Osborne Clarke’s recent report on the future of work in the technology and digital business markets is based on interviews with senior figures at four leading companies – Accenture, Dyson, MetaPack and Siemens – and includes evidence from many others. The report explores four themes: growth of artificial intelligence (AI), use of contingent workers, skill shortages and the impact of millennials in the workplace.
How are companies embracing AI, robotics and automation?
The evidence is, not surprisingly, that technology and digital business companies are ramping up investment in automating processes. However, this is not just about using robotics and technology to automate production line processes – they are automating processes across their entire business. Companies are embracing a wide range of technologies to do so, from machine learning and AI to big data and virtual reality.
The jury is out on whether automation and robotics will lead to a net loss of jobs. It is certainly not inevitable in all businesses – Accenture, for example, has reduced more than 10,000 human roles through automation in the last year, but used this as an opportunity to move affected people up the value chain.
This evidence that humans are being liberated to focus on higher-value work will be reassuring to policymakers concerned about the impact of AI, robotics and automation on jobs. Governments are facing calls for increasing job protection, more statutory rights and retraining for affected people, and for taxes on the use of technologies to help manage the impact of job losses. It may, however, be impossible to protect certain jobs against automation, so retraining may be the key in many cases. The UK apprenticeship levy may be the start of wide-ranging legislation designed to make business provide people with skills. And this increased focus on training and skills may, alongside the investment in automation, help finally solve the UK's longstanding problem with low productivity.
How are contingent workers (including agency workers, contractors, consultants, zero hours and gig workers) being used?
The use of so-called ‘contingent workers’ is increasing at many companies; recent international surveys of large companies suggest contingent workers of one type or another could form 25 per cent of the workforce by 2020 (up from 14 per cent in 2014). In the technology and digital business sector, this often means groups of specialist consultants running short-term projects that implement innovative technologies or digital transformation. Large multinationals also rely on contingent workers if they need to launch a project in a new country quickly.
However, factors mitigate against the use of contingent workers in this sector. Employment law is seen by many as outdated. Companies want clarity about the status of contingent workers and are concerned about various new tax liabilities they may inherit when using them, following widespread publicity about alleged tax avoidance associated with some contingent workforce models.
But interviewees also seem worried about whether the growing use of contingent workers on short-term projects might compromise commercially or technologically sensitive information; they say they are becoming more careful about who they open up that information to.
Have skills shortages increased?
Attracting and retaining top talent is vital for digital and tech businesses. So it’s not surprising that there is real concern about the potential effect of tighter immigration controls, both here in the UK following Brexit, and internationally. Again, training and re-skilling will become key; businesses may respond through the use of apprenticeship subsidies and other training incentives.
How are millennials and post-millennials changing the workplace?
Many technology and digital businesses are exploring new working practices and initiatives that will cater for the increasing numbers of millennials and post-millennials entering the labour market. They realise that attracting and retaining these workers is key to ensuring a diverse workforce capable of securing and optimising future growth – which means greater flexibility in terms of working patterns, more variety in their roles, strong career development opportunities and more open plan, remote and agile working. All of this creates challenges in terms of how to manage people working in new ways.
The world of work is changing fast and businesses must keep abreast of the sweeping changes that the next few years will bring, ensure their voices are heard by policymakers and take specialist advice when necessary.
Kevin Barrow is a contingent workforce partner at Osborne Clarke