The View

The new world of work

Despite some worrying trends, jobs could become more rewarding and stimulating as companies compete to attract and retain talented workers.

The office day can occasionally seem endless. But for an increasing number of people, it’s not just another meeting making it feel that way. In many Western European countries the frequency of individuals working ‘extreme hours’ of more than 50 hours per week has increased substantially, particularly among high skilled male workers, according to research by Anna Burger at the Central European University in Budapest.

People are also increasingly working at unconventional times: 21% of workers now regularly work in shifts rather than a regular 9-5 day and 30% work on Sundays, according to the European Foundation for the Improvement of Living and Working Conditions.

New technology also means many of us are constantly connected to the office. Some employees are expected to respond to e-mails even when on holiday: increasingly people don’t have any real downtime.

Meanwhile, in many countries, self-employment is growing. In the UK, which leads this trend in Europe, 40% of new jobs created in the four years to 2015 were by people working for themselves, according to the Institute for Public Policy Research. Of course, self-employment offers great opportunities; but unscrupulous companies may also be pushing employees into self-employment simply to cut their tax bills and avoid having to pay sick pay and other benefits.

Some of these developments appear to be making us sick. The European Foundation for the Improvement of Living and Working Conditions reports that 22% of workers suffer from stress and associated complaints such as back ache, muscular pain and fatigue. And work satisfaction is low: 57% of workers think that their working conditions deteriorated in the five years to 2014, according to a Eurobarometer survey for the European Commission. A report for ING by professor Noreena Hertz indicates that young people are anxious: 72% of 18-24 year olds in Europe believe that their financial future is more uncertain than previous generations.

Some fear that these problems will only get worse. New business models like Uber are taking hold in many industries, replacing previously stable occupations with precarious ‘gig economy’ jobs with no security, career path or benefits such as pensions. In the more distant future, people might have to work longer hours or for less reward as they compete with robots and artificial intelligence: the World Bank predicts that automation and other innovative technology could eliminate 57% of jobs in rich countries.

A bright future?

While it seems like there’s a lot to be pessimistic about, there are also positive developments in the world of work.

Firstly, technology is creating new opportunities. Freelancing sites such as Upwork and Amazon’s Mechanical Turk marketplace give people access to opportunities to earn an income at a pace and time that suits them. Uber and the many delivery firms that have sprung up offer a flexible route into work that previously never existed; and Etsy offers people a way to make a living from their craft hobbies.

Secondly, the structure of companies is also evolving, bringing new ways to achieve career goals, according to Cathy Benko, vice-chairman at Deloitte and co-author of The Corporate Lattice. Benko says that companies have adopted flatter management structures over the past 25 years and, as a result, now operate less like a hierarchical ladder and more like a lattice. This should provide “more opportunity and more possibilities to be successful,” according to Benko. “In the lattice organisation you can find growth by doing different roles, so you have new experiences, you acquire new skills, you tap into new networks.”

Thirdly, companies are likely to change their approach to employee development programmes as people stay in the workforce for longer, according to Bruce Nolop, former CFO of online broker E*Trade. “Teaching new tricks will help the workforce keep up with new technologies and redesigned processes,” he says.The opportunity to learn new skills could mean people are less bored by their work in the future.

Workplace of the future

For those with particular talents, the outlook could be even better. Around 60% of all new jobs in the early 21st century will require mathematics and science skills that only 20% of the current workforce possesses, according to the US Department of Education. Individuals with those capabilities will be in hot demand.

“Organisations will need to adopt their whole well-being approach, including their benefits packages, in response to these changes,” says Peter O’Donnell, CEO of employee benefits provider Unun. “The workplace of the future is going to be increasingly people-centric and organisations competing for talent will need to respond by being more supportive of their staff than ever before.”

At a basic level, companies might try to support employees by helping to “make running a household easy for both women and men, [by providing] dry-cleaning on premises, meals to take home, or more sophisticated things we haven't thought of yet,” says Rosabeth Moss Kanter, professor at Harvard Business School.

Companies eager to hire and retain talented people – often in the tech sector – are also likely to experiment with new workplace models. Daniele Fiandaca, co-founder of Creative Social, a club for creative and brand leaders, says that “culture hacking” or “the systematic design and implementation of team practices, commitments, and viewpoints to help improve culture” is becoming more prevalent.

For example, Netflix offers unlimited holiday entitlement, clothing retailer Zappos (owned by Amazon) offers new employees a $1,000 bonus to quit (to ensure commitment), while everyone at cleaning product company Method, including the CEO, must work on reception one day a year to keep people grounded. One company in San Francisco, Gravity Payments, has even introduced a $70,000 minimum wage to improve morale and productivity.

As well as implementing quirky ideas, some companies are experimenting with fundamental changes to work routines. In August 2016, Amazon announced a 30-hour work week pilot for technical employees, who will be paid the same pro rata but get the full benefits of traditional 40-hour workers. “We want to create a work environment that is tailored to a reduced schedule and still fosters success and career growth,” says Jeffrey Bezos, CEO at Amazon, who notes that “the traditional full-time schedule may not be a 'one size fits all' model.”

Many large employers, such as consultancies and especially in the public sector, already offer flexible working. Some organisations are considering other work schedule changes. The Swedish city of Gothenburg recently completed a two-year pilot of a six-hour working day at an elderly care home, hoping to understand the impact on workers’ quality of life. Preliminary results were positive with sick leave falling by 10% and workers reporting lower stress and increased alertness, although staffing costs increased by 22% during the trial.

Focusing on motivation

The pressure to hire talent in the future is likely to spur further creative thinking about what motivates people to work and how greater job satisfaction can improve productivity. The answers might be unexpected.

“Increasing payment seems to improve productivity only when the task at hand is very algorithmic,” says Nathalie Spencer, behavioural scientist at ING Wholesale Banking. “For example, if A, then do B and C. These also tend to be the types of jobs that are most easily automated. But when you need any degree of flexibility and creative thinking, research shows that other things matter too.”

Spencer highlights the work of author Dan Pink who explains that once people are paid a reasonable amount, it is more important to create conditions where workers can find purpose (is it fulfilling and meaningful), autonomy (can it be done without micro-management), and mastery (can skills be developed and perfected) in their jobs. “These three factors seem to be the key ingredients for boosting productivity,” says Spencer.

Similarly, people often erroneously believe that they care mainly about salaries and promotions. But once they are in a job they tend to value many different aspects of employment, including how much fun they have and what colleagues are like, notes Spencer, drawing on recent behavioural science research by Fischbach and Woolley.

Such insights could inform companies’ employment practices in the future. The world of work faces many challenges: the ‘gig economy’ and automation are real threats to workers’ wellbeing. However, the hope must be that the increasing attention focused on why we work, and the slew of creative ideas designed to attract and retain employees, are part of an emerging broader consideration of the nature and role of employment. If they are, then we may all have a chance to enjoy a more balanced, satisfying work life while companies will be able to access the talent they need.

Universal basis income: security, simplicity and freedom

Flexible working and unlimited holidays may be on offer for those with in-demand skills but if technological innovation does “hollow out” the middle class, as Martin Ford, author of Rise of the Robots, believes is possible, what will happen to everyone else?

One possible solution is a universal basic income (UBI) provided by government to every citizen – without means testing or any need to work. The rationale for a UBI is that it should reduce inequality and prevent social disorder should automation result in large scale unemployment or under-employment. Moreover, it will also help individuals who will gain greater security compared to traditional out of work benefits, which are often limited in duration or means-tested. “The benefits are enormous,” says Anthony Painter, direct of policy and strategy at the UK’s Royal Society for the encouragement of Arts, Manufactures and Commerce, who summarises them as: “security, simplicity and freedom.”

Painter’s report, co-authored with Chris Thoung, notes that a UBI would prove advantageous as developed world societies age. “Whether funded by state resources or through voluntary care that families and communities provide, the caring economy will expand. A basic income would help people care for their relatives, friends and neighbours without having to account for their actions to the state.”

A UBI could be hugely costly. However, as the economy is restructured as a result of technological innovation, some experts believe it will become not only viable but essential. Moreover, as Tim O'Reilly, CEO of O'Reilly Media notes, the possible productivity gains from technology are so great that they will reduce the cost of goods. “What costs $35,000 today might cost $3,500 in a future where the machines have put so many people out of work that a UBI is required,” he explains. In other words, UBI could cost less than expected in the long term.

Already trials are underway. In January, Finland began paying a basic monthly income of €560 a month (compared to an average private sector income in Finland of €3,500 per month) to 2,000 randomly selected unemployed citizens. The two-year trial will assess the extent to which it changes people’s behaviour in relation to job seeking, alleviates poverty and reduces government bureaucracy. Cities in the Netherlands and Italy also have trials underway. Two councils in Scotland also have pilot programmes planned for later this year and in February India announced that it is considering a UBI.

Should UBI become a reality in the coming years, the future of work – and therefore society – could be very different. Indeed, with no need to work for an income, people could be free to concentrate on their passions and interests – potentially unleashing a wave of creativity that might ultimately stimulate economic growth.

List of references: