“Working from home” is a just a euphemism for higher productivity

Watch high quality movies at ImovieSh.com, courtesy of Sil Silv
“Watch high quality movies at ImovieSh.com.”  Photo courtesy of Sil Silv.

When juggling your commitments, you may have spent time reflecting about what is truly important to you. Are your many hours at work meaningful for your personal growth and the home life you desire? Thankfully, there is a mixed blessing available for those who want better trade-offs: the option to work from home.

There is a lively debate about the virtues of working from home, and we all know why it’s controversial. You have the freedom to alternate between hard work and lazy selfishness in a manner that makes you feel guilty and sheepish. Am I the only one who washes bedsheets while I’m trying to figure out how to solve a work puzzle? I feel bad about the housework, but I forget to take credit that my brain is fully engaged in work.

The Case For Working From Home

The case in favour of working from home comes from a study that was summarized nicely in an article by Bill Murphy Jr. at Inc.com. Murphy reviewed a study of call centre employees in China who participated in a 9-month pilot. The employer randomly-selected one half of the pilot group to work from home while the others came into the office. Call centres have great tracking systems to measure productivity, so they were able to analyze the impact.

The gains from working from home were many. Employees who worked from home saved the company $2,000 per year in office space. They put 9% more time into productive work hours. They were 14% more efficient with their time, taking fewer breaks and less sick time. Their turnover was 50% lower.

The masters of productivity would be proud of them.

The Case Against Working From Home

Of course, working from home is not always the best way to collaborate. Over at the Atlantic, Jerry Useem advances evidence that working face-to-face is better for collaboration. He cites research by Judith Olson of UC Irvine who worked on an experiment with Ford in the late 1990s that put software developers in a war room. It was called “radical colocation.” The close-proximity teams completed their work in one third of the time relative to other groups. In another study, a simulated cockpit crew in a crammed space were able to able to communicate a major issue in 24 seconds through hand motions and non-verbal utterances. Face-time and direct communication can be critical for efficient teamwork and collaboration.

The Best Decisions are Sensitive to Context

What is notable is that the evidence twists and turns depending on context. Call centres are all about the dynamic between the employee and customer, so collaborations with work peers might be unimportant. By contrast, work that is built around face-to-face communication demands proximity. This would not be the first time that the research on optimal workforce practices concludes that it depends on the context of the business and the mindset of the individual employee.

That research Murphy cited was a paper entitled “Does Working from Home Work?  Evidence from a Chinese Experiment”, by Nicholas Bloom et al, a working paper from the NBER from March 2013. I gave it a closer read, and there was a lot of nuance not picked up by the business press.

For example, commuting distance had a big impact on productivity differences. Those whose commute time was more than two hours per day saw dramatic improvements in their productivity when working from home. This finding is consistent with a theory in labour economics called the labour-leisure model, that suggests people start with an endowment of weekly hours and make trade-offs between their personal life and work life. Commuting subtracts from the hours-endowment, and if you give those people the option to work from home, they will apply more hours to their work and also to themselves. The interests of work and home are not in dichotomy if both are sabotaged by commuting.

During the experiment, people had been assigned to work from home on a randomized basis. When employees were given the opportunity to choose, half of them chose to come to the office instead. They were rightly concerned they would be passed over for promotion. Employees working from home were 50% less likely to receive a performance-based promotion, which is outrageous when you consider they were more productive. They were “out-of-sight, out-of-mind.” I see a side-story about the social contract.  The employer figured out how to spend less money on office space and stop promoting their most productive people, and several employees said “no thanks” and started showing up at the office again.

About 10% of the people who had not volunteered for the experiment chose to work from home after the pilot was opened-up for wider participation. Once it became increasingly obvious who would benefit and who would be disadvantaged, several people still chose working from home. This outcome highlights the immense impact of giving people autonomy over how their work lives should be organized. Any two people could make decisions that go in opposite directions, based on their unique preferences.

May of the employees who chose to return to the office after the experiment rightly perceived that they were less productive when working from home. When those employees started working in the office again, this self-selection had a contrast-effect on the more-productive workers who continued to work from home. During the experiment home-workers were 14% more productive, but once self-selection was permitted home workers were 25% more productive. The impact was almost doubled.

Human Nature Out-Ranks The Logistics

I think it’s important to flag that autonomy in itself had a positive impact that was about as important as a comprehensive workplace redesign. That is, executive decision-making struggles to prove its worth against the impact of a positive workplace culture where people can self-select into higher productivity.

One of the main drivers for increased productivity was that people working from home worked when they were slightly ill. I have to confess, I have done this myself. Partially-sick work-from-home days are win-win for employee and employer. This practice reduces office contagion, gets a mostly productive work-day from the employee who might otherwise be doing nothing, and gives the employee some control over their guilt and workload.

When sick, people need the comforts of home to get well and stay well. Maybe a family member will bring them a nice bowl of chicken soup that gives them a sense that all is right in the world.

But there’s a catch.  Young people who live with their parents don’t want to work from home.  When people were free to choose, these young people came to the office in order to escape their family.  Thanks for the soup, mom, I love you dearly.  But would you please stop telling me how to format my presentations, deal with the workplace bully, and get along with my colleagues?  I need to choose my own life.

[This is a re-post of an article from May 14, 2018]

Hey introvert, maybe you are the leadership type

Secrets Left Untold. Photo courtesy of Aaron Stidwell.

When someone steps forward in a manner that sets themselves apart from the crowd, are they a natural leader?  Natural leader, maybe.  Better leader, perhaps not.  Quiet people can be better at leadership.

A gentleman named BG Allen has pulled together a compendium of resources on the topic of introverted leaders.  For those of you who are unfamiliar with Susan Cain’s blockbuster TED Talk on the Power of Introverts and related book, introverts are reluctantly being put into the spotlight as potentially great contributors to society.  Introverts are being overlooked and misunderstood because they are in the minority and the nature of their difference reduces the likelihood their views will be heard.

Allen has found multiple sources that get into the unique contribution of introverts as leaders.  I tried to find if Allen had written a book about this.  He hasn’t, but an Amazon search on “introverted leader” reveals a dozen books on the topic.  There are great articles in Allen’s compendium, from Fast Company, Forbes, and Psychology Today.  The Psychology Today article cites studies showing that introverted leaders that are not just adequate, they can also be superior leaders. 

Although I am an extravert, I have personally benefitted from strong introverted leaders over the years.  You might have experienced the same thing.  When we are at our very best, we come from a strong sense of internal strength, knowing our values and thoughts with a clear sense of introspection.  I look up to the strong introverts in my life who seem to be the masters of this internal journey.  It would be a good thing if we could cultivate this virtue in teams and in society by putting introverts in roles where they can lead by example and help others develop this strength.

As I aspire to be a better leader, I find that I’m a little bit stronger when I hang back a little and let others talk.  I’m more clear-headed if I wonder why I think the things I think.  And I can cause others to be stronger by taking care to understand what’s going on inside their own head and heart, independent of what sprang into my own mind seconds ago.

I think this emerging evidence of introverted leaders is best understood when you think of who are the very worst leaders.  The very worst leaders are those with poor emotional intelligence, bullies, narcissists, people who value their own excellence first and negate the contribution of juniors, and most importantly those who get ahead by smooth-talking their way into the next promotion.  These personality vices are often the mark of the extravert.  In order for an extravert to become increasingly excellent at leadership they must avoid these pitfalls, seek solitude, and look inside themselves just a little more often than comes naturally to them.  Just pretend to be a little bit shy, and you might achieve greatness.  And if you’re already like that to begin with, be proud about it.  And tell somebody.

[This is an edited re-post of “Then The Introvert Spoke, And It Was Good” from November 16, 2017.]

Sensitivity, the invisible superpower

superhero-2503808_1280. Creative commons from Pixabay.

Ever notice how some people are extra-careful about choosing the right lighting for a room, deciding what tone to use when they speak, or trying to eliminate small errors in final reports? It turns out that people like that have different things going on in their brains. And there is a name for it: A Highly Sensitive Person. Such people bring unique value to the workplace when they are understood and can put this strength to best use.

What is a Highly Sensitive Person?

The Highly Sensitive Person (HSP) is a bundling of personality traits identified by Dr. Elaine Aaron beginning in 1991. The Highly Sensitive Person website, book, and related movies and workbooks teach people how to self-identify and manage their unique situation. Among other things, the highly sensitive person has the following traits:

  • Easily overwhelmed by bright lights, strong smells, coarse fabrics, or sirens.
  • Notice and enjoy fine scents, tastes, and sounds.
  • Make a point of avoiding violent movies or TV.
  • Make a point of organizing their lives to avoid overwhelming situations.
  • Have a “rich and complex inner life.”

Being highly sensitive is common, found in 15-20% of people, and is innate. A sensitive person’s outward behaviour is often confused with introversion, shyness, or being inhibited, each of which is a different thing. Often a sensitive person is told “don’t be so sensitive” in a manner that deems the trait abnormal and impacts their self-esteem. For this reason self-assessment, self-description, and self-determination are key to wellbeing.

Highly Sensitive People use several parts their brains quite differently, according to Andre Sólo in an article in Psychology Today from January 2019. The ventromedial prefrontal cortex connects emotions, values, and sensory processing. High sensitivity turns up the dial of this part of the brain, increasing emotional vividness such that some experiences have a much greater impact, subjectively.

The Human Rights Implications of Being Sensitive

These intense experiences are real – not imagined – in the mind of the sensitive person. The perception that an experience is dramatic is true-for-them, regardless of whether less sensitive people feel that way. We don’t get to collectively dictate the sensitivity norms of the group and downgrade the significance of the individual. Rather, the proper collective view is that we all experience vividness in different ways and we need to accommodate these differences. And that means there’s a little extra work in making things okay for the person who is sensitive.

Although there is not an explicit duty to accommodate under the statutes, the challenge here is that we are considering how someone was born and whether they can choose to be any different. Since the Highly Sensitive Person is in a genetic bind, it seems considerate to put in an effort to accommodate them. Indeed, if you’re thinking about how you would want to be treated if you were in their situation, you’re getting a feel for what this sensitivity is all about.

Amongst the things you can be sensitive to is the emotions of others. Highly SensitivePeople have more active mirror neutron systems. Using your brain’s mirror neurons, Sólo describes that you“…[compare] the other person’s behaviour with times when you yourself behaved that way – effectively ‘mirroring’ the other person to figure out what’s going on for them.” This mirroring “allows us to feel empathy and compassion for others.”

This empathy takes us out of the realm of differences (often a euphemism for having a flaw) and into the possibility of superpowers that can save the day. Consider the many ways in which having greater empathy can make things better. You can catch small insults, say “hey, be nice”, and if you were at fault you could patch things up with a considerate apology. Maybe you can put together small pieces of information and realize that someone needs help, and solve problems without people asking for help.  And if you were selling something, you could read who was not buying and who was a promising prospect.

HSP’s become more conscious in a social context, such that other people pop up on their radar more significantly.  For the HSP,

“Your brain is fine-tuned to notice and interpret the behaviour of everyone around you. If someone is bad news, you know it. If someone is not going to treat you right, you see it coming. And if a situation isn’t right for you, you know that, too.” (Sólo)

Greater awareness of the social context means sensitive people act as the canary in the mine who can give early warning that something is not right. It’s a double-edged sword, as it can make a person warm, caring, and insightful. But in the workforce, such people may need to also back away from labour relations conflict, physical hazards, and corrosive leadership styles. But then, perhaps workplaces need to universally strive for harmonious labour relations, the minimization of physical hazards, and the curtailment of bullying? Could it be that feedback from sensitive people puts everyone on track for greater effectiveness and wellbeing? Perhaps we could all increase our willingness to be caring and insightful, to explore a rich inner world, and organize our lives and workplaces to reduce abrasive and unpleasant social interactions.

It may be harder to assert that sensitivity is important than it is to assert the inverse. That is, that insensitivity is a liability, and behaviours that come from deliberate insensitivity must be flagged as inappropriate. Thumbing noses at sensitivity can be an early indication of sexism, bigotry, bullying, and abusive leadership styles. Sensitivity cannot be a small thing if its opposite is regarded as a major problem. Therefore, compliance needs to make interventions on his very important issue. 

How To Get the Most Out Of Being a Sensitive Employee

Let’s return to the upside of the situation.  Many people regard sensitivity as a great asset in the workplace. In a Forbes article from November 2016, Melody Wilding asserts that “…managers consistently rate people with higher sensitivity as the best performers in their organizations.” Wilding’s article, addressed to the sensitive person, describes five ways you can get the most out of this strength:

  • Have confidence in your communication skills. Sensitive people are “attuned to subtle gestures and tone” which means you hear more than just the words that people are saying.
  • Speak up if others have missed something. Sensitive people can spot things that don’t add up, picking up on overlooked risks or subtle details about job candidates. These almost-overlooked tidbits will be new information, and businesses pay big bucks for new information. 
  • Jump into teamwork. The ability to stay attuned to the team’s mood increases a sensitive person’s ability to identify the upsides and downsides of team efforts. So yes, you can increase the flow of information and nuance in team communications, which is great. However, this sensitivity also makes it harder for the person to come down with an authoritative decision, as you will need to bring the whole team along when arriving at a final decision. There is a subtle sub-plot, that authoritarianism might not be the best leadership style for you.
  • Use your creativity to solve problems. Because sensitive people have rich inner worlds, “this can lead to fascinating breakthroughs, innovative solutions to problems and a unique sense of clarity…” I don’t think it’s the sensitivity itself that causes creativity. Rather, it’s a three-step process: hang back, listen to yourself, produce intuitive outputs. Sensitive people are far more experienced at this. That means their creativity is a strength that can be leveraged by the larger organization.
  • Prepare for stimulating situations. As a survival technique, sensitive people need to think-ahead how they will respond to tough questions and difficult situations. If they wing it and things take a turn for the worse, sensation overload can cause them to be overwhelmed, freeze, or draw a blank. As with creativity, it’s another three-step process. Sensitivity increases the personal consequences of poor planning, so they must plan, and their planned responses are better as a result. Desperation provokes the intrinsic motivation to develop planning skill. It’s a dystopian sci-fi future-of-work kind of skills growth… adapt or be savaged.

Wilding’s recommendations are compelling because they give the sense of how someone with a unique trait needs to not just survive but also leverage their superpower for best outcomes. Being “the best you” means you need to identify what’s different about you, choose to be the real you, and figure out how you’re going to rock it in a way that others may not anticipate or understand:

“As a highly sensitive person who experiences strong emotions, you might feel like you’re carrying a heavy load at times, especially at work. But the truth is you likely have a huge amount of untapped value to share with your co-workers, clients and in your career as a whole. It’s time to start viewing your sensitivity for what it is: your greatest strength.”

Not normal is now normal and more productive

Day 42, Hannes. Photo courtesy of A. David Holloway.

It’s the research you’ve all been waiting for: nobody is normal. You might think I’m trying to reassure you that you’re normal-enough to be accepted, but no, that misses the point. Everyone is unique and weird in their own way, and this is what allows everyone to function at their best as individuals.

The study is by Avram J. Holmes and Lauren M. Patrick, under the title “The Myth of Optimality in Clinical Neuroscience.” Trends in Cognitive Sciences.  Feb 20, 2018.

The authors were looking at the complex environmental circumstances under which mental illnesses develop. There is an emerging effort to develop broad datasets that isolate what causes someone’s brain-function to diverge from the ideal mental state. In the process, they tried to define the ideal mental state. About that: there’s not a single ideal mental state.

“We challenge this concept… arguing that there is no universally optimal profile of brain functioning. The evolutionary forces that shape our species select for a staggering diversity of human behaviors.”

At Inc.com, Jessica Stillman notes that “…for all but the most obvious maladaptations, there is almost always a mix or good and bad results from any given variation.”

“Take anxiety, for instance. …science shows that anxiety is probably keeping you safer, pushing you to be better prepared in important areas of your life, and improving your memory, even if it often doesn’t feel good… Or look at risk taking. If you’re a little further on the fearless end of the spectrum, your chances of suffering some life-threatening mishap are likely higher, but so are your chances of starting a world-changing company. Our strengths and weaknesses are intimately tied together.”

This research confirms what has long been understood from folklore, the humanities, and the school of life: everyone is different and we need to honour and cherish these differences.

Now that there is data to back it up, can we assert this wisdom more boldly? I think we can and should. There are profound implications for emerging workplace issues such as equity and inclusion, work-life balance, wellbeing, and performance management.

Equity and Inclusion

The research brings depth to the thinking around equity and inclusion.  Looking at demographic traits is one window into the ways in which totally arbitrary types of people get ahead while others are left behind. If we want everyone to be at their best, we must strive to open our definition of what “best” looks like, be it sex or race or personality profile. If there is a “type” who is tapped or favoured because they fit the mold, we need to step back and consider if we are being drawn into a bias, be it conscious or unconscious. We need to look beyond types, consider the individual, and brace ourselves for plenty of surprises about who’s going to rock it, and how.

Work-Life Balance

There are also implications for work-life balance. As employees go through major life events there may be special moments when they are a perfect match to your workplace. But their home lives are important, and personal lives beckon for time, attention, and commitments.

Striking the balance is key in supporting employees to show up in their best form and deliver their best strengths. That balance hinges on allowing everyone to be themselves both at work and at home. Sometimes an employee’s personality brings favourable differences in what they can deliver at work. And sometimes an employee makes decisions in their home life that allows them to be their best at home. Don’t make them choose between the two, they’re busy being themselves.


With wellbeing efforts, every high-functioning workplace needs to evolve beyond claims-cost-reduction and mandatory anti-bullying courses. If a workplace has developed a strategic and holistic sense of why they are advancing wellbeing, they are likely to happen upon the World Health Organization’s definition of mental health. That definition emphasizes that to feel “well” people need to realize their potential, work productively, and make a contribution to their community, among other things. How could that be possible if the corporate standards of performance disregard the unique ways in which each person is exceptional?

Performance Management and Competencies

This research raises questions about performance measurement against prescribed competencies. Yes, employees need to deliver outputs at the right levels of quality, cost, and timeliness. Yet the more specific we get about the kind of excellence expected, the narrower the opportunities for people to excel.

Competencies were originally put forward as a cutting-edge practice that blended skills and attitudes that employers wished people would deliver in their style of daily work. Competencies allowed employers to get beyond people-as-machines applying skill and effort to the tasks specified in the job description. But there is a flaw. Top-down descriptions of desired competencies undermine the ability of individuals to define their unique strengths from the inside-out.

As people put themselves forward we need to accept them warts and all.

If people are to flourish they need to be coached to identify their unique talents, develop their own learning objectives, and deliver work in a way that allows them to grow into their exceptionalities. We need to recognize what is great about each person, anticipating that there may be a downside. As people put themselves forward we need to accept them warts and all. In order to develop people for their best growth we need a workplace culture of trust, sympathy, and encouragement.

By contrast, exercises where we score people against a half-dozen competencies sent down from corporate seem hopelessly archaic. Allowing a privileged few to define themselves as excellent and encourage others to play along seems narcissistic and biased. And telling others to achieve work-life balance and wellbeing according to the standards of those with power reveals an antipathy for wisdom.

So spread the word: everyone needs to get their freak on. If people can know themselves and be themselves, they’re far more likely to deliver the goods.

[This is a re-post of an article from April 3, 2018]

How to correctly work with bleach and unions

Milwaukee Public School Teachers. Photo courtesy of Charles Edward Miller.

I know you’re terrified to use bleach on your clothing. You probably destroyed a cherished garment a decade ago. Never again, you said. But bleach damage is a result of using bleach incorrectly. And if you follow the instructions, bleach can overwhelmingly improve the value of your wardrobe. Let me explain.

Instructions say use one cup of bleach for a single full load of laundry in a large or high-efficiency washer. If washing a half-load of laundry, scale down to half a cup of bleach. You need a measuring cup that you only use on bleach. Pour the bleach into the receptacle that says “bleach only” at the beginning of the load. Do not throw it in on top of the dry clothes. Don’t use Oxy-Clean in the same load, as chlorine bleach and Oxy-Clean cancel each other out. Then add your other detergent, press go, and that’s it. Now you “know how to use bleach.”

People Fear Bleach For Nonsensical Reasons

The 400-page book Laundry by Cheryl Mendelson – which is a delightful read – spells out a number of misconceptions of bleach. Garment labels are required by law to give instructions on how to wash clothing while causing no damage to the garment whatsoever. To prevent lawsuits, instructions are overly-restrictive in a practice called over-labelling. The most common type of over-labelling is to prescribe non-chlorine bleach (e.g. Oxy-Clean) or that you use no bleach whatsoever. I only obey this instruction with dark garments. Loads of whites, greys, or colours are all made better by bleach.

Concern about damaging garments is misplaced even if it were true that garments are harmed. Consider if bleach damaged your garment by 1%, which is enough to mandate prohibitive labelling. If you only bleached the garment three times ever, you will have lost 3% of the garment’s quality. Compare this outcome to the effect of ugly stains that prevent you from wearing a garment. In that case, the damage is 100% because you are avoiding the use of bleach. Not using bleach is, in this case, far more damaging as using bleach regularly. If you destroy the garment, you are no further behind, because it was destined for the garbage in the first place. There is no downside to destroying a garment with bleach, if you were never going to wear the garment because of a stain. So move on with your life and put bleach to its proper use.

Bleach and Industrial Relations

A lot of managers and human resources professionals are perplexed and intimidated about how to deal with unions. This looks strange to those experienced with unions because, although some things are complex, the basics are extremely simple. When you are dealing with a labour relations puzzle the first question is almost always; “what does the collective agreement say?”

This is where things go completely sideways for a lot of people. First, there are people who did not personally sign the collective agreement, who wonder why they are bound by it. But they don’t question invoices from utility providers, contracts with clients, or precautions imposed by risk management. Only the contract with the union faces this faux-bewilderment for which the acting quality is well below community theatre. Questioning the basic legitimacy of the collective agreement says more about the questioner than it says about unions.

Admit it, you’re only pretending to dislike unions in order to curry favour with someone powerful. But real executives think that a deal is a deal and that unions are simply one of their many bargaining partners. Move on.

The second challenge is those collective agreements are a type of instruction manual. A large percentage of the population never reads instruction manuals. Consider how many times you retrieve a box from the garbage so you can read, then re-read, the instructions to heat a frozen meal. It ought to be embarrassing but instead, we have hip internet memes where we all get to laugh at ourselves, collectively, that we can’t read instructions. But it’s not ha-ha funny. We’re laughing at how stupid we are, collectively. Safety in numbers. But if you want to get the job done, stop laughing. The union isn’t laughing. Instruction manuals aren’t funny.

In brief, if you are a manager in a unionized environment and there is nothing in the legislation or the collective agreement that inhibits your use of power, according to the rules you are allowed to do as you please. It’s called management rights and it’s biased towards the discretion of the manager. A manager even has the right under industrial relations law to do things that are contrary to the employer’s interest, disobedient to that manager’s superiors, and contrary to any measure of professionalism or competence.

But there’s one catch. If you don’t read the instructions, you might be barred from doing something incredibly basic. And that will make you look ridiculous.

As with the use of bleach, so-to with the use of authority in a unionized environment. Bleach and unions are both practical tools to achieve the desired outcome. They are to cause good where intended, act as a remedy to a precise problem, and have the side-effect of causing harm to those who are negligent. You are not being asked to apply high intelligence. Rather, you must take care that you follow the written instructions, be diligent and prudent in your handling of the active ingredient, and make regular use of this skill-set so that you don’t get sloppy.

Remember, when putting bleach in your wash basin you have the goal of getting the laundry done. So too, when interacting with a union you have the goal of achieving business goals by providing direction to staff. If you make the caustic agent something that you fear, neglect, and refuse to interact with, you will gradually lose the freedom to step out into the world looking your best. Stains will gradually destroy your favorite garments, while labour contempt erodes your confidence to advance brave and respectful leadership.

So get over your arrogance and fear, and read the instructions. It will make your willpower look bright and fluffy.

Not too shocking – those high numbers for job disruption by technology

static halo. Photo courtesy of Bridget McKenzie.

Can you think of a time you took advantage of a new technology, and in the process came out way ahead? You’re going to need plenty of stories like this in order to take full advantage of the future of work.

I’ll never forget my first exposure to a pirated version of Microsoft Excel. I was in graduate school in 1994 and a young woman in my class, Bev, handed me a stack of eight floppy disks held together with a blue elastic band. She told me Excel was way better than what I was using. Six months later I had finished an entire graduate thesis based on clever charts and tables I had created using new software. Six months after that, I was at a firm in one of the towers in Toronto’s downtown core with experienced consultants lining up at my cubicle, waiting for some solid analysis. My mind had co-evolved around the technology, and I was valued.

For many months I was the only analyst on a team that had four consultants. When new technologies are brought in, sometimes one person can do the work of several peers. And this appears to be a concern today with incoming technologies, such as artificial intelligence, internet of things, and analytics.

Reports of Technology Eliminating Jobs Are Greatly Over-Stated

There has been some excitement lately about McKinsey’s report that 800 million jobs will be eliminated worldwide by technology. Reading the content of the report – not just the media coverage – I can assure you that it’s far less dramatic.

First, the 800 million jobs was the upside of a forecasted range, and the authors recommend considering the mid-point of the range, which is 400 million jobs. Those 400 million jobs are proportional to 15% of current work activities in the global labour market. These job losses are not expected to be immediate, as this is a forecast into 2030 – twelve years from the paper’s date of publication. This means the forecast is closer to 30-35 million jobs lost per year, which seems far more modest on a planet with 7.6 billion inhabitants.

But it gets better. Of the 400 million jobs lost, only 75 million jobs will be eliminated altogether. The remaining job losses will be in cases where parts of our jobs will be eliminated. About 30% of “constituent” work will be automated for 60% of occupations. That is, there will be bots taking care of the more mundane parts of our jobs. It remains to be seen whether this shift will result in 30% less employment, or if our outputs will just be more efficient. There may be a line-up at your own desk, with senior people increasingly reliant on your own unique, human-machine hybrid.

Is it Technology or Globalization That’s Eliminating Jobs?

This technological revolution will have more dramatic impacts on industrialized economies such as Canada, the U.S. and Europe. New technologies have a cost of implementation, and cost savings are needed to justify the investment. A lot of cost savings can be found in eliminating expensive jobs. But in the developing world, wages are lower and the gains of the new technology won’t always outweigh the cost. The trade-offs between hiring people and bringing in new technology often tips towards employing people in those places where wages are low. It’s in the industrialized world where we will see the most change.

In my opinion (not necessarily McKinsey’s), this will have an impact on political optics. Jobs will appear to be eliminated in industrialized economies and then magically reappear in the developing world. But the back-story is that technology allows work to be done with fewer employees and more machines in industrialized countries. And those western workplaces will have competition from countries where it is not optimal to bring in new technologies. The jobs created in developing countries will look like the same jobs that used to exist in the West. But that’s not what’s going on. Developing economies are just briefly immune to the more-expensive technology, for as long as those countries have low wages.

McKinsey also reviewed the history of technological change and found that there tends to be a net gain from new technologies. The technology benefits someone — the buyer, investor, or some new profession or trade. That someone spends money in a manner that creates different jobs, often by taking advantage of yet another new technology. Those 400 million lost jobs are likely to be only the downside of a net-gain from technology.

Development and Social Supports Needed to Remedy Workplace Change

This raises the difficult issue of things getting better on average. As I described in an earlier post, if one million jobs are eliminated and a million-plus-one jobs are created, this is a net gain of one job. In the minds of economists, this is considered progress. However, looking at the blow-back from voters in industrialized countries, it appears that we must now pay very close attention to the millions who were on the downside of this net gain. And perhaps you know some of these people.

McKinsey was all over this issue:

“Midcareer job training will be essential, as will enhancing labour market dynamism and enabling worker redeployment. These changes will challenge current educational and workforce training models… Another priority is rethinking and strengthening transition and income support for workers caught in the cross-currents of automation.” (p. 8)

Within the human resources crowd, we are experienced at either enduring push-back from unions, or anticipating labour’s response with meaningful policies and initiatives. But regardless of whether you are sympathetic to the underclass, or just trying to implement a new technology as quickly as possible, you can see that society’s success at adapting to this change will hinge on the personal experience of those who have lost.

Looking around us, it seems like we are all trying to get our footing, trying to figure out for that one special thing that sets ourselves apart. You might not be told ahead of time what that thing should be. In fact, you might need to figure it out entirely by yourself. But those who are always working on their angle will have a better shot than those who are relying on prior wins.

Sure, there might be an employer who is loyal enough to set you up for success, or a program or union that will help with the job transition. But as we take turns eliminating each other’s jobs, you might want to hold onto a dash of selfishness. If you can bot-boss your way into a superior level of productivity, you might become that one valued employee on the upside of a turbulent net-gain.

Either as a society, or as an individual, you need to write yourself into a story where you reached for the power cord and taught the corporate machine to work for you.

[This is a re-post of an article from March 8, 2018]