place within departments as they seek to prepare their workforce for the future.

According to the survey, 43 per cent of respondents plan to bring IT workers into HR and finance to help take advantage of new technology and 42 per cent will provide management skills training to help employees break out of administrative responsibilities.

At organisations that had fully deployed the cloud, 46 per cent of finance and HR executives said their ability to reshape or resize the organisation had significantly improved, as did 47 per cent of C-level respondents. But technology did not necessarily mean good things for all employees.

While nearly 40 per cent of respondents said they planned to build their team’s data science and statistical analysis expertise, indicating job opportunities, 42 per said they planned to automate administrative and low-skilled roles meaning potential redundancies for some workers.

Clearly matching the challenges and opportunities of technology adoption will be a delicate balancing act as companies embrace an increasingly digital future.