The Global Labor Trends Driving the Robot “Takeover”

While the phrase “future of work” is a buzzy phrase that means many things to many people, I see it as a transition point. Every couple of decades, there’s a whole new version of the future of work.

Take the Industrial Revolution in the 1700-1800s as a recent example. Workers went from creating goods painstakingly by hand to automating some of this through new manufacturing processes. Assembly lines were born and the roles of many workers shifted as a result.

Unlike the first Industrial Revolution, many HR pros and workers are panicked about this new future of work. Why would that be, if this is another iteration in an ongoing cycle? That’s because some of us can envision a distant future where humans may not need to work, thanks to advances in artificial intelligence (AI) and machine learning.

Some are also worried because the forthcoming transition could happen much quicker than in previous cycles. According to one study, the average company’s tenure on the S&P 500 has gone from 33 years in 1964 to a paltry 12 years by 2027. And in the next 10 years, robots could be completing the bulk of tasks that the current workforce is doing—and that’s a scary prospect to many people.

No, the robots aren’t taking over Terminator-style. But machine learning and AI technology could soon be smart enough to use varying degrees of judgment, making many human workers redundant. In fact, this has happened for centuries. Over the last 100 years, more than 90% of jobs that existed have already been replaced by automation. But instead of fewer people working, completely new industries have taken their place.

“In the next 10 years, robots could be completing the bulk of tasks that the current workforce is doing—and that’s a scary prospect to many people.”

For example, there’s already plenty of machinery on farms to plant seeds and harvest crops. However, AI could soon be smart enough to accurately predict the optimal time to plant seeds and the best time to harvest those crops. If this happens, this means the role of the human farmer will change even more.

The Macroeconomic Labor Trends Driving Us Forward

This shift didn’t appear out of nowhere. Here are some of the global labor trends driving this new future of work:

Changing Productivity and Populations

Because of advances in technology and automation, productivity has increased across the globe. According to data from work management platform Wrike, the median completion time for a typical project has decreased by about 50% since 2014.

As workers become more productive on a global scale, there’s a positive change that goes along with it. And as nations become more productive and acquire more wealth, the population evolves in other ways as well; for example, birth rates decrease in some nations and the average age of the population increases, driving changes to the availability of labor across the globe.

Changing Labor Sources

Older, wealthier populations spawn another factor that’s driving the new future of work: labor arbitrage. This process typically happens when companies in productive, wealthy nations go to other countries for cheaper labor in an attempt to cut their costs.

Knowledge-based economies need outsourced labor to get things done, and in the last decade or so, we’ve seen more U.S. companies outsource work such as manufacturing jobs to China and IT work to India. This has led to interesting shifts.  

In India, for example, what started with call centers grew to tech support and gradually became a powerhouse in IT. Not only has this lifted the country’s economy, but we see the beginnings of the demographic trends leading to lower birth rates. Additionally, as wages rise, local companies begin their own labor arbitrage to find cheaper labor. Some Chinese companies are now outsourcing labor to places like Vietnam.

Robotics is the new labor arbitrage, which may lead to humans being displaced by organizations as more work is automated. As the previous cycle of labor arbitrage has shown, the impact of outsourcing work goes beyond the four walls of the workplace, and we must be prepared for these shifts as a result of moving towards more AI and autonomous technologies.

As workers become more productive on a global scale, there’s a positive change that goes along with it.

Changing Worker Needs

The rapid pace of innovation and the changes in the buyer-seller relationship has led many companies to require a completely different kind of employee.

Many industries have focused on encouraging workers to focus on science, technology, engineering, and math (STEM) majors—but realistically, the TEM portion of that acronym are more likely to be replaced by smart automation. These are all tasks that robots are already good at, or will be, as technology continues to advance.

We’re already on the edge of this reality. According to a report from McKinsey, about 60% of occupations could have at least 30% or more of their tasks totally automated in the coming years. Soon programmers will become “Technology Designers” and robots will do 80% of the coding work for them.

To help future-proof your workforce, instead of hiring STEM majors, I recommend that organizations hire people with liberal arts degrees such as journalists. They’re lifetime learners who are great at researching, curating information, solving problems effectively, and most important of all, they’re curious. Curiosity is an integral human quality that robots can’t replicate (yet) and will help prepare workers for this new future of work.

Changing Supply and Demand Patterns

Because of cheaper and faster manufacturing processes, the dynamics of supply and demand patterns have also shifted. Consumer tastes change more often and companies can supply a steady stream of new products to meet those ever-evolving demands.

For example, the ubiquitous fidget spinner couldn’t have been an overnight product success even 20 years ago. The pace of innovation has increased—it’s now possible to ideate, create, and sell a product to a large population far faster than ever before.

Changing Buyer and Seller Behavior

As the accessibility to technology has increased, the way that buyers and sellers interact has shifted dramatically as a result.

Consumers spend more time shopping online and using digital services than ever before. For example, the convenience of e-commerce has threatened brick-and-mortar businesses—after all, e-commerce purchases are expected to make up 11.1% of all retail sales in the U.S. in 2019.

That’s why bookseller chain Barnes & Noble is under major financial strains. And also why video rental chain Blockbuster was replaced by online streaming services like Netflix.

Curiosity is an integral human quality that robots can’t replicate (yet) and will help prepare workers for this new future of work.

Finding Solutions for the New Future of Work

The good news is that there’s no need to panic—we aren’t staring down a future with a completely bionic workforce. There are two key factors to keep in mind when considering the future of work:

  • Robots aren’t great at everything. A robot isn’t going to replace every human worker because they’re only an effective solution for highly repetitive activities with often very strict parameters.
  • Human workers are great at…being human. While there may be a point in the future where AI can exercise judgment, human workers still reign supreme at being creative, collaborative, and curious.

With these global labor trends in mind, HR pros and their organizations can better prepare for this forthcoming evolution. And while robotics and intelligent automation are accelerating us into this new future of work, the future still belongs to human skills such as creativity, collaboration, compassion, and critical thinking.

Author Photo
Wes is currently the Vice President, Advisory Services for Visier. A much sought-after industry expert, he helps organizations use insights to better execute on their workforce and people strategies. He is a Human Capital leader and strategist, who transforms organizations for the rapidly changing workforce of the future. He is an early adaptor of HR robotics and is skilled in delivering evidence-based business, human resources and operational outcomes grounded in data analysis and insights. Until 2018, Wes was a Partner in the Ernst & Young (EY) Americas Advisory Services practice in the West Region. In this role, he helped develop and launch EY’s Future of Work offering and served as market leader to educate and deploy Future of Work strategies for clients. In addition, he created the region’s HR robotics service offering and helped leading employers deploy HR Robotics Process Automation.