Digitalisation has had a profound impact on our society, fuelling the on-demand economy and ushering in an era of unprecedented customisation of goods and services.
Gone are the days of Henry Ford and “you can have any colour you want as long as it’s black”, today everything is personalised: Want the latest video game? It’s just a click away. Dishwasher broken? No problem. Choose a new one to arrive tomorrow. Hungry? Order delivery and you will be tucking-in within the hour.
For consumers this is paradise. Everything they want, when they want it. For workers the picture is less rosy. As businesses have scrambled to satisfy this new demand it is the workers who have paid the price. An on-demand economy requires workers to be available 24/7 – often with less job security – and this has led to much stress and despondency.
However, all is not lost. The world of work is evolving and there is much cause for optimism. These are some of the issues explored in my latest book. While I started writing it before the Covid-19 crisis, in many ways the global pandemic has not changed the fundamentals, but made everything happen more quickly and more broadly.
The on-demand economy has upended the very concept of work. The full-time, 9-5 job model established in the 1950’s to meet the demands of a standard production economy, is simply not fit for purpose today. As we enter this third decade of the third Millennium people are no longer assured a salary each month regardless of whether they do a good job or not. We are witnessing a new, transactional approach to work, where people are paid by the hour or by the task and payment is dependent on the satisfactory completion of the job: this is the definition of “gig work”. Think about it – delivery drivers are not paid for the amount of time that they wait outside a restaurant, but per delivery. In many ways this is a return to pre-industrial times when most workers were independent and earned their living by delivering task by task.
In today’s economy the old model of capitalism, with its alliance between a company and its workers, has been replaced by an alliance between consumers and shareholders. Consumers want more, faster and for less. Shareholders push organisations to adapt and seize the opportunity – all the while asserting downward pressure on costs. The result is that companies have trimmed their workforce and relied increasingly on flexible employment contracts and outsourcing in meeting demand.
There is a certain schizophrenia about the whole thing of course because workers are also consumers. So, while as consumers people are happy to buy a product made in an emerging market at a low price, as workers they see their jobs under threat. We have seen a backlash with the ‘buy local’ movement – but are workers really prepared to pay 10-20% more for the privilege? Especially when real wages have been virtually stagnant for over a decade.
Just as the old working model of permanent, full-time contracts has had its day, so too I believe has the way in which we organise our social protections. Not only has the current system become unaffordable, it does not provide protections for the growing number of people who are working in new and emerging forms of work (platform work, casual work, part time, independent contractors etc), What’s needed is a new social contract that affords protection to all workers and balances flexibility and security. We need a more equitable social security system into which everyone contributes – through direct and indirect taxation – and which provides everyone with social protections including unemployment benefit, sick pay, family and child support, pensions etc, regardless of their work contract and status. It is a paradox that under our current systems it is those people who take the most risk that receive the lowest levels of protection.
There is much to be done. If the consumer is to remain at the centre of our social model then people need to adapt and act in a more inclusive and sustainable way. Companies need to change too and behave in a manner that is both socially and environmentally sustainable. Society, for its part, must reconcile rampant consumerism with the rights of workers for decent work and protections.
We will exit the pandemic with the world of work significantly changed. Remote working will be more widespread. People have moved to a new way of managing their work, based on trust and results and will not want to return to a culture of presenteeism. Most organisations will adopt hybrid systems with people in the office two or three days a week and working from home or coworking spaces for the rest. The exodus from cities and offices as people seek a better quality of life is already underway – according to McKinsey, New York has lost 100,000 inhabitants since the start of the year and the figure might be as high as 300,000 for London!
The thirst for freedom that has been building among workers for some years gathered further momentum during the pandemic. People want greater choice over how, when and where they work. Essentially, our society is demanding that the same consumerism that we enjoy in our private lives is also a feature of our working lives: customised to our individual needs and circumstances.
Managing Director, World Employment Confederation