Charlotte Aguilar-Millan checks the urgency of human resources in future companies through her eleventh blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.
The company of the future will not have the same staffing requirements as the company of today. The use of personnel, an often costly fixed cost, has been declining. The company of the future will not rely on personnel to fuel their growth. We are now in an age of technology where unskilled labour is fast being replaced. This can be seen with robotic lawn mowers, self-service fast food and even an order app for Starbucks. These tasks once performed by humans, have now been successfully replaced by technology.
While technology has been developing, labour supply has tightened as the population ages. Unemployment rates have been steadily declining from 2011, with May 2019 seeing rates of only 3.8% in the UK. The last time this was seen was in 1974. With tight labour markets, an opportunity for labour to demand a better working environment is emerging. With this, the workforce is becoming more agile. The company of the future will have to compete to attract and retain staff.
In July, Amazon announced that it will retain a third of their US work force in the technologies of the future. The companies that will succeed will be those who entice new workers and keep them stimulated sufficiently to stay. The rise of the gig economy heralds an opportunity for staff to determine the environment in which they wish to work. The gig economy gives the workforce more flexibility on working hours and location.
This is only possible where there is a shortage in supply. Specialists in fields such as IT or Finance have seen their conditions significantly improve, with large companies offering incentives such as unlimited annual leave or pet maternity leave. In the unskilled work force, for gig workers in fields such as fast food or transport, the landscape is not so good. Uber provides a platform for gig workers to supply their labour. It determines a driver’s profitability and whether any customers are routed to their cars. Uber’s control over what a worker is paid month on month has created an instability for unskilled labour. It also demonstrates that the company of the future does not need staff. The Company of the future will not even require drivers. Once autonomous vehicles become sufficiently reliable to be roadworthy, these will replace the workforce.
This has enabled companies to exploit the labour force by expecting a pseudo employee relationship with control over the worker. However, they do not have the obligations of a typical employer. No sick pay, parental leave or pension contributions are required where you do not employ your labour force.
The trend to have fewer employees will only continue into the future. Tech companies are leading the way. Facebook in 2019 had an average turnover of $1.4m per employee while Apple had $2.1m per employee. When compared with the successful companies of the past, this demonstrates how the need for employees is in the past. VW’s average turnover per employee was $0.5m with Ford at $0.8m in 2017 and 2018 respectively. The Company of the Future does not need employees in the same way the Company of the past has. The trend of specialisation will continue into the workforce with those unspecialised left exploited.
Will the company of the future need staff? Yes, and no. If those staff are highly trained and motivated, then yes. If those staff are unskilled and could be replaced by robotics and AI, then no. The challenge to society is how to upskill to ensure that the latter aren't left behind.
© Charlotte Aguilar-Millan 2019