The opportunities and challenges of a changing workforce
28 November 2018
The world of work is rapidly transforming, with technological advancements altering traditional perceptions, as well as the reality of how work is done and by whom.
This phenomenon is not just affecting businesses, but also wider society. Governments ought to respond to this paradigm shift in a timely and effective manner – indeed, the issue, and the ways governments respond to the future of work, are discussed regularly by G20 countries.
The main factors driving the change
The main drivers of workforce transformation are technological innovation and adaptation of technology. The traditional workforce is evolving as companies implement technological solutions such as artificial intelligence and cloud computing.
Today’s workers are more likely to be freelancers than permanent staff, and are both mobile and digitally savvy. Businesses are using things such as gamification and crowdsourcing to attract talent and gain a competitive advantage in an increasingly competitive world. On top of this, technology is opening up fresh avenues in the form of robots: McKinsey research shows that 50 per cent of all current work-related activities have the potential to be automated through the adoption of existing technology.
In essence, the talent pool has grown, allowing businesses to leverage different types of workforce models. According to Deloitte, 95 per cent of new employment in the United States between 2006 and 2015 involved such alternative work arrangements.
The challenge of creating a diverse and inclusive workforce
The growth of the continuum of talent has brought about a change in the diversity of the workplace. While multiple studies, including an early report by Credit Suisse, have shown the benefits and importance of diversity in the workplace, this is also posing a challenge that businesses have to deal with. Governments can play a crucial role in terms of managing and controlling the workforce and helping businesses to become more inclusive to overcome this challenge.
Not only is it important for public policy to respond to new work arrangements, such as freelancing and contract work, but attention must be paid to ensure all types of workers have social safety nets. Tax incentives can be a way to offset income uncertainty, and many countries are currently looking into policy solutions such as this one.
The power of quasi-formal employment
The shift from traditional careers and a single and stable workplace to quasi-formal work does have potential benefits. In an article titled “The opportunities of the changing workforce”, the World Economic Forum outlined how the evolving workplace can provide more autonomy and self-direction to workers. Automation can replace mundane and dangerous work, allowing human capital to flow towards creative and more enjoyable work. Contractual work has the potential to transfer agency from big, faceless corporations to individuals. This can all lead to improved productivity which, in turn, will boost the bottom line.
The best way to support this quasi-formal workforce is to invest in education. The worker of tomorrow needs to have a variety of skills, including strong soft skills. As a result, schools across the world are adopting new teaching strategies by implementing digital subjects and focusing on non-technical skills such as creative thinking. Countries such as Saudi Arabia are embarking on transformation programmes with a focus on education as a continuum, taking into account the private and public sectors, as well as the role of businesses in supporting education and training.
Tackling uneven adoption
One major hurdle to overcome is adoption. Technology and policies are in place that have the potential to help overcome the challenge. However, McKinsey research shows that adoption is still low and investment in these strategies is uneven. The report examined investment in AI and found the US to be the top investor, with $15billion to $23 billion, while Europe has invested roughly $3billion to $4 billion. Furthermore, in Raconteur’s Workplace 2020 report, the majority of UK businesses felt that the lack of response to these changing workplace needs is one of the biggest threats to success.
Businesses can play an important role in innovating and helping technology adoption. However, governments and transnational organisations can have a huge role in boosting adoption. Policy changes and initiatives can make it easier for business to follow.