Over the past year or so I have been working with the team at Sanscubicle (launching later this month) on a concept that explores the future of work in India. During this time there have been many debates on what the future of work could look like.
2020 gave us an accelerated look at what work might look like, but what will it look like in 2021 and beyond? Following are some of my thoughts.
Technology, Automation and the Modern Workforce.
Work-weeks, work-hours, work-places, and even work-wears are getting a whole new definition in modern organisations the world over. Flexibility in work schedules is increasingly becoming the top priority for young job seekers.
With various online tools to manage productivity, communication and execution, remote working is setting a new trend in global businesses — for both start-ups and larger organisations. Employees can log in at their convenience, often in their sweatpants, finish the task at hand or jump into a video conference or simply chat on one of the preferred business communication apps — from their homes, a beach or while in transit in an Uber / Ola.
Automation tools, powered by Artificial Intelligence (AI), are making most of the above easy and possible. AI is increasingly speeding up all the processes which are repetitive in nature or which follow a similar pattern over multiple cycles of operation. Scheduling, billing, payroll management, email responders, proposal generators and many more such tasks are gradually getting automated. This is helping create a workforce that is more productive, as they can now focus more on core business functions like strategic planning or creative thinking. The result is that average work time per week in various developed countries is reducing.
As per available statistics, the annual working hour in the US in 1900 used to be 2900 hours. This went down to 1900 hours in 2000. This has even dipped further in 2020 and is expected to continue decreasing all the way till 2050 as illustrated in the following figure:
The Effectiveness of 8 hours.
A study of nearly 2,000 full-time office workers revealed that people aren’t working for most of the time they’re at work. Among the various unproductive activities listed by the survey were:
- Reading news websites — 1 hour, 5 minutes
- Checking social media — 44 minutes
- Discussing non-work-related things with co-workers — 40 minutes
- Searching for new jobs — 26 minutes
- Taking smoke breaks — 23 minutes
- Making calls to partners or friends — 18 minutes
- Making hot drinks — 17 minutes
- Texting or instant messaging — 14 minutes
- Eating snacks — 8 minutes
- Making food in office — 7 minutes
The total here sums up to almost 4.5 hr. So for a 9 hr work-day, time spent effectively on work is just 4.5 hr. In many cases, this could go down to 3 hr of effective working a day.
So what will work look like in 2020s?
Following is a quick list of bulleted thoughts based on my insights while helping build Sanscubicle.
- Remote work was always going to happen. 2020 and the pandemic helped accelerate this.
- If companies want the best talent, they will now need to have at a minimum an optional remote work policy.
- Cities will start emptying out. Unless it’s an “in person” job, most remote workers will start moving to rural / cheaper places.
- Cleaner air, quieter surroundings and less people will start playing an equal if not more important reason to move out of cities than just the cost of living.
- Efficiency will finally triumph face time. As more employees shift to remote setups they will start being assessed for efficiency in completing a task / project. Many firms have already deployed tools eg. Rescue Time and have started indexing remote employees based on relative efficiency.
- Companies adopting a primarily remote model will start seeing broader profit sharing / incentive models based on these efficiency indexes. This will be required to keep their most efficient employees as the number of flexi-working opportunities will grow for them.
- We will see the rise of the flexi — C level employee. Ie. a CCO (chief creative officer) that becomes the brand custodian for more than one company. Unless you are a Jack or Elon, CEOs for the time being will be a solo, one CEO per company affair.
- Companies will recognise that most of their employees already have side gigs, so instead of pushing non-competes, they will start promoting it with the prima facie being broader hands on experience outside of the company’s day to day.
- The legacy 9–5, five days a week folks that have had the same routine for decades will have a difficult time with this new way of work. The younger workforce will soon question the concept of 8 hour work days / 5 days a week, and eventually see it as an archaic concept of the yesteryears.
- A lack of commute will give workers approximately 25 extra days a year to do other things. Online courses, hobby clubs, side projects etc will start seeing an uptick.
- Some pro-remote companies will start investing in these side projects. Think an evolved form of Google’s 80/20 from the early 2000s.
- Down sizing a company’s HQ to a small room / virtual office used simply for legal compliance and snail mail will start making sense to many pro-remote companies.
- Architects / interior designers will start designing homes with the “Home Office” baked in. This in turn will lead to smarter design thinking and ideas to help house holds better separate “home” from “work” areas.
- Salaries will start hitting equilibrium points. Gone will be the Silicon Valley salaries for a remote worker living in eastern Europe. The macros just won’t let this happen. I foresee governments possibly stepping in with concepts similar to H1Bs for capping the number of remote workers a company can hire outside of the country.
- Companies will start letting go of physical offices in expensive cities and replacing them with smaller clusters of “live and work in” offices in destination based locations such as beaches / hills. Remote companies will start using these for team building exercises, product sprints , etc.
- Video calls are here to stay. Telepresence solutions are currently constrained due to hardware limits. I don’t see this changing till the hardware gets smaller and less obtrusive.
- Smarter city officials will start attracting this new class of remote workers with tax benefits, their beaches / cleaner air, city led investment funds, subsidised housing, etc. We are going see a huge declustering of the “Silicon Valleys” around the world in the 2020s.
Beyond the 2020s.
Work processes have systematically evolved since the first industrial revolution. The metrics of today’s capitalism point to the fact that anything that can be measured or based on rules will be automated.
This means that the only jobs available in the future will be the ones that machines can’t do. For better clarity, consider self-driving vehicles. They will sooner or later replace tens of millions of jobs currently conducted by humans. ‘Uberfication of everything’ is no more a trend, it’s a reality today, as human-interface gets nullified increasingly. Machines find greater acceptance among business owners as they don’t unionize, take breaks or suffer from depression.
Robotics and artificial intelligence are eating jobs at an alarming rate. Automation may put a third of a million retail employees out of work in the next eight years, according to the British Retail Consortium.
What happens when all industries respond with mass unemployment and investments in automation?
The Ignored Math.
The math of full employment is interesting. Consider the following — with higher tech integration, fewer workers with current skill-sets, are to get employment in the industry. That means, to obtain “full employment” — where everyone who wants a job has one — the economy requires that everyone work shorter work-weeks, or else an ever-growing number of businesses is needed in order to employ the same number of people. As an example, let’s assume that an average business employs 10 people in its rolls for optimal output. For full employment, with the same level of output, 10 businesses are required to employ 100 people. If technology enhances the productivity to an extent that 1 person can do the work of 10, the average people a business employs drops to 1. Under the current scenario, the number of businesses needed to employ everyone has to grow to 100. (note: compensating for population growth would require even more than 100 businesses).
Bill Gates had made the headlines a few years back when he suggested that machines like robots and AI could be taxed to offset the social impact of automation. For example, South Korea has introduced a policy that will limit available tax incentives for companies that invest in automated machines. A similar approach has also been considered in the UK, and has been supported by Bill Gates. The money generated via this automation tax could be used towards financing a universal basic income (UBI). A number of countries, including Finland, Germany, the UK, the Netherlands, the US, and Canada, are already considering different variations of a UBI to counteract the side effects of automation. Gates’ suggestion provides an insight into aspects of capitalism and human nature given that the whole point of automation is that the machine doesn’t require a salary or an employment contract.
In the future I’m almost certain of the following three things:
- Our work hours will definitely be scaled back, some folks will see those come close to zero if not zero.
- Machines and AI will perform the bulk of humanity’s work.
- There will some form of UBI / UBI-like compensation model that will provide people with comfortable incomes. This will be based on AI / Automation/[fill] taxes collected from companies.
I believe in the future a majority of folks will not be working, they will be comfortably compensated and AI / Machines will be doing all the work.
The question then becomes: In the future will one use this extra time for volunteering, entrepreneurship, family, civic engagement and creative endeavours or ……