Disruptive Tech and the Future of HR
As companies increasingly embrace emerging technologies, such as robotics, artificial intelligence and machine learning, they must simultaneously address a series of questions: What’s the best way to apply these technologies to their respective companies? Do they require making a stark choice between human and machines—or do they call for a more hybrid approach? How does the organizational culture need to change for businesses to thrive in this environment?
These are some of the questions Ravin Jesuthasan will explore in his keynote, “Reinventing Jobs: Automation and the Future of Work,” at October’s HR Technology Conference in Las Vegas. Jesuthasan, managing director at Willis Towers Watson and a recognized global thought leader on the future of work, recently co-authored a book with University of Southern California’s Marshall School of Business professor John Boudreau titled Reinventing Jobs: A 4-Step Approach for Applying Automation to Work.
HRE Editor David Shadovitz recently spoke to Jesuthasan about what these technological developments mean for HR and business leaders. Excerpts from that conversation follow.
Much has been said and written about how automation, such as AI and robotics, is going to impact jobs in the coming months and years. What’s your take?
I think it’s going to occur fairly quickly, but also a lot more nuanced than perhaps many people think. The reason for that is AI is progressing tremendously, but it operates in some very narrow and specific domains. So, the application of AI in, for example, banking (say, augmenting the work of a teller, perhaps) is growing in leaps and bounds, but it’s in a very narrow and specific domain. The same [is the case] with the use of technologies like robotic-process automation for highly routinized, repetitive, rules-based work being done by white-collar workers.
Automation doesn’t affect jobs directly. It affects the component tasks. What we’ve seen with this new breed of automation, like robotic-process automation, AI [and the like], is they do one of three things: They substitute certain types of tasks, they augment many others and they create new types of human tasks.
I think the big shift that humanity is going to face is the rapidly shifting skill premiums that are going to underpin these changes.
Look at accounting, a profession that’s been around for 500 years in some shape or form. By most estimates, we will see more change in that profession over the next five years on account of AI and robotic-process automation than we’ve seen in the previous 500 years, and it’s because, as more technologies come in, they’re going to substitute all of that routine, repetitive, analytical work. They’re going to augment a lot of critical decision-making and judgment-type skills, and then they’re going to create new types of work associated with training the algorithms, calibrating them to ensure we’re removing bias, etc. In the past, the premium on skills may have been on the technical aspects of the work. But going forward, that premium will shift so that it’s much more [centered] on human [aspects, such as] communication skills and the ability to convey empathy and care.
Are there certain industries that are going to be impacted by this more than others?
One is any white-collar work, which hasn’t changed very much [until now]. Blue-collar work has been affected a lot by automation over the last two industrial revolutions, but we’re seeing white-collar work really in the crosshairs, if you will, of this Fourth Industrial Revolution. With white-collar work, it’s anything that is highly repetitive and rules-based. So, professions like legal and accounting … are being significantly disrupted, but you’re also seeing a lot of use of automation in industries like oil and gas, and mining, where the proliferation of robotics is allowing organizations to [automate] work that is dull, dirty or dangerous. This is work in which you can’t have a single person making a mistake. The same [is the case] with an airline pilot.
So, those are types of work that lend themselves very quickly and optimally to substitution through the use of automation. They are process industries where the consequences of an error are pretty significant to society and the organization.
You refer in your book to “human-automation combinations.” Can you elaborate on what you mean by that?
Let me go back to my accounting example. You might find that, for a mid-level accountant, maybe 40 percent of our existing body of work is substituted by robotic-process automation. Another 30 percent is perhaps augmented through the use of AI [and] the use of smart systems that coach that person [and] maybe provide recommendations for how she might do a job. Then there is potentially another 30 percent of new work that’s created by the presence of that automation.
So, the work is shifting from doing the highly routine, analytical things to communicating about them to providing insight and judgment from that person’s experience. The person is liberated from the mind-numbing sort of analysis that is highly repetitive so she or he can apply [her or his] cognitive and communication skills to deliver greater value to customers. That’s what [John and I] mean by getting to the optimal combinations because automation will do these three things simultaneously across any grouping of jobs: It will substitute some things, it will augment others and it will create new human work.
Given these developments, are there certain things employers should be doing to reskill their workforces?
Absolutely. I presented at Davos [in January], and reskilling was one of the most hotly debated and talked-about topics at that prestigious event.
On the macro level, it changes how we think about education, both at the early-childhood stage all the way up to adult education, but it also [has implications for] organizations. Today, the way we organize work is in jobs. Virtually every element of the talent lifecycle within the organization [is tied to that]: how we pay people, how we develop them, how we deploy them. These are all based on this notion of a person in a position. Going forward, what I think is going to be called for is a much more skills-based architecture that allows the organization to flex and pivot in a much more agile way. So, instead of having the job architecture be the anchor for the talent lifecycle, a skills-based architecture is what is increasingly going to be called for.
So, how will that impact how companies are going about learning and development?
I think one is recognition that we need to shift from a traditional mindset around training, where it was an organizationally driven process [and] largely technical in nature, to where reskilling and development are staples of how the organization operates. They’re not things that we can increase when times are good and then decrease when times are bad.
In the past, we provided security through defined-benefit plans, through commitments of employment for life, etc. Going forward, given the world we live in, that security is going to increasingly come from the promise that we are going to keep our talent relevant.
Now, that doesn’t mean we will be the ones employing those skills; it might be someone else. But our promise to that talent needs to be that we will ensure that they are continuously relevant, whether it’s within our business model or elsewhere. Some of the things that I’ve seen—which I think are absolutely heading in the right direction—are organizations giving people visibility into what new work is coming and what new skills are [in demand]. It allows them to see the gap between their skills and these new skills—and then access an HR-curated portfolio of developmental options.
Can you cite an example of a company that’s doing a good job reskilling its workforce?
AT&T has probably done as much on the reskilling front as anyone else. Its leadership is committed to ensuring the continued relevance of its workforce. There is no promise that they will never have any layoffs … but the reskilling imperative has been raised in the organization, and everyone has made it a cultural imperative. Everyone sees that they have to continue to stay relevant [and] tap into the resources they’re being provided.
How does all of this feed into a company’s hiring strategy?
I think that’s probably going to be one of the most dramatic changes because, today, the way we recruit is largely based on traditional factors like … employment qualifications. What degree do you have? Where did you get that degree? What was your GPA? What other work experiences do you have? Were you a member of the basketball team? All of these are really inadequate and poor proxies for the ability of someone to contribute within a business model. So, I think there is going to be a shift from employment qualifications to what we think of as work-readiness.
More and more organizations want to see individuals demonstrate the skills that they’re going to be employing in performing their work. So, they will be relying less and less on someone’s degree as being the criteria, less and less relying on someone’s sort of pedigree … as being the proxy for how they will perform. Increasingly, they will be getting into skills-based assessments, more simulations, and greater use of virtual and augmented reality to allow people to demonstrate whether they can actually perform, as opposed to trusting they can.
What kind of impact do you see these developments having on leadership? Will there be certain skills leaders are going to need to succeed?
In the first part of our book, John and I focused on the transformation of work, including getting to these optimal combinations of humans and machines. The second part of the book [focused on] how does the organization, culture and leadership need to change? The application of technology is not an isolated thing that is limited to going out and getting some machines—and then sticking them on the shop floor. The presence of these new combinations of humans and machines raises all sorts of questions about leadership and culture.
Probably the biggest shift for leaders is the growing demand for them to be able to orchestrate this new ecosystem for work. That means understanding all of the different options available to get the work of their enterprise done and understanding when one makes sense more than another. When do I use a gig worker versus an FTE? When do I use … robotic-process automation versus a gig worker? When do I use IBM Watson for a particular need that I have?
So, what does that mean then for HR executives?
I really think this Fourth Industrial Revolution has the potential to be the golden age of HR if we seize it. The reason I say that is because the complexities of getting work done are increasing exponentially with all of this automation and the democratization of work. I’ve seen really progressive HR functions say, in light of these changes, we, in HR, need to shift from being just stewards of employment and all of the things that we do to enable and support employment to becoming stewards of work. So, we’re going to be the ones who sit alongside business leaders and help them figure out how best to execute on these different work options and how best to curate talent experiences for every human being who touches our mission and purpose, whether it’s the employee of the outsourcer or the FTE. How do we get every one of those people aligned to and contributing discretionary effort because they feel vested in our mission and purpose?
That’s a huge opportunity for this profession, one that starts with shifting from thinking about our role as being limited to stewarding employment to one that’s more stewards of work and the advisors to business leaders on how to orchestrate this new ecosystem.