“What lies between most people and destitution is their job”
Satyajit Das Financial Commentator
Most working Australians families including the tax office have relied on regular salaried incomes. This however is unlikely to be the primary employment model in the future. Instead many workers will be “off balance” sheet. They will be self-employed, contract labour or outsourced.
The future of work is more about flexibility and reducing costs. It has been turbo charged by technology and globalisation. There is no going back.
In Australia, there is already a significant reduction in full time employment and increasing trends towards flexible employment options. This is already resulting in Underemployment one of Australian’s most growing workforce concerns.
Have you heard of “dollar ready”? I recently engaged in a conversation with a business person and he said that their organisation was not employing people who were not “dollar ready”. They would employ skilled people from overseas rather than employ juniors or graduates, because they did not provide the dollars on day one. In other words, “dollar ready”.
This attitude is not shared by all but it is powerful language that makes you sit up and take notice. Complacency is not an option considering current trends.
- Youth unemployment is 13.3% and one in five are underemployed. Competition for jobs is intense.
- Graduate employment is the lowest it’s been since the 1992-93 recession.
- Apprenticeship numbers have declined since 2010.
Have you heard of the term being “dollar ready”? I recently engaged in a conversation with a business person and he said that their organisation was not employing people who were not “dollar ready”. They would employ skilled people from overseas rather than employ juniors or graduates, because they did not provide the dollars on day one.
This attitude is not shared by all businesses; however, the term “dollar ready” is evocative language. It does make you sit up and take notice, especially when you are aware of the youth unemployment trends in Australia.
What are they telling us about employment?
The new term coined for the unprecedented wave of job destruction and job recreation, is called the “great disruption”. Over eighty percent of the Australian population have not yet been affected, so their level of consciousness about the implications of a significant employment disruption, is only a vague possibility.
However, many people who are creating the technologies are acutely aware of how potential job losses may affect their customers. One example is Silicon Valley. They are doing their own research project called the “YCombinator”. This is investigating how to provide people with an income if they are unemployed.
“Sam Altman, the head of YCombinator, is so convinced that we’re going to need to figure out new ways of providing people with a means to live that he’s giving ~$20k each to 1,000 people in Oakland for a year just to see what they do with their new jobless income”. data
Lack of employment opportunities, is one of the most significant problems our society faces. It is not about just having a job; it is about having enough work, that pays enough money, to keep Australian citizens financially secure.
The record high underemployment rates, record low wage growth and continued reduction in full time jobs are worrying trends, influenced by the technological revolution.
The signals have been there but our business and political leaders have not heeded the warning signs. Both groups appear to be blindsided by short termism or ignorance. It is not being alarmist or pessimistic. It is facing up to the fact of an emerging problem.
As John McCarthy, the inventor of artificial intelligence said:
Articulating the problem is half the solution.
Humans can disassociate. It is a powerful psychological mechanism that can help or hinder the human condition depending on the circumstances. One of the troubling trends in our society is that many leaders are dissociating from the consequences of their decisions on employees and society?
It is helping drive businesses to look at short term gain and not the long term. People fall by the way side. It is not the whole story; however, it is part of the story that needs to be understood.
Let me explain by way of analogy.
I always remember a tale that was told to me about Bessie the cow.
Bessie was a little calf that had lost her mother. She was brought up in the families’ back yard and had been hand fed by the farmer and his family.
When Bessie got too large for the backyard, she went out into the field with the rest of the herd. No one would consider ever killing Bessie.
Then one day the farm was sold and a new owner arrived.
Bessie no longer had a name. She was just a cow in the herd …classified as a return on investment (ROI.) How easy was it now for the new farmer to kill Bessie?
There are over three billion people in the global workforce. Of those jobs, it is anticipated that over 40 to 50% percent will disappear within a few years. Either blind-sided or blinded by the allure of what technology can offer, governments and businesses have to date, showed few initiatives, to ensure the future employment of its employees and citizens. Quite the reverse.
Many sectors are financially benefiting from outsourcing of labour overseas and introducing labour saving technology. This includes not only call centre work but the wealthy professions like law and accounting. They are retrenching staff and reducing graduate intakes, as they progressively outsource work overseas and invest in employment saving technologies. The consequence is per research conducted by the World Economic forum in 2016 is:
For every professional male job that is created, three male jobs will be lost.
For every professional female job that is created, five female jobs will be lost.
Why is developing confidence in people a strategic advantage for businesses of the future.
The future of work is focused on technology and the importance of people being capable of being innovative and entrepreneurial. According to discussions at Davos in 2017:
For the modern worker, flexible work places have been promoted as the holy grail for work life balance. For many this is correct. Flexible work places have assisted employees arrange their lives in a way that is mutually beneficial for themselves, their families and their employer.
For a growing number of others, this is not correct. People are starting to realise that the consequences and expectations of flexible work arrangements is darkening their lives. The long shadow is primarily accessibility.
We give you flexibility, you give us access to your life.
A type of ill-considered Faustian bargain
Conscious capitalism. The business model of the future.
The world is on the cusp of the biggest employment disrupter it has ever known. It has been brought about by the technological revolution and will be accelerated with the world of robotics and artificial intelligence.
The old model of business primarily driven by short term thinking, short term shareholder value, and short term management remuneration systems is not sustainable. The acute focus on reducing labour costs, the largest expense for most businesses, will not create enough jobs to sustain the working population.
With the dawn of the technological revolution, a new model of doing business needs to be created which must include societal value. What is the alternative?