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How technology will disrupt labour relations

In 1913 Henry Ford introduced the moving assembly line to his Ford Motor Company manufacturing plant. The moving assembly line revolutionised manufacturing. The increase in productivity was dramatic, but so was the staff turnover. Employees struggled to cope with the increased pace and demands occasioned by the introduction of this technology. If the factory wanted to increase its staff complement by 100 in 1913, it had to hire 963 employees to factor in the high staff turnover.
 
Never a man to flinch at a challenge, Henry responded by doubling wages. He introduced the $5 a day wage in 1914. As you can imagine, this had a positive impact on the company's staff retention rate. But his double wage offer came with conditions. Employees had to agree to adopt healthy and moral lifestyles if they wanted to benefit from the $5/day wage.
 
Ford set up a sociology department to monitor compliance to the set standards by employees and their families. Investigators would make unannounced calls upon employees to gather information about living conditions and lifestyle. Hit the sauce too hard or regularly? Ford would immediately disqualify you from earning the $5 wage.
 
Ford's social experiment halted in the early 1920's for two main reasons.Firstly, it became increasingly costly to maintain the programme in the light of increased competition from other vehicle manufacturers. Secondly, there was significant push-back from staff to the home visits by inspectors.
 
Jump forward a century or more. Imagine employees reporting for duty at a large warehouse for a retailer. Workers wear armbands that track the goods they gather in the warehouse. No more clipboards, no more human error where the employee forgets or neglects to reflect that he collected an item from the warehouse. Near field communication allows the armband to communicate directly with the items and the item registers on the worker's wearable device. The armband instructs the wearer what to do next, how long it should take him to complete the task and provide analytical data to track and monitor performance.
 
Tesco's distribution centre in Ireland has been using this technology since 2004. Even with previous generations of wearable technology, Tesco reduced its full-time workforce required to manage its 12 000m2 facility between 2007 and 2012 by 18%. Apple, Garmin, Samsung, even Tag Heuer all make smart watches that can do anything from monitoring your heart rate, recording your movements via GPS, to even telling the time. How long will it be before Tesco replaces its current wearable armbands with smart watch devices? There are companies out there doing this already.
 
The fourth industrial revolution is already having a profound impact on the world of work. Work as we know it will change profoundly. The World Economic Forum reported in 2016 that: “On average, by 2020, more than a third of the desired core skill sets of most occupations will be comprised of skills that are not yet considered crucial to the job today.”
 
 In four years, you'll have to relearn 30% of your job  -  the good news is that technology will help you do it.
 
Sophisticated technology has its disadvantages,  however. The risks posted to the labour sector by artificial intelligence, cannot be ignored. Employees in fields such as customer service and transportation face a ‘disruptive tidal wave’ of automation in the not-too-distant future.
 
According to a report by Forrester, robots will have eliminated 6% of all jobs in the United States (US) by 2012,  starting with customer service representatives and eventually truck and taxi drivers. Six per cent of jobs is a huge amount in the US. Imagine another 6% unemployment in South Africa. As it currently stands, our unemployment is at 27%. This would result in one-third of the economy being unemployed. The consequences would be catastrophic.
 
So how do we, as a South African economy, prevent the inevitable and minimise unemployment?
 
If we adapt to the ever-emerging markets and technology, we can prevent our unemployment rising. By creating robots, servicing robots and technology and being innovators, our economy has the potential to flourish.
 
We have to invest in education, teach the youth how to programme, build technology and be fully involved in the ICT sector. We will then have the relevant skill sets needed to be able to develop the technology our economy desires, and to use the technology to advance our economy.
 
Instead of thinking of the negative, we need to look at the positive and the prospects of success. If we embrace this change, as many other countries have done in the past (such as how China embraced the manufacturing sector) we have the potential to bring unemployment down and be leaders in advanced technology.
 
In his theory of evolution, Charles Darwin famously stated: “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change.”
 
The change needs to start now, in our schools and in our businesses, we should be training our current and future workforce to be the next generation of innovators in artificial intelligence. We should be embracing the future, just as Ford did 100 years ago.

Johan Botes is a Partner and Head of the Employment and Compensation Practice at Baker McKenzie in Johannesburg.

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