The world of work is changing. Artificial intelligence and automation will make this shift as significant as the mechanization in prior generations of agriculture and manufacturing. While some jobs will be lost, and many others created, almost all will change.
Reports point out that while the pace of technology adoption is expected to remain unabated and may accelerate in some areas, Automation, in tandem with the COVID-19 recession, is creating a ‘double-disruption’ scenario for workers. Although the number of jobs destroyed will be surpassed by the number of ‘jobs of tomorrow’ created, in contrast to previous years, job creation is slowing while job destruction accelerates.
Are the changes permanent?
In fact, experts go to the length of acknowledging that the future of work has already arrived for a large majority of the online white-collar workforce. However, it is equally important to understand, and accordingly invest, in what form temporary changes whereas what as more of permanent in nature.
Permanent changes to the day-to-day work: The COVID-19 crisis did accelerate the adoption of trends once deemed as the longer-term future of work. Investments in digital and automation transformations, considered too ambitious before the pandemic, suddenly became key to survival. These plans are now seen as vital lifelines to sustained competitive advantage or sustenance.
New types of work: The pandemic also ushered in the emergence of new ways of generating capital and doing work. These are organization-specific changes that have transformed the organizational outlook to work and generating value. This is a larger trend that has not yet materialized as a temporary or permanent change. Take, for instance, the ”tele-everything” trend of broad adoption of remote processes. This trend, however, goes beyond just the increase in remote processes and into rethinking how tasks can be performed more efficiently with the use of technology. The explosion in telemedicine, virtual schooling and learning, and e-commerce are pushing the thinking on how money can be made, and how work can be completed beyond business as usual and into the creative.
Additionally, some organizations are rethinking their very definition of value generation, moving away from an exclusive shareholder lens toward considering a broader group of stakeholders that includes society and the environment. We’ve seen a renewed push for strong alignment among a company’s purpose; environmental, social, and governance (ESG) issues; and how money is made.
Before COVID-19, the largest disruptions to work involved new technologies and growing trade links. COVID-19 has, for the first time, elevated the importance of the physical dimension of work. This offers a different view of work than traditional sector definitions. For example medical care arena gives an interesting insight. Here only caregiving roles require close interaction with patients, such as doctors and nurses. Hospital and medical office administrative staff fall into the computer-based office work arena, where more work can be done remotely. Lab technicians and pharmacists work in the indoor production work arena because those jobs require use of specialized equipment on-site but have little exposure to other people.
Hybrid is the new normal
Perhaps the most obvious impact of COVID-19 on the labor force is the dramatic increase in employees working remotely.
The on-site customer interaction arena includes frontline workers who interact with customers in retail stores, banks, and post offices, among other places. Work in this arena is defined by frequent interaction with strangers and requires on-site presence. Some work in this arena migrated to e-commerce and other digital transactions, a behavioral change that is likely to stick.
The leisure and travel arena is home to customer-facing workers in hotels, restaurants, airports, and entertainment venues. Workers in this arena interact daily with crowds of new people. COVID-19 forced most of these to operate on a severely limited basis. In the longer term, the shift to remote work and related reduction in business travel, as well as automation of some occupations, such as food service roles, may curtail labor demand in this arena.
The computer-based office work arena includes offices of all sizes and administrative workspaces in hospitals, courts, and factories. Work in this arena requires only moderate physical proximity to others and a moderate number of human interactions. This is the largest arena in advanced economies, accounting for roughly one-third of employment. Nearly all potential remote work is within this arena.
The outdoor production and maintenance arena includes construction sites, farms, residential and commercial grounds, and other outdoor spaces. COVID-19 had little impact here as work in this arena requires low proximity and few interactions with others and takes place fully outdoors. This is the largest arena in China and India, accounting for 35 to 55 percent of their workforces.
Remote work may also put a dent in business travel as its extensive use of videoconferencing during the pandemic has ushered in a new acceptance of virtual meetings and other aspects of work. While leisure travel and tourism are likely to rebound after the crisis, McKinsey’s travel practice estimates that about 20 percent of business travel, the most lucrative segment for airlines, may not return. This would have significant knock-on effects on employment in commercial aerospace, airports, hospitality, and food service. E-commerce and other virtual transactions are booming. Many consumers discovered the convenience of e-commerce and other online activities during the pandemic. In 2020, the share of e-commerce grew at two to five times the rate before COVID-19. Roughly three-quarters of people using digital channels for the first time during the pandemic say they will continue using them when things return to “normal,” according to McKinsey Consumer Pulse surveys conducted around the world.
Future of Work is disruptive
Considering only remote work that can be done without a loss of productivity, experts find that about 20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week. This represents four to five times more remote work than before the pandemic and could prompt a large change in the geography of work, as individuals and companies shift out of large cities into suburbs and small cities. Some companies are already shifting to flexible workspaces after positive experiences with remote work during the pandemic, a move that will reduce the overall space they need and bring fewer workers into offices each day.
One thing is beyond doubt: The future of work has arrived! We, at Vision College of Management, prepare our students for this inevitable future by incorporating various skills along with management education.