Digital transformation and other megatrends impacting Australia’s workforce

CSIRO has identified how digital transformation along with five other megatrends will transform the labour market over the next two decades 

In 2016, the CSIRO’s Data61 Strategic Insights team released the Tomorrow’s digitally enabled workforce report. In collaboration with partners such as ACS (the Australian ICT sector’s peak body), ANZ and the Department of Employment, the Strategic Insights team mapped out “plausible scenarios for jobs and employment markets”.

The following six megatrends were identified:

  1. The second half of the chessboard: Digital transformation in areas such as AI, computing speed and data volumes are allowing many tasks to be automated
  2. Porous boundaries: These advances are transforming employment markets and employment structures
  3. The era of the entrepreneur: More fluid working arrangements and the increasing ease of launching and scaling businesses is favouring those with entrepreneurial mindsets
  4. Divergent demographics: Workforces are getting older and more female
  5. The rising bar: Workers need more credentials for entry-level positions
  6. Tangible intangibles: Most jobs are now being created in the service sector

Interestingly, Mercer’s 2018 ‘Thriving in an Age of Disruption’ report identifies similar trends and notes how organisations are adapting to them by, for example, rolling out “future-focused” people strategies and adopting “lab mindsets”.

None of the trends identified by Mercer and the CSIRO will be news to those in HR. But as Dr Claire Naughtin, a member of the Strategic Insights team, explained at a Mercer HR Leaders Forum, workers and employers are yet to grasp the nettle when it comes to responding accordingly.

This isn’t business as usual

Digital transformation and organisational change is nothing new, so why all the fuss about ‘the future of work’ now?

“The key thing that’s different about now is that we’re living in an information revolution,” Naughtin observes. “We have immense connectivity, which allows us to connect and communicate across borders.” As a result, the labour market is becoming “increasingly global and increasingly competitive”.

Automation is a big deal, except when it isn’t

Naughtin suggests a much-referenced study predicting about 47 per cent of jobs would be automated “reflects the extreme end of the spectrum”. A more recent (2017) OECD report argued that digital transformation would result in only nine per cent of jobs becoming automated.

In any event, headline figures aren’t much use given automation will be unevenly distributed. Using the example of photographers and photographic developers/printers, Naughtin argues that while straightforward, routine tasks will continue to be automated those doing work that requires “complex problem solving, creativity and the ability to think in ambiguous situations and exercise emotional intelligence” will be assisted rather than replaced by technology.

As a result of digital transformation, few Australians have a job developing film anymore, however, the number of them working as photographers tripled between 1992-2016. Naughtin notes today’s photographers use technology such as digital cameras and drones. The reason they haven’t been displaced by technology is because “the complexity of their work still requires the human element”.

The economy is being progressively gigified 

It’s long been believed large organisations are the most efficient way to structure labour. But, as Naughtin notes, “Perhaps the platforms we [now] have available are a more efficient way of connecting buyers and sellers, of connecting workers with the work being available.”

While it’s difficult sourcing timely, comprehensive data about the prevalence of new employment models, Naughtin notes the growing number of workers reporting being employed on a freelance basis, the popularity of gig-economy platforms such as Freelancer (it surpassed 25 million users in 2017), the flowering of co-working spaces and the mass penetration of platforms such as Uber suggests things are moving fast.

Naughtin also notes that digital-economy behemoths are spending vast amounts on R&D. This will further accelerate their disruptive impact. (Amazon spent US$22.6 billion on R&D last year, not much less than what all Australian businesses combined spent.)

We all need to lift our game

Lots of academics, executives and politicians enjoy pontificating about digital transformation. Far fewer are making sensible preparations for it. Naughtin observes that while employers are crying out for graduates with STEM skills, the majority of Australia’s university students continue to pursue arts or management/commerce degrees. (Many likely decided on which degree to pursue having been presented with little information about the current – and probable future – state of the labour market.)

With retirement ages being pushed back and workers of all ages needing to regularly upskill and reskill, lifelong learning is more important than ever. Nonetheless, few employees or employers do more than pay it lip service.

Workers need to adopt more entrepreneurial mindsets, yet most still aspire to a steady, long-term job. Governments and employers need to encourage Australians to be more flexible, innovative and entrepreneurial. But they haven’t yet created the support structures and services that allow people to feel supported while navigating a more insecure, unstable work environment.

Given all of the above, what can those in the people-management business look forward to?

“As HR specialists it will be increasingly important for you and your organisations to assist workers in adapting to the changes that they see in their roles and providing training and education opportunities to navigate the emerging spaces,” says Naughtin.