The discourse surrounding digital transformation of businesses and the fourth industrial revolution has been two-sided – A positive for businesses, but negative for an impact on jobs.
Does digital transformation only cause job displacement?
Porsche’s recent plan to increase its already-decided hiring numbers further from 1000 to 1400 for its electronic car project ‘Mission E’ can be considered as one example which highlights that digital transformation is not always detrimental for job-creation. The German-automobile manufacturer is not the only one creating jobs for the future. Its counterpart, BMW, has also been working towards the future of automotive and according to reports, the company is “hiring experts in machine learning and artificial intelligence.” It is not only the automobile industry – the fourth industrial revolution is creating job opportunities across industries.
The bright side
New businesses. New opportunities
Innovations and transformations in business models have also been translating into equally innovative jobs and job descriptions. Data scientists are a case in point. Data science has emerged as one of the most sought-after job in recent years, something which wasn’t the case a decade ago. Ask Hal Varian, Chief Economist at Google, who said in 2009, “People think I am joking but the sexy job in the next 10 years will be statisticians.”
If one were to take the case of technology startups that have emerged owing it to the advancements in technology, then one realizes that these shifts have not only left their mark in legacy businesses, they have also created job opportunities for a multitude of people. Ola, for instance, is valued at 5 billion dollars, and also employs 7000 people over and above the drivers who drive Ola Cabs. Research also suggests that startups aid the economy in job-creation. A research paper “Who Creates Jobs? Small vs. Large vs. Young” by John Haltiwanger, Ron Jarmin, and Javier Miranda (NBER Working Paper No. 16300) suggests that “the younger companies are, the more jobs they create, regardless of their size.” So job creation has also been a facet of the changing dynamics in the industry, alongside ofcourse the incurred job losses.
The dark side
Old job descriptions. No jobs
An argument in favor of job-creation cannot be made without discussing the negatives associated with it. While the unique job descriptions and demands are encouraging signs, it doesn’t change the fact that cumulative loss of jobs has been more than what have been created. The number of jobs created has been the lowest this year since 2008’s recession. The World Economic Forum, in its report, “The Future of Jobs” has also estimated a net loss of over 5 million jobs in 15 major developed and emerging economies in the next five years. By current trends, the loss has been more than the gain.
The way forward
But organizations have to accept that the predicted change is inevitable. A McDonald’s will “not hire an employee for $15 an hour for bagging french fries when it could buy a $35,000 robotic arm,” accentuates Ed Rensi, former McDonald’s USA CEO; especially when the robotic arm is “cheaper”.
In the given context of job displacement due to digital transformation, organizations need to be forward looking and work at building capabilities for the future, rather than waiting for tectonic shifts to happen that shake the industry for good, and result in a lot of casualties.
Organizations need to go back to the drawing board and ask:
Are we working towards creating domain knowledge shifts?
Is HR driving the transformation agenda by predicting the future changes to business and enhancing people’s capabilities to be ready for these changes?
Organizations need to understand, accept, and be ready (if they aren’t already) and devise their talent strategy thinking about the future.