Advances in technology, innovation, desire for flexibility and independence, are changing how we work, and the type of work we do. The old businesses and processes are being replaced with new ones in what the economist, Joseph Schumpeter, called Creative Destruction. For instance, as people become more conscious of the environmental impact of their actions, their reliance on petrol or coal to power vehicles and machines reduces drastically. The rising investment in alternative and cleaner energy sources, e.g. biofuels, solar, electricity, etc., will ultimately make some jobs outdated and be replaced by new ones. Another example of creative destruction is the replacement of DVDs and VCDs by streaming platforms such as Netflix, Hulu, and Amazon Prime Video.
Automation and artificial intelligence (AI) are steadily disrupting industries. AI is being deployed to handle tasks previously handled by people, especially the repetitive and data-driven ones. People must adapt by learning new skills and technologies to be relevant.
The trends that are transforming today’s labour market and determining the future of work are explained below.
Remote and hybrid work
COVID-19 changed the way we work forever! Remote working was introduced by companies to ensure that work continued without spreading the virus. Communication and collaborative tools were used to facilitate the completion of tasks, and projects without any physical contact. The tools used include Zoom, Google Meet, and Microsoft Teams.
COVID-19 has gone but its impact remains. Many companies continue to allow workers to work remotely while some use a combination of physical and online (hybrid) modes. It is hard to eliminate these modes of work as businesses have achieved cost savings and improved margins from reduced power consumption, and feeding cost when workers are not physically present, not to mention less productive hours lost in traffic.
Gig Economy
Those who could not secure permanent or stable jobs get engaged through the gig economy. The gig economy offers temporary jobs for people to do whenever it is needed. It gives room for flexibility as a company can bring in additional workers when needed, instead of having too many workers on their payroll that are not always fully engaged. Currently, there are online platforms, like Fiverr and Upwork, that help firms hire workers from any part of the world temporarily for any project or task such as website development, digital marketing, graphic designing, programming, writing, and so on. One downside of this mode of working is that the workers are not sure of any specific hours they will work at any time which makes their incomes unpredictable.
Digital nomads
This is a kind of flexible working arrangement that gives the worker the leeway to travel around the world while still maintaining his job. The work is done online and can be done from any location, thereby allowing those who are adventurous travellers to fulfil their dreams without losing their jobs. A digital nomad may be self-employed or freelancing. All the worker needs is an internet-enabled device such as a smartphone, tablet, or laptop. Some countries are taking advantage of this mode of working to boost their economic activities and GDP by giving special digital nomad visas to qualified individuals, for example, Portugal.
Flextime
Flextime is a flexible working arrangement that allows the employee to choose the work schedule that suits him, e.g. when to start work and close for the day. There is no strict schedule as each worker can adjust his schedule as long as the required number of hours is completed. For example, for an 8-hour schedule, a worker may work from 10 a.m. to 6 p.m. instead of the normal 8 a.m. to 4 p.m. A worker may combine shorter and longer days within the week but he ensures that he completes the total number of hours required per week or the required output for the week.
Outsourcing and offshoring
Outsourcing allows a firm to contract out some of its business functions to others outside the organisation, e.g. ICT, accounting, auditing, security, cleaning, etc. The firm employs others (external firms or individuals) to handle its non-core activities to allow it to focus on its core activities.
Outsourcing offers flexibility as the firm only buys in when needed and can terminate the agreement if it is no longer needed. It is cheaper to outsource than invest in maintaining the business function internally. In addition, the firm benefits from the quality services provided by outsiders who are specialists in their areas.
If a function is outsourced to a party outside the country where the business is located, it is known as offshoring. It enables the firm to benefit from the low-cost advantage possessed by some countries.