The pandemic has permanently changed the world of work

As businesses across the world start to make sense of the new work patterns emerging in the wake of Covid-19, there is a lot of uncertainty about how things will play out. But I believe a central theme is discernible and that it is the product of two realisations.

Firstly, businesses have realised that having a distributed workforce that communicates and coordinates its activities virtually is not only possible but, in many cases, optimal. Secondly, in undertaking the learning curve associated with rapidly transforming from centralised to distributed organisations, businesses have, in a short time span, adopted and adapted to a range of digital technologies.

Doubtless, this transformation has not been easy and, had it not been for a pandemic, it might have taken many more years for these changes to occur.

Two important questions should now be considered.

To what extent will these patterns stabilise once restrictions on movement become a thing of the past?

What are the implications of these new work patterns for the larger economy?

Will the patterns stabilise?

It would be foolish to claim that one can predict the future states of complex, self-organising systems, so providing answers to these questions is educated guesswork. Nonetheless, there seems to be broad agreement that, independent of the exact nature of new organisational forms and work patterns, we are unlikely to simply return to the old way of doing things. The work-from-home genie is out of the bottle and, considering the challenges of commuting in cities such as Cape Town and Johannesburg, it is unlikely to be put back in. Additionally, I believe there are two specific aspects of traditional organisational work that have been due for an upgrade for some time and that will, on the back of Covid-19, undergo substantial transformation.

The first is administrative and clerical work. Over the past two decades a range of technologies has greatly simplified processes of information gathering, processing and reporting, which are common across all organisational types. These technologies offer, either for free or at minimal cost, easy-to-use features. Moreover, as millennials continue to enter the workforce, there is very little resistance to their implementation and adoption. Younger workers who have grown up with computer technology continuously seek ways to harness these technologies to streamline the administrative or clerical portions of their jobs.

The second aspect of traditional organisational work which is likely to undergo substantial change is accounting and its related functions. As organisations move to integrated software platforms such as enterprise resources planning systems, information becomes structured such that large parts of the work traditionally done by bookkeepers and accountants become automated. Under the banner of business process automation these transformations have been underway for some time, but Covid-19 has given businesses the impetus to accelerate their adoption of these technologies and practices to manage distributed operations.

Implications of new work patterns for the larger economy

This leads us to the second question, namely what are the economic implications of these transformations? The notion that the automation of work will lead to greater economic disparity has been the focus of attention among many leading scholars. Their argument, in brief, is that the occupations that are the most susceptible to automation with our current technologies are generally performed by members of the middle class (office, stock and filing clerks, bookkeepers, secretaries, call centre agents, data entry operators, salespersons). The displacement of these workers would imply further widening of the gap between those who are able to undertake higher education and target more specialised occupations, and those who perform basic labour.

Because a large portion of the South African labour force has low levels of education and is prepared to work for a minimum wage, the automation of basic labour is often uneconomical. Of course, it is true that the uptake of automation technologies will also create a range of new work opportunities. However, these occupations are likely to require technical expertise and, as such, some level of higher education in a technical field.

Against this backdrop, one important indicator of South Africa’s preparedness for these changes is the extent to which those who enter higher education are choosing fields of study with the aim of positioning themselves for changes in the labour market.

A recent study by my research group investigated this issue. The findings indicate that, while most students subscribe to the belief that machines will replace labour, this belief has very little impact on their study and career decisions, with 78% of respondents indicating that they did not consider it when choosing their field of study. Ignorance of the implications of automation for labour demand may be setting many students up for failure, the study concludes. In the wake of Covid-19, this warning may be of particular relevance.