World of Work: Into a New Era
Author: Georg Weinand
The world of work is changing rapidly. Yet companies, managers and their employees can all adapt successfully and humanely, despite or even because of the coronavirus pandemic.
Our working world is changing rapidly. Driving forces such as digitization and Artificial Intelligence are not only increasing companies’ performance and efficiency, but also leading to new forms of work and management, as well as the redesign of supply and value chains. People often view such rapid changes with ambivalence. While some emphasize the dangers for companies and their employees, others’ primary thought is of opportunity. At the end of 2019, in a survey conducted by opinion research institute YouGov, 60 percent of the 3,600 respondents still believed that digitization in Germany would cause more jobs to disappear than it would create. Then came the coronavirus pandemic, and with it a noticeable change in attitudes toward the consequences of digitization. Without digital working equipment, many companies would have been stuck with no way to operate. Employees also recognized the advantages of working from home.
It is no news that the working world is changing. “People have always tried to automate stressful or repetitive tasks,” says Professor Werner Eichhorst of the IZA Institute of Labor Economics in Bonn. From this perspective, digitization and the application of Artificial Intelligence are further steps in the long-term process of technological change. Due to our aging society with longer life expectancies, Werner Eichhorst even sees opportunities for growth in the service sector, especially in the areas of health, care, and education. Here, humans can also play off their strengths over Artificial Intelligence to great effect. “In the future, people will emphasize what makes them different from technical solutions in their field,” explains the labor expert, “especially where the collaborative resolution of complex activities is paramount, and where cooperation, interaction, and empathy are required.”
Networked value creation
Economic globalization also remains an important factor influencing the transformation of the working world, although it has come under pressure due to recent trade restrictions and coronavirus-induced mobility limitations. But Covid-19 could also turn the tide again: “If the pandemic turns into a serious economic crisis and thus intensifies cost competition, companies will try to tap into new savings potential, which in turn could mean more outsourcing and globalization,” Eichhorst explains.
This uncertainty is reflected in companies’ supply and value chains. Professor Evi Hartmann from the Friedrich-Alexander University of Erlangen-Nuremberg says: “We have not yet seen any major deglobalization. But where companies were previously heavily dependent on a global supplier, they’re now increasingly switching to so-called multi-sourcing, effectively a worldwide network of suppliers.” In addition, warehouses are becoming larger and more numerous, and operating with larger buffer stocks rather than relying on continuous just-in-time delivery practises.
This is exemplified by Swabian industrial company Stihl, known worldwide for its chainsaws. “High service standards have always been important to us, even before Covid-19. We want to be able to deliver at all times and therefore don’t work according to a strict just-in-time concept,” says Dr. Michael Prochaska, Executive Board Member for Human Resources and Legal Affairs at Stihl. During the pandemic in Spring 2020, Stihl was able to largely maintain operations at all production sites, without needing to cut working hours. Supply bottlenecks were cushioned with existing stocks. Digitization has also had considerable impacts on the development of supply and value chains, says Evi Hartmann: “It strengthens the real-time link-up of partners along the chains, makes supply chains more transparent and sustainable, and serves to improve the exchange of information as well as the stronger networking of market participants.” In particular, increased transparency changes the balance of power along supply chains in the long term. “In short: More digitization means more fairness – that benefits us all.”
Soft skills as hard currency
At the same time, the framework in which work takes place is changing – be it more flexible working hours, new remuneration structures, or simply the place where work is carried out. If everybody no longer heads to the office each day, companies, managers, and employees will have to have a rethink. For Trend Researcher Franz Kühmayer from the Future Institute in Frankfurt am Main, one thing is clear: “Managers must develop themselves into cultural promoters and coaches who enable employees to make decisions independently and with confidence.” Employees must realize the advantages they have over machines and algorithms. “We are creative and social beings. In the future, occupations and qualifications that require these two skills will become increasingly important. I’m convinced that soft skills are the hardest currency of the future,” announces the Austrian.
The physical and mental health of employees must also remain in focus after the pandemic, says Kühmayer. For companies, this means firmly anchoring health in their corporate culture and offering concrete measures. Working under rapidly changing work conditions can have health consequences. Dr. Wladislaw Rivkin of Aston University in Birmingham is performing research into this: “The change in the working world requires a high degree of adaptability from employees, for example when acquiring new skills. This requires willpower to motivate them to deal with new content. This in turn can lead to states of exhaustion in the form of burnout or depression,” explains the psychologist. The result is high absenteeism and workforce turnover. To prevent this, Rivkin recommends “servant leadership” to managers. The primary goal is the advancement of employees. “Employees’ influence on workflow or the way tasks are distributed protects their health and leads to increased intrinsic motivation,” says Rivkin.
Christian Liedtke, a specialist for Work 4.0 in the HR Department of Deutsche Kreditbank (DKB), would probably agree with Rivkin. In recent years, the Berliners have set their company on a new footing under the banner “New Work” for the benefit of their employees. “New Work is intended to give employees the freedom to develop teamwork and personal responsibility, as well as to ensure that obligatory and interrelated cooperation works well,” explains the HR expert. “We have introduced flexible work in terms of time and location, and equipped employees with mobile digital work and communication tools as needed,” Liedtke specifies. The workspaces have also been redesigned to create team areas, creative rooms, and retreats, in addition to work and project areas. Executives and employees seem to like the new era: “As a matter of fact, people’s wishes are leaning towards even more self-organization and self-determination in daily work design, and a departure from the culture of presenteeism.”
Breakthrough in people’s minds
Dr. Josephine Hofmann from the Fraunhofer Institute for Industrial Engineering IAO in Stuttgart isn’t surprised. From her point of view, Covid-19 in particular means an immense push towards virtual work. “Due to the pandemic, we’re experiencing the breakthrough of the digitization of work and cooperation with a speed of change that seemed unthinkable only a short time ago,” says the business information specialist. Perhaps the most important change took place in the minds of those involved: “It became clear to many that physical presence isn’t absolutely necessary to be able to work together successfully.” This also applies to companies’ top management: “Digitization must be a strategic topic driven by top management in all areas of the company, not least because it offers the opportunity for new business models,” explains the work expert. She adds that the speed and complexity of the digital transformation requires not only enough material and personnel resources, but also the necessary cultural and persuasive work within the company. “That’s not possible by simply delegating digitization processes to the IT department,” Hofmann notes.
Anna Kaiser, Vice President of the German Federal Association of the Digital Economy (BVDW) in Berlin and Managing Director of software company Tandemploy, reinforces this: “Every company must first ask itself what goals it wants to achieve with digitization.” Only then does it make sense to see whether and to what extent digital technology can be helpful in this process, because: “Digitization is not an end in itself but should primarily serve to make life and work better for as many people as possible.” Today, people can work together more flexibly, productively, and resource-efficiently than ever before. “That’s great, if they actually put it into practice,” advises Kaiser.
This willingness to implement is proven at Stihl. “Digitization is an integral part of our corporate strategy,” explains Personnel Director Prochaska. Digital transformation not only creates new professions and jobs within the company, but also makes work much easier in many departments. “Digital tools have decisively improved the cross-border and location-independent cooperation and networking of our global manufacturing network with our 41 sales and marketing companies,” says the business psychologist. Production at Stihl’s headquarters in Waiblingen also benefits from digitization and automation. For example, employees are supported by a collaborative robot in the quality inspection and packaging of cut-off machines. “The robot performs the quality inspection for the employee and then transports the cut-off grinder, which weighs around ten kilograms, into packaging. This amounts to a daily relief of around eight metric tons for our employees,” Prochaska explains. This way, digital technologies not only ensure greater process speed and efficiency, but also protect employees’ health.
Allianz, the world’s second-largest insurer, also relies on Artificial Intelligence. “We use AI for customer interaction with chatbots as well as for risk analysis and proposal preparation for insurance contracts. AI is indispensable for us, especially when analyzing large amounts of data,” reports Gregor Wills, Allianz Spokesman for Digital Issues. The same applies to the automation of claims: “In travel insurance, our process automation solution can determine with 97 percent accuracy whether a claim should be paid or rejected manually.
Gold standard of skills
“AI will find its way into every company and qualification level, as well as every profession,” says Dr. Ole Wintermann, Labor Market Researcher at the Bertelsmann Foundation in Gütersloh. At the moment, however, the focus still lies on activities that represent routines or are data-heavy. “AI can already replace a doctor’s medical histories in medical offices or help out in callcenters by preselecting people to be called,” reports the economist and philosopher. Like his research colleagues Eichhorst and Kühmayer, Wintermann is convinced that soft skills will become much more important than hard skills for human activities in the working world. The ability to communicate and solve problems, the ability to analyze, the ability to collaborate virtually, openness to change, and interest in technology – these are the new gold standards of human skills. Equipped with this basic configuration, the future world of work holds unimaginable possibilities. “Thanks to Augmented Reality, people will be able to carry out activities for which they have not previously been trained,” Wintermann asserts. And Virtual Reality will support intercontinental collaboration in real time.
Nevertheless, the introduction of AI is no walk in the park. “Companies that want to enable collaboration between people and AI should start with small-scale experiments to learn how to redesign processes,” says H. James Wilson, Global Managing Director at Accenture Research in San Francisco. The Witzenmann Group from Pforzheim is taking exactly this approach. As befits a “hidden champion” of German medium-sized businesses, the automotive supplier is approaching the task with precision and caution: “The current hype surrounding the topic of AI is raising many expectations,” says Steffen Cordes, Head of the Department for Digitization and Business Model Innovation. However, he says that one must first build up one’s own knowledge so that a realistic assessment of the technology is possible. “In our company, all AI applications are in the test phase. In cooperation with external partners such as the Fraunhofer Institute for Manufacturing Engineering and Automation IPA, we’re bringing the necessary expertise in-house,” reports Cordes. In line with Wilson’s vision, projects are currently running in document processing, quality control in production, as well as prototypes for automation applications. “For example, we’re expecting support for work that’s tiring for people. This will increase efficiency and allow employees to focus more on value-adding activities. At the same time, by providing internal support for the projects, we’re trying to reduce the workforce’s fears about AI,” explains the department head. Involving employees is also an important factor for Wilson because what applies to changes in the working world also holds true for AI: “It needs people to make it work.”
Three Questions For Dr. Karin Müller, Head of the Human & Health Department at DEKRA
How can companies support health and performance of home office employees?
Müller: Employees’ social contact to the company mustn’t be interrupted. Managers must know how to manage employees who don’t work on site. Further training measures can help here. Virtual team events can help replace personal contact between employees. The workplace design is important, for example whether the screen is set up correctly or the study is bright enough. Exercises encouraging employee health on professional screen savers are also beneficial to well-being.
What are the most common health risks to employees in the home office?
Müller: It’s well known that most accidents happen in the household. When working at home permanently, psychological stress factors can be added, such as the simultaneous care of children or people in need of care. It’s important to switch off from work. Rituals or social activities such as sports or meeting friends can help here. To avoid physical damage, it’s important to pay attention to the ergonomic design of the workplace.
Can home office also have a positive effect on the physical and mental well-being of employees?
Müller: The elimination of long journeys to the workplace is a real plus. There’s also more time for health-promoting activities such as sports or regular visits to the doctor. In addition, people become more established in their own social environment. Many employees can also work better and more concentrated at home, which increases satisfaction with their own work.