This blog post about how the new world of work needs to make use of artificial intelligence and human creativity is courtesy of our German Workforce Institute Board Member Dr. Steffi Burkhart.

Für die deutsche Version dieses Posts, klicken Sie hier.

The speed of technological progress is already making some jobs of today redundant. In an academic paper presented at Oxford University in 2013 titled “The Future of Employment” authors Carl Benedikt Frey and Michael A. Osborne predicted that with a 70% probability, digitalization was putting around 47% of all industrial jobs in the U.S. in danger.[1] If we translated this for the German world of work, then 42% of our employees work in endangered jobs.[2] Digitalization on the other side is a process that’s been going on for years – advanced and constructed by human beings. Because it is people who are making digital technologies more and more intelligent. However, we still need to prepare for a new world (of work). Our driver: optimism instead of worry.

Machines take care of routines

Based on those numbers and the ongoing discussions in the media it is no surprise that employees are worried about being replaced by machines. What a lot of people are not aware of however, is that due to demographic changes we are going to experience a lack of manpower throughout the world until 2030 as the population grows older and there are not enough young people to fill the gap. Capital, technology and natural resources such as oil and gas are no longer the scarce and most valuable resources, today it is human capital as well as data and the real-time insights we generate from it.

The consequences are here today: the lack of people is slowing down performance, revenue and growth of organizations: the fact that there are 440,000 qualified workers missing in Germany is slowing down the country’s growth by 1 %, according to the Institute of the German Economy.[3]

60 % of today’s jobs include activities that could be done by computers or robots.

Computers are able to analyze standard-diseases much more accurately than doctors.[4] Lawyers can use machines to do their research.[5] And in the industrial area Bosch is a good example for increased automation: They planned 20,000 new jobs for their steering control plant. In order to ensure they can fulfill the increasing demand of the future they used a mix of automation and people. Bosch has increased their robotic personal from 0 in 2011 to 140 as of today. A lot of the hard work is now being done by intelligent machines.

Overall, we can save up to 20 % of our time for routine tasks with the help of digital technology. With this extra time, we can now (finally) work on special projects, add more human touch to our work and look into the real tough cases. The recent survey that the Workforce Institute conducted together with Coleman Parkes confirms: 82 % of all respondents worldwide do see situations where artificial intelligence, data science and analytics can improve their jobs.

Endangered jobs: Blue-Collar, White-Collar

This does not mean that we can just close the demographic gap on the labor market through robots however: digital change will lead to different and new jobs – and it will lead to a change in the required skill-sets.

The most critical way to prepare for change is therefore to re- train employees to improve their digital skills. What will drivers do for example once we have self-driving cars on our streets? We need to match our skills to what we need tomorrow. Businesses who are not considering this are not taking good care of their employees.

We need the digital experts

Because one of our most important areas for innovation in digital technologies is energy reduction and production, we need to make sure our workforce development strategy anticipates those needs. We need to have enough digital experts with the skills to develop the infrastructure of our internet further. It is no longer enough to digitize marketing or sales. Critical and new infrastructure needs to be invented, developed, programmed and controlled – by humans. We need new business models and entrepreneurial minds for new digital technologies like artificial intelligence, robotics, the internet of things, big data or 3D-print.

There is not sufficient talent available on the market. Supply and demand have a significant and growing mismatch. According to Bitkom there were 55,000 vacant jobs for IT-experts in Germany.[6] This means: not only the pool of workers overall is shrinking, the number of highly qualified and motivated talent is shrinking as well. SAP and Lidl seem to have experienced the lack of digital expertise in their latest project: 500 Million Euro spent, project dead, IT executive management gone. Lidl starts from scratch and is basing an important digital transformation project on a 30-year-old Software. We have yet to see how engaged the company can keep their digital talent.[7]

Who can do this?     

No one is more adept to the so called VUCA-reality[8] than those who were born into it; those who were brought-up digitally, have a collaborative mindset and think and live in networks. I’m talking about us, the digital natives – the millennials. Or like Jack Ma, CEO of Alibaba Group put it: “Pay attention to those who are 30 years old. They are the internet generation. They are the builders of the world”.

Our generation either founded companies like Facebook, Google, Wework, Airbnb or we are the biggest portion of their employees. Those “young” companies are already worth more than a lot of those from the old economy. Is that just a coincidence?

From digital “user” to digital “expert”

So, the mindset of a millennial is the foundation, but it needs to be trained. Very few people are being born as digital experts. A lot of us millennials are digital natives, but we are mostly users. We can use smartphones, tablets and laptops, we can build a WordPress site and we can digitize marketing – but that’s it. There is still a long way to go to become a digital expert. And there are more challenges along the way: Universities are not equipped for meeting those challenges. There are not enough courses, professors or teachers who cover topics like for example “deep learning”. And to get digital experts back to teach at universities is going to be almost impossible given the salaries that are offered.

A human capital question

We all know the most valuable brands of this world. That’s an outdated thought from the 80s and 90s. Companies should attribute value to their people instead. They do that already in the Silicon Valley: that’s why a company such as Airbnb is worth more than Hilton. It is more important to look at the digital scalability of a company’s products and services in connection to their employees. Analyzing machines in the end is leading us back to people. Human capital is the key for companies today.

By the way: While you are reading this article, tech giants like Amazon, Google and Facebook are working hard on recruiting digital experts to stay ahead of the competition. That war for talent leads to salaries between $300,000 – $500,000 USD for top talent from top universities.

So how do companies recruit digital talent? Normal advertisement (according to a survey from Stack Overflow among 100,000 developers from 183 countries) doesn’t do the trick anymore because IT-experts don’t actively apply for jobs. In some companies there are recruiting-experts who are specifically in charge of recruiting digital talent. Makes a lot of sense – if they themselves are fit for digital topics and know how to work with candidates in the digital world.

Once digital talent is actually successfully recruited the next question is: How do we retain this talent? How do we measure their satisfaction and engagement, in real time?

An important factor for this is the employee experience, which consists of a lot of different areas – the workplace, training possibilities, team set-up, management culture and transparency all are responsible for an employee’s satisfaction and engagement at work.

And machines are there to support because people analytics can help to uncover organizational blind spots. Analytic tools can help to identify certain behavioral patterns or sentiments that indicate signs of disengagement in real time, early enough so that organizations and HR departments have enough time to take corrective actions.

An important aspect: involve employees in this topic, show them what you do with their data and develop an ethical code of conduct around people analytics. Our survey showed that 29% of Germans are worried about the fact that their management could track and analyze every move at work through AI. An important question to ask is why employees are worried and how organizations can take that worry from them? Because overall, millennials are ready to provide data if they know that something good is being done with it!

Artificial and Human Intelligence

Shortage of manpower, digitalization and a skill mismatch have led to the “War for Talent” that McKinsey predicted 20 years ago. The scarce resource is no longer oil or money but talent, so the focus of every organization needs to be their human capital. Artificial intelligence can act as a supporting force, but digital change primarily means one thing: We need more human intelligence and more creativity to develop digital technologies and better products and services. That’s the only way we can create tomorrow’s world (of work).

[1] https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

[2] ftp://ftp.zew.de/pub/zew-docs/gutachten/Kurzexpertise_BMAS_ZEW2015.pdf

[3] https://www.handelsblatt.com/politik/deutschland/fehlende-fachkraefte-in-deutschland-fachkraeftemangel-verringert-wirtschaftswachstum-jaehrlich-um-fast-ein-prozent/

[4] http://www.faz.net/aktuell/wissen/medizin-ernaehrung/bildgebende-diagnostik-ersetzt-die-kuenstliche-intelligenz-bald-den-arzt-15531347.html

[5] Susskind, R. & Susskind, D. (2015). The Future of the Professions: How Technology Will Transform the Work of Experts. OUP Oxford.

[6] https://www.bitkom.org/Presse/Presseinformation/55000-Jobs-fuer-IT-Spezialisten-sind-unbesetzt.html

[7] https://www.handelsblatt.com/unternehmen/handel-konsumgueter/digitale-transformation-wie-sap-und-lidl-hunderte-millionen-euro-versenkt-haben/22850166.html

[8] Def.: “VUCA-World” is a formula developed at the US Army War College and stands for V= volatility, u = uncertainty, c = complexity, a = ambiguity

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