Digital transformation and employment: the future of the workplace in the fourth industrial revolution

Around the world, and throughout almost every sector, the fourth industrial revolution is ushering in a new era – an age of digital disruption and automation, in which the very essence of how humans work is being redefined.

When we refer to the fourth industrial revolution, we refer to the digital transformation of processes, tasks and jobs that have traditionally been undertaken manually. At its core, the digital transformation process involves implementing specialist technologies that ‘digitalise’ operations.

Digitising operations – which can include fully or partially automating them - makes them far more efficient, cost effective, and more enjoyable for human workers. The digitising process also reduces risk, streamlines processes and allows more efficient allocation of resources. Ultimately, it enables businesses to work smarter and faster and leads to more fulfilled personnel – all at a lower cost.

From the chatbots used by an insurer’s customer service departments to the increasingly automated KYC checks undertaken by investment banks, industries of all shape are already on the path of digital transformation. There remains, however, considerable concern, confusion and miscaption over how this new era of automation will impact traditional jobs, skills, training and wider company culture.

In recent years, reading some of the tabloid newspapers in the UK would make you believe the worst. Headlines such as “nearly nine million British jobs could be lost to AI by 2030” and, more recently, “Covid pandemic is ‘accelerating the rise of robots’ which will lead to loss of millions of hospitality jobs” would imply digital transformation will lead to a dystopian future in which humans will become redundant (a doomsday scenario referred to as the ‘jobocalypse’).

In reality, many automation tools such as Robotic Process Automation (RPA), for example, simply don’t have the capacity to ‘think’ for themselves (unlike AI); their ability lies in automating repetitive, manual, mundane high-volume tasks that require a lot of processing time but little human expertise.

Given RPA cannot function or be configured without human intelligence, it has not yet been a direct driver of unemployment. Rather, the technology is there to enhance human thinking, and work side-by-side with humans, not replace them.

Research from McKinsey shows that 40% of workers spend at least a quarter of their work week on repetitive tasks, whilst 60% estimate they could save at least six hours a week with greater automation of their role. University of London research also shows that employees at organisations augmented by automation get a third more done with their time, freed from the ball-and-chain burden of monotonous repetition.

There will still be a need for human input and decision making in processes, but RPA is able to do the heavy lifting; and for those whose job would have previously seen them manually do the heavy lifting, they in turn can be upskilled or transferred to new, more engaging roles.

In the summer of 2021, the British Commons Work and Pension Committee concluded as such, when it published a comprehensive report into the fourth industrial revolution. The report stated that: “The evidence we have heard does not suggest that new technology will lead to mass displacement of workers: instead, it is likely to lead to the creation of new jobs alongside the loss of others. Automation may also result in the transformation rather than the loss of existing jobs.”

Where the greatest impact of digital transformation will lie, from a human and personnel aspect, is not therefore in redundancy – but in the skills and culture change that the process of transformation involves.

Contrary to a common misconception, digital transformation is not simply about implementing technology and flicking a digital switch. It is first and foremost about change within and between people, and for change to be effective, a proactive culture – that is, a mindset that positively embraces the opportunities afforded by digital transformation – is vital. Instilling a positive culture of change will therefore be one of the greatest challenges HR departments face in the coming years.

Another area that human staff will feel the greatest change as a result of automation is in upskilling and reskilling. It is already becoming increasingly important for staff to be digitally savvy and native, to understand how digital transformation is transforming the workplace, and – on a practical level – to be able to operate many of the new technologies that are being implemented.

Currently, there is a considerable tech skills gap in the global workforce, with companies unable to source the tech expertise they require; there will, therefore, be considerable pressure on HR departments to ensure that existing staff are sufficiently trained and equipped with the right skills for the automated age, and that recruitment is better angled towards hiring those that are technologically fluent and capable.

For any programme of transformation (be it digital or otherwise), there are five key stages to successfully implementing digital transformation which HR change makers should base a programme of transformation around. Known as the ADKAR model, the five stages are: awareness; desire; knowledge; ability and reinforcement.

These stages involve effectively communicating why digital transformation is necessary; having a desire to undertake transformation; knowing how a digital transformation strategy can be implemented; having the right and capable people to implement this strategy; and ongoing reinforcement through culture and investment.

The time for companies to digitally transform is now – and as the previous three revolutions have demonstrated, technology doesn’t replace – but complements and optimises human processes, paving the way for a whole host of new skills and experiences to be unlocked for those involved. Through upskilling, retraining, education and culture change, HR departments will be the key drivers of transformation.

Dr Zeynep Hizir, Doctor of Digital Transformation and intelligent automation (IA) implementation academic.