The world of work is changing around us in ways that will force us to rethink our views on employment and skills, according to Sigmar Recruitment chief operating officer and National Recruitment Federation president Frank Farrelly. But the changes won't necessarily be the ones we think will happen, nor will they come about as quickly as anticipated.
“There are lots of different drivers of change and there is lots of noise around in relation to it,” he says. “Predictions are quickly forgotten. Technologies that we think will make a big difference may not be adopted at all. Just because we can do something doesn’t mean that we will do it.”
He cites electric vehicle take-up as an example of this. “President Obama said there would be one million electric cars on US roads by 2015. There is only about half a million in the whole world. There were just too many barriers to overcome in terms of charging infrastructure, sunk costs for owners, and the inconvenience of having to stop for 20 minutes to charge up on a not particularly long journey.”
Farrelly’s point is that we should be careful with our predictions for technologies in their early years. “There is a thing called Amara’s Law which states that we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. A great example of this is GPS. It was developed by the US military in the 1970s and was almost cancelled in the 1980s but then it proved its worth during Operation Desert Storm in the first Gulf War. If that hadn’t happened, we wouldn’t have the likes of Google Maps, Uber, MyTaxi and other location-based services now.”
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In terms of the world of work, he believes the main drivers of change will be automation, machine learning, artificial intelligence, demographics, and economics. And not necessarily in that order and certainly not in isolation from each other.
He points to the rise of the middle classes in countries such as India and China and the demise of the middle class in the United States as examples of demographic mega-trends. “A lot of the jobs traditionally done by middle-class people in the US tended to involve routine physical work in manufacturing industry,” Farrelly notes. “This type of work can be easily and rapidly automated. Job growth in the US has continued but it’s been at the higher end and in the less well paid hospitality sector. And many of the people who lost their jobs in manufacturing didn’t want to swap across to the service side. This has led to a polarisation in the US and we can see the impact of that in many areas as well as in the world of work.”
This is an example of automation outstripping skills growth. “It’s almost going back to the Luddites and the fear of automation,” he points out. “But we need to be realistic. McKinsey has reported that potentially only about five per cent of jobs worldwide will be replaced by automation.”
Jobs will get better but only as long as we reskill
While five per cent is still a large number, Farrelly points out that many other jobs will be created at the same time. “What will happen is parts of jobs will be automated so jobs themselves will change. And that will allow us to focus on the more interesting and higher value parts of our jobs while the machine does the rest. Back in the 1990s, we had what we called 360-degree recruitment, where the recruiter did everything from sourcing the candidates, developing the business with the clients and so on. The technology does a lot of the routine work now and we are focused on the more interesting parts of the job – dealing with people, interviewing them and so on.”
But this places a requirement on people to acquire new skills. “You’ve got to be able to work with the machines and make the technology work for you for this to happen,” he points out. “This is why companies like Sigmar are investing between 15 and 20 per cent of gross profits each year on staff training. We need to future-proof ourselves.”
Farrelly believes the same commitment is required in every sector. “Jobs will get better but only as long as we reskill. That’s why things like Skillnets are so important. The speed of change is not that fast, and it is possible for us to keep pace with it in terms of skills.”
And some jobs are more open to automation than others. “A book restoration specialist in the National Library, for example, will probably never have to fear their job being replaced by technology. On the other hand, we have seen industries like insurance already being transformed. The underwriting department used to take up a whole floor of a building or more and now you might have just four people doing it and doing it better thanks to the technology.”
Changes like this mean we are going to have to alter our views and the way we think about education, work, and retirement. “People are going to work for much longer and the concept of retirement is going to change,” Farrelly says. “It won’t be the old life stages of unproductive in education, productive in our working years, and unproductive in retirement. It will be a case of educate, work, educate, work, educate, work and so on. We will all have to constantly educate ourselves so that we have the skills that the market wants.”
Who wants to do something that a machine can do? Why not go off and do more interesting work?
The nature of employment is going to change as well. “Look at the gig economy, for example. We are going to have to be a bit more flexible as a society in accommodating this. Work is being decoupled from jobs. America is leading the way on this, but I don’t think European society wants to go that far. There are benefits from it though, it’s happening and it’s here. We will have to stop thinking about work being a binary option – employed or self-employed – and move towards the concept of dependent contractor and other forms of employment. Legislation will have to catch up with this, as will the tax and social welfare systems.”
Education also needs to be addressed. “We need to rethink the education system as well,” Farrelly concludes. “If we get it right and we keep improving productivity we will continue to create new jobs and if people keep up education and skills training they will be able to move on and do better and more interesting jobs. Who wants to do something that a machine can do? Why not go off and do more interesting work? That’s why we are starting a new apprenticeship in recruitment in conjunction with the National College of Ireland in September. Don’t stand still, keep learning and embrace the robots.”