How technology is changing the shape of your workforce ... and what it means for reward

In the near future, the skyscrapers in the City of London will be built by robots. This is not sci-fi, it is a statement made by Alison Carnwarth, chairman of Land Securities at last month’s Institute of Directors’ annual convention. “Businesses are focusing on [productivity], they want to reengineer how their people can work, they recognise that technology is upon us and is going to destroy thousands of jobs,” she said.

We’ve seen the same shift in the transport sector with fewer or no staff needed on many train systems, equally in farming where machines now plough fields by computer.

The moral question is, what does this mean for human capital within our organisations and within our society? The reward question is: how does it change your reward strategy if your workforce shrinks rapidly leaving a few highly skilled employers running the robots?

Shrinking workforces

To date, the destination for lower-skilled staff has been the call centre, retailer or leisure sector. Again, we have seen these shrink as an employment option with the advent of online and self-service technologies.

What we have seen is the rise of ‘gig employers’. These ‘gig employees’ are the often the product of digital based-companies such as Deliveroo and TaskRabbit which have seemingly sprung up from nowhere to change the working world as we know it.

These start ups (or up starts if you prefer), do not formally employ staff, but instead pay contractors for work done. The contractors are called ‘gig’ workers because, like a music band they can ‘play’ when they want to and for who they wish to. In reality, many are simply doing piecemeal work.

Legislation will catch up ... one day

In time employment case law and legislation will catch up with this swift change. Although most gig workers are at the bottom end of the pay scale, not all are. Your non-exec directors could be seen as gig workers – sitting on several boards or doing more than one-part time job. REBA itself, is primarily supported by highly-skilled freelancers and experienced contractors who ‘gig’ for us.

The rise of the gig economy does mean that the traditional reward package is no longer fit for purpose – or will not be if it does not adapt soon. It is predicted that, on average, a third of workforces will be made up of gig workers in the near future. Has your reward strategy taken that into account? If these people do not currently fall into the HR remit (perhaps being paid by invoice through procurement), I’d ask: what is the point of only offering employee benefits to two thirds of your workforce when your aim is to recruit and retain the best talent? If you do not want those gig workers heading off to work for your competitors instead, now is the time to start considering a new model of reward to encompass gig workers.

Flexible working is good for wellbeing

Linked to this, is the rise of the flexible workforce. These are your permanent employees, but because of technological developments in mobile devices and superfast broadband these people can work whenever or wherever they need to. The Capita Employee Benefits’ Employee Insight Report 2016 released this month flags up the hugely important role flexible working plays in employee engagement and wellbeing. Staff want it and we know it is good for productivity yet too many line managers are scared of it. Digital developments mean it cannot be avoided.

In his new book, Thunder Cloud: managing reward in digital age, Daniel Hibbert takes it several steps further: “The way businesses manage reward has not adapted to changes in the employment relationship and the nature of work in the digital age.” He goes so far as to say: “Reward can easily become a psychological threat if it is not managed well. Reward needs to connect with the types of jobs people are doing and to regain its place as a central part of the way that people are managed.”

Reward and HR managers will be very aware that the traditional reward package is simply not appreciated by too many staff anymore. It needs to change, because it still is very important.

Top of the agenda at REBA’s Innovation Day on 22 November is how the reward function is changing in the digital world we all work in. See the current programme and reserve your place here.

Debi O'Donovan is a director of REBA