Key takeaways

  • Machine learning, robotic process automation and cognitive computing threaten to change how businesses work and where they get their talent.
  • People management will need to change to encompass the new reality of a geographically dispersed and demographically diverse workforce.
  • Leadership will need to shift from observing and overseeing to empowering and enabling employees.

Disruption is the new norm. Whether it’s a new market disruption like automated vehicles or the augmentation of roles such as virtual assistants, we see it every day. Organisations are experiencing unprecedented levels of change driven by technology, connectedness, globalisation, volatile economies, and shifting employee and consumer demand.

The impact of these changes will be significant on an organisation’s operations and its workforce. Businesses can either embrace the change or be changed by these external drivers. Organisations that fail to adjust their workforces to match their strategy choices risk missing out on the skills and capabilities they need to succeed in a highly competitive market.

The rise of
digital labour

Rapidly emerging technologies are generating a huge paradigm shift that will affect most, if not all, industries. We believe there are three key digital labour models that will transform the future labour market:

  • Robotic Process Automation (RPA): Involves automating rules-based and routine tasks, which has already had a significant impact on jobs. According to some estimates, almost half of the jobs lost in the United States over the last twenty years have gone because they were replaced by RPA, which will only continue. While it’s difficult to predict the rate at which RPA will replace human workers, we estimate that up to one-quarter of workflows in all industries will be taken over by RPA in the next 3 years.1
  • Machine learning: Refers to the ability of machines to execute tasks and solve problems in ways normally attributed to humans. In our recent report on the three waves of automation, we expect 2-3% of jobs will be affected by automation in the first wave. In the second, “augmentation” wave, which lasts until the late 2020s, the figure rises steeply to 20% with further advances in developments such as aerial drones, robots in warehouses and semi-autonomous vehicles. Finally, the third “autonomy” wave will see 30% of jobs directly impacted with the ability for machines to analyse data, make decisions, and take physical actions with little or no human input.2
  • Cognitive computing: Refers to computers that are designed to simulate the human brain by identifying patterns and relationships which then dictate outputs and therefore make decisions without the need for human input.

Many jobs will be reconfigured and redesigned, causing job dislocations and requiring employees to learn new skills. The degree of transformation will be shaped by the extent to which automation can replicate task characteristics such as making cognitive judgments. This will likely lead to a ‘hollowing out’ of middle-income jobs that will be replaced by cognitive platforms. Jobs affected will include medical, legal and finance professionals. However, where there is displacement there is also opportunity. Automation will replace routine tasks that will provide greater capacity for humans to undertake higher value work, as well as reduce user error with greater algorithmic accuracy.

Similarly, our research shows global GDP could increase by 14% to 2030 as a result of AI – the equivalent of  an additional $15.7 trillion – making it the biggest commercial opportunity in today’s fast changing economy. The greatest gains will be in retail, financial services and healthcare as AI increases productivity, product quality and consumption.

The impact
on skills

The employment landscape of the future will present a major shift in the kinds of skills and industries that are present today, which will impact the talent required to perform jobs. In our most recent CEO survey, 79% of Australian CEO’s have concerns around the availability of key skills. The rising concern regarding the availability of key skills comes as many organisations prepare for automation and look to improve the experiences of their customers via new technologies.

By 2020, the World Economic Forum forecasts that over one-third of skills that are considered important in today’s workforce will have changed. Increased value will be placed on cognitive flexibility and problem solving. Technological advancement and automation will require new skills in managing digital labour and a hybrid workforce.

Collaboration is vital to this effort. Governments, businesses and communities need to work together in pioneering new approaches to education and training, and in matching talent with opportunity in the fields that will matter in a technology-enabled job market.

The leaders
we need

The future workforce will be more virtual and geographically and demographically diverse. Managing will therefore be about outcomes and deliverables rather than on observation and presence. Leaders of the future will subsequently play a key role in identifying and optimising business outcomes through a hybrid of repurposing talent and technology, while supporting the diverse needs from the five generations that will coexist in the workforce.

Further, leadership will likely shift away from the standard formal management relationships to more situational (project-based) leadership as needed. This will need to consider an increase in part-time and contract workers.

Leaders will also play a critical role in supporting and navigating employees through the ambiguity and transformation towards the new world of work. Organisations will be looking towards their leaders to:

  • role model behaviours, empowering employees and providing autonomy, aligning organisational strategies to team goals and individual efforts, displaying trust, and actively demonstrating a commitment to continuous improvement;
  • display digital leadership through embracing augmentation;
  • communicate a clear and compelling vision, and supporting employees to deliver against fluid objectives; and
  • act as catalysts who show direction and set up the appropriate systems to enable employees to do their jobs efficiently and effectively.

Managing
the workforce

Organisations will need to be cognisant of the trends changing the function and nature of work, and adapt their people practices accordingly. Some of the critical shifts in workforce management that will be required to support the workforce of the future include:

  • Systematically looking at current operational processes to identify digital labour potential and subsequent people implications.
  • Developing digital literacy capability across the workforce and build the skills required to advance digital labour opportunities, while developing softer skills and human capabilities that complement technology and enhance the customer experience.
  • Driving a culture and program of self-directed learning focused on developing generalist rather than specialist capabilities and supporting attributes.
  • Supporting leaders to manage geographically dispersed, highly fluid, and hybrid teams that leverage appropriate pools of labour.

The ideal workforce will vary from one organisation to another but achieving the right mix of humans and machines will mean the difference between success and failure.

Where to
from here?

We are seeing more and more jobs reconfigured and redesigned, shaped by the extent that automation can replace task characteristics. We will increasingly see the emergence of new jobs, with various experts agreeing that more than half of the jobs that will exist in 2030 do not exist today.3

In embracing the technological revolution, it will be critical that organisations engage in workforce planning. This will see a greater focus on scenario planning to ensure flexibility in forecasting workforce demand and associated skills needs in an environment of ambiguity and uncertainty.

 


To start a conversation or find out how we balance business understanding with technology innovation and human insight, visit the Intelligent Digital website.

 

Digital Pulse: Ben Neal

Contributor

Ben Neal

Ben is a partner in People and Organisation consulting at PwC Australia.

More About Ben Neal
Digital Pulse: Sara Caplan

Contributor

Sara Caplan

Sara is a partner in PwC Australia’s Business and Performance consulting practice and CEO of PwC’s Skills for Australia.

More About Sara Caplan