Last year a group of Australian CEOs pooled their collective intellect and resources to ponder a five- to ten-year scenario: how should they manage the people in their workforce as technology programs eliminate roles through automation?
One possible solution they came up with was to exchange, or loan, employees between member organisations as demand for their skills dialled up or down.
“Sometimes some of our companies are going to have more need for one type of person, and have less need for another type of person,” Lynette Mayne, co-chair of the local chapter of a group known as the B Team, told Which-50 at the time.
“So if I’m automating an area and I don’t need those skills — but one of the other companies needs them — why don’t we give those employees to the other company for that period of time until we have a need for bringing them back into our company?”
Less than a year later that hypothetical question is being tested, as entire industries were brought to a standstill overnight while others faced unprecedented levels of demand and a requirement to transform rapidly to deliver new, socially distant, contactless experiences.
The cause of the disruption was not the expected robot revolution, but a biological force which has infected 5.3 million people, killed more than 340,000 worldwide and crippled huge swathes of the global economy.
Employers, consultants and analysts argue much can be gleaned from the COVID-19 experience about the future of work, providing important lessons on how to reallocate labour when disruption hits and creating an imperative to invest heavily in digital skills.
According to McKinsey, preparing for the “future of work” has gone from a distant hypothetical to a very immediate priority, describing COVID-19 as “one of the biggest destroyers of jobs in human history.” The McKinsey Research found significant overlap between the workers who are vulnerable in the current downturn and those who hold jobs susceptible to automation in the future.
And Forrester research emphasises the jobs market has been slower to recover following more recent recessions thanks to the investments in automation. For example, following the GFC, “In the UK, 25 per cent of supermarket assistant jobs were eliminated due to automation between 2011 and 2017. The aftermath of COVID-19 will be no different,” writes Leslie Jones, Principal Analyst at Forrester.
The Great Exchange
COVID-19 has provided a preview of a future where some roles quickly become redundant, while other areas of the economy can’t hire fast enough.
One solution put forward by McKinsey & Co to deal with disruption is to rapidly build online “talent exchanges” to create transparency on job openings and facilitate redeployment.
“There is an urgent need for transparency on changing demand, growing job opportunities, and information on existing skills that may be underutilised and for better, faster matching between job seekers and employers,” the consultants write.
“Industry associations, labour agencies, and groups of large companies can quickly create exchanges or portals on which employers can post new openings and displaced workers, backed by their existing companies, can find redeployment and secondment opportunities.”
In Australia, a B2B talent exchange was spun up in just seven days at the end of March by Hatch, a student recruitment platform founded in 2017 by The Iconic co-founder Adam Jacobs and Zip co-founder Chaz Heitner.
Hatch has focused on placing university students in paid placements with Australian employers, based not on their limited CVs listing babysitting and flipping burgers, but on their ability profiles, values and motivators.
Early in the year, at the very start of the COVID crisis, the founders knew from their conversations with the companies where they had been placing students that 2020 would not be a normal year.
“What we are hearing is that there was going to be an enormous dislocation of the labour market and that a large number of those organisations were going to have to stand down a very high percentage of their staff,” Jacobs told Which-50, citing Qantas as an example of a company with an early insight into the potential extent of the disruption.
“And then on the other side were organisations where the opposite was true. COVID was causing a surge in demand for them and they needed to ramp up their teams quite quickly. For example, we‘be been working with Woolworths, which very quickly had to ramp up the fulfilment centre, delivery and logistics.”
To help solve a part of this problem the startup created a new site, Hatch Exchange, which identifies stood-down employees’ transferable skills and matches them to new roles, based on the existing smarts inside the student recruitment platform.
The B2B marketplace requires employers to register to facilitate a temporary exchange of workers. The arrangement, Jacobs explained, allows the exchange to provide a hiring organisation with matches in 72 hours.
“We are trying to facilitate a temporary exchange. We’re trying to protect permanent jobs and protect organisations’ IP by allowing people to go work somewhere else for a period of time and then come home again,” he said.
This allows workers to gain new skills in a completely different industry and continue to generate an income with the goal of returning to their permanent job.
“That’s really important because if an organisation like Qantas or David Jones loses 50 per cent or more of their workforce through this crisis, it’s going to set them back years in terms of loss of talent and IP,” Jacobs said.
In the two months since its launch, over 400 employers have asked to join the exchange — either looking for roles for stood-down workers or requiring temporary workers to meet new demand — representing 150,000 stood-down workers. Eleven thousand of those workers have registered for redeployment and 500 have been placed with new employers.
The job seekers are predominantly from industries including travel and tourism, hospitality, retail and the arts, from organisations like Qantas, Virgin, Flight Centre, Crown Resorts, Merivale and Marriott.
More than 50 per cent of the stood-down workers registered on the exchange have more than ten years of professional experience.
“There’s a real mix of frontline workers who have been displaced, but also corporate teams have been displaced as well,” Jacobs said.
WANTED: Customer service skills
One of the organisations that tapped Hatch Exchange to temporarily bolster its workforce is Datacom, a multinational professional services outfit, which found itself urgently in need of contact centre staff to provide services for the Federal Government agencies providing frontline services for the country’s COVID-19 response.
In early April Datacom announced that it would hire and train more than 2000 people to help with demand for government services during the outbreak.
Stacey Tomasoni, Managing Director of Datacom, told Which-50 hiring on that scale would usually take six months.
The candidates were hired from every state and territory, directly and through a number of different partners, including 140 staff from one of Datacom’s clients experiencing a downturn. The new workers have joined from industries highly impacted by shutdown measures such as the airlines, retail and hospitality.
“While you can say they are from very many different walks of life, I think the one thing that is the common thread for all of those people is that everybody was hardwired to service; to be in service of others,” Tomasoni said.
“That’s the type of thing that I think is less easy to train and it was a minimum requirement for us that you had to have the customer focus.”
The labour exchange playing out during the pandemic has newly highlighted the importance of recognising transferable skills.
One of the key lessons Jacobs has taken away from the past two months is that people are more resilient and adaptive than he expected and someone’s transferable skills stand them in good stead to move into a different type of work. For example, cabin crew have transitioned into other roles where they are still running teams or serving customers.
“They’ve been working with customers on aeroplanes for a long time, so it was quite natural for them to still work with customers, just in a new format and a new industry, perhaps in a government call centre or in financial services,” Jacobs said.
Based on the feedback from employers on the platform, underlying traits are also a strong predictor of job success, Jacobs said, noting that high performers will kick goals wherever they are.
“If you’re a performer at Country Road or Flight Centre and now we put you into a totally different type of work in an operations team at an online retailer, you are still a high performer,” he said.
“I think we’ve been getting it wrong all these years as a business community, and I think the rules are changing around how you identify talent.”
Focusing on the information served up in CVs such as job background, title, previous company, qualifications and university are not “particularly reliable predictors of someone’s fit for a job,” Jacobs explained.
An alternative approach to talent management could focus more on traits which are described as: problem solver, tenacious in face of adversity, creative thinker, good communicator, brings people together. All identifiers that are transferable across industries.
Future skills & lifelong learning
The trends playing out across Hatch Exchange have brought into sharp relief the areas where Australia is facing a skill shortage, predominantly along the digital value chain.
In the first month of operating the exchange, Jacobs said the platform saw a big need for frontline roles like more contact centre operators, more logistics and fulfilment centre team members. With the demand for those frontline roles now met, the need is shifting to skills in the technology space — software engineers, digital marketers, programme managers UX designers — as more and more revenue comes through online channels.
The digital value chain doesn’t exclusively refer to technology roles, but the jobs clusters that support a digital operating model. For example, a supermarket’s fulfilment or customer service centres.
Meeting this demand for capabilities will require a greater investment in lifelong learning, Jacobs argues.
“I’ve had calls from over 30 major employers in the last couple of weeks to understand what’s on their mind in terms of the road ahead,” Jacobs said.
“Something that’s really standing out is the need to reskill workforces; both internal workforces in existing employees and external terms to the broader economy to reskill them into the type of capabilities that are going to be in demand.”
To position Australia well in a post-COVID world will require partnering with education providers to build the “kind of capabilities that we need to be a global leader when it comes to the technology space and the digital space.”
“Australia, as an economy, has an opportunity to come through this crisis in a position where we’re more resilient for the future of work, where we’re training our workforce to be more adaptive and to build new skills to particularly be focused on the digital value chain,” he said.
The need for workers along the digital value chain is likely to be accelerated as COVID-19 is widely predicted to accelerate automation, to de-risk operations and cut operating costs.
Research from Forrester argues COVID-19 has made automation a boardroom priority.
“Automation has been a major force reshaping work since long before the pandemic; now, it’s taking on a new urgency in the context of business risk and resiliency.
“The recovery will come. And when it does, the adoption of automation will take on a new urgency in the context of enterprise risk and resilience. Leaders will rethink old ways of tying work to specific locations or types of labour, whether that’s human or digital,” writes author Leslie Joseph,
The research also notes that historically, firms recovering from recent recessions have increased their investments in automation, which has prolonged high unemployment levels.
“In the aftermath of recessions between 1970 and 1982, it took two to six months for unemployment to begin to recover. But in the wake of the three recessions between 1991 and 2009, this process took 17 to 23 months. And these jobless recoveries occurred predominantly in middle-skill, routine jobs due to increased effectiveness of and investments in automation technology,” Joseph writes.