69 predictions about the labour market in 2040

I have been fascinated by the future of the labour market. For me, it started with a book called “Jobshift” by William Bridges, a book that suggested that we would get to a cake layer model. With an elite on top, a middle layer and a large bottom layer of unskilled labour. In some ways, the author was not far off. That was 1995. 

The future is entrepreneurship

I wrote about it before. I think the future is entrepreneurship. Everyone will become gig workers and are entrepreneurs on the labour marketI have had fascinating conversations with Sunil Prashara, the CEO of PMI, about the future of work. Organisations will become super-agile and gymnastic, with a small core of staff and lots of on-demand labour. Combine that with automation and citizen development, and you have a fascinating cocktail of change. 

Hence “The End of Jobs: The Rise of On-Demand Workers and Agile Corporations”

The book maps those changes against power balance, labour regulations, the role of unions and social structure. The conclusion is that regulation and social structure are still in the industrial age. It is high time for an overhaul. We have gone full circle. The word “job” as an employment concept is only about 160 years old. We started as a gig economy in the middle ages, and then we got industrialised, electrified and computerised. We are now in the stage of robotics and AI. Each change did lead to tremendous social upheaval and, in some cases, armed uprisings. The end of jobs as we know it. The end of jobs certainly does not mean the end of work, but rather the end of jobs as we have to come to know them; the “in-the-office, one-manager, nine-to-five” job. With exponential effects, give increasingly less time to people to adapt to the newly required skills (that is why I am a fan of citizen development). The author estimates that jobs lost will be at about 10–15 per cent of all existing jobs. Also, a decrease of about 20 per cent of hours worked across all industries, quite possibly in the form of a four-day workweek.

Fluid

The world of work has changed from the in-the-office, one-manager, nine-to-five model to a fluid, team-based, from-anywhere, always-on model. A convergence of on-demand and full-time labour (the rise of on-demand workers) and total talent management (the rise of agile corporations).

Task-oriented

Work is also getting atomised into projects and tasks. Those projects and tasks have to be done in coordination with other teams. Similar to the movie business, in which hundreds of people come together, make a piece of art, and move on to the next project. Read “The project revolution”. AI will push that trend further. Any work that can be broken into tasks will be. Task-based work is permeating the full-time labour market. In the on-demand world, platforms and companies use algorithms to route the tasks that they assign to freelancers.

Teams

This task-based work has created lots of interdependence. This means work is interdependent, requiring coordination across teams and departments and with outside experts. Tasks necessitate a fluid, team-based approach to work. Fluid, team-based, from-anywhere, always-on work is the hallmark of the world of work today.

Combine that with platforms

An increasing number of on-demand workers receive their work via a technology platform. Currently, that number is between 25 and 30 per cent, and it is rising rapidly. By the author’s last count, there were 248 labour platforms operating in the world today. Making task-based work more and more accessible. 

Broken contract

The lifetime employment contract has been broken. Caused by short term thinking, shareholder capitalism, globalisation and technology. If the average lifetime of a company is 18 years, lifetime employment is gone as a concept. The book refers to IBM, a lifelong employment company (you were a deep blue) that now has 50% temporary employers (light blue). Estée Lauder now has approximately fifteen thousand on-demand workers, and their culture and processes have evolved to allow them to hire the best people, however those people want to work.

Attitude to work

There is also a shift in attitude. Few people still believe their companies have made a lifetime commitment to them, and they have returned the favour. People increasingly want to work in an on-demand capacity. They want the flexibility. They want the variety of projects. Twenty years ago, the term “freelancer” really meant “unemployed.” Today it means “entrepreneur.”Perhaps the biggest difference between employees and freelancers is that freelancers know they have no job security. However, freelancers often perceive that they have more job security than employees. Employees have a single point of failure. You should read “Antifragile”. 

Pensions and health plans

We see the virtual disappearance, outside of the public sector, of the pension plan and health care for life. Trends in longevity and demographics (demographics are destiny) and the current structure of our pensions and health system (pyramid scheme) will make it unaffordable. You are on your own. Time to take control. Again, entrepreneurship is the future.

Some statistics

  • The most recent survey found that approximately 27 per cent of the labour force—forty-two million people—are independent workers.
  • Another report finds that fifty-seven million workers—about 37 per cent of the labour force—are independent.
  • Between 20 and 30 per cent of the workforce is agile (again, similar to our definition of on-demand), representing between thirty-one to forty-six million workers in the US.
  • By 2040, 21.6 per cent of the population will be over sixty-five, up from 15.2 per cent in 2016.
  • According to the World Robotics Association (WRA), today, there are about 2.1 million industrial robots in factories worldwide. This number has grown between 10 and 15 per cent per year over the last decade.

Happy at work

One of the most consistent data points across all the studies and surveys is the satisfaction that on-demand workers have with their work arrangements. Each report found that between 75 and 80 per cent of workers were happy, many saying they would not take a full-time job if offered. In one survey of 12,000 mostly knowledge workers, 50 per cent said they did not get a feeling of meaning and significance from their work. Purpose-driven work will drive entrepreneurship

The book explains the labour equation

Coase identified three types of transaction costs in the engagement of labour. The first is search costs or the friction of finding the right talent. The second is coordination costs, which are the costs of getting that talent to work together. Finally, we have contracting costs, meaning the friction of negotiating the how/where/what of talent work. That equation still applies. There will always be a benefit to companies having full-time employees. But it is shifting. The variables in the labour equation include:

  • The level of intellectual property involved
  • The customer touchpoints
  • Complexity of process
  • Integration with other work and teams
  • Length of project
  • Repeatability of project
  • Ramp-up time—can someone start immediately, or do they need to be trained?
  • The need for institutional knowledge
  • Cost—what is the all-in price, including benefits, office space, and so forth?
  • Regulations

The risk versus cost continuum

Many people believe a freelance worker is 20–30 per cent less expensive because the company does not have to pay benefits. The cost-benefit of using freelancers is almost always due to the utilisation rates, not hourly costs. A freelancer is always 100 per cent utilised because if there is no work to do, the freelancer is not engaged. Full-time employees, however, are rarely 100 per cent utilised. However, freelancers are the lowest-cost option but the highest risk. For example, the leakage of learning, IP, clock speed, etc. 

Predictions

The book covers a number of interesting trends, ideas and concepts, where expert guest writers try to predict the labour market in 2040:

  1. Alumni labour clouds. A system takes all their employment data and augments (with the former employee’s input) the profile on that employee with their skills, projects, customers, and others. 
  2. Total talent management. Software coupled with next-generation HR Platforms are already managing labour assets in one plane and using AI to automate the selection of labour resources and management of tasks.
  3. Nearly all jobs will change as mundane tasks are done by software and robots. This will lead to a decrease of about 20 per cent of hours worked across all industries, quite possibly in the form of a four-day workweek.
  4. An American dividend” of $25,000 for each citizen (a sort of UBI)
  5. Governments capping the total health expenditures at 15 per cent of GDP by 2038 while ensuring that no individual would pay more than $1,000 in premiums, co-pays, or deductibles.
  6. Creation of universal childcare and eldercare vouchers, which allowed the proliferation of a variety of pathways for people to choose care for themselves or their families at a level of payment enough for both living wages for caregivers and offering new noninstitutional choices.
  7. Establishing lifelong education accounts,
  8. The establishment of “The American National Trust” created first by transferring all the existing public and private contributions for health care, in addition to government welfare, child and elder care programs, into the “The Trust,” which acted as a sovereign wealth fund.
  9. By 2040 the standard procedure and organisations will include considering the full range of talent options to execute the work.
  10. By 2040 a significant percentage of traditional colleges and universities will have failed due to financial pressures on their outdated economic model. Read “Post-corona“.
  11. By 2040 most nations around the world will have established new categories of workers, somewhere between an independent contractor and an employee in terms of status. These
  12. Wall-sized 3-D holograms that show your workforce, colour- and shape-coded by geography, type of worker, volume, tenure, cost, and so on.
  13. C-level workforce transformation departments were created, driven by the company’s goals and outcomes of the actual work completed, and produced the ROI.
  14. Reliance on immersive experience technology, continuous self-directed education and certification, and so on to keep us competitive and satisfied in the workplace as talent satisfaction metrics replace antiquated employee satisfaction scores.
  15. Teams with specific assignments will prevail, and AI will be at a point that you will know the makeup of the most productive teams and be able to mobilise and replicate those teams easily depending on the assignment. Teams as a service.
  16. Staffing companies will transform from merely identifying talent and placing the resources to creating custom training programs for employers.
  17. In a future state, salespeople will create a strategic relationship with employers about their talent needs six, twelve, even eighteen months out.
  18. The financial relationship will change—with novel financing tools for education, like employer-paid income. Share agreements becoming the norm to ensure that resources pay for the training they receive.
  19. Personalised algorithmic agents that have the ability to take on tedious “meaningless” tasks.
  20. An increased ability for individuals to see how their work has impacted their lives.
  21. An increased alliance between—and leverage created by—dynamic communities of individual workers who share personal causes, values, and desires.
  22. Meaning created by intelligent agents.
  23. There will be no need for an architect to remember every building code because their personal “building code” agent will be ever-present while they design and can spring into action when the designer needs them. The value of what we today see as experts will be in their ability to be creative and original and not recite history from memory.
  24. Organisational systems and personal tools will track, and index just about everything workers do in 2040.
  25. The worker of 2040 will have powerful tools to see the “overall patterns” in their projects, experience, and careers.
  26. Short-term shareholder capital gave rise to activism and pressure on companies to perform better, faster, and more consistently.
  27. The re-emergence and appreciation of skilled trades. Apprentice-based program to saves skills, like jewellery-making and welding.
  28. The human dimension of work will take significant prominence, and we will see the rise of disciplines, such as psychology and neuroscience, as companies, entrepreneurs, and academics have more intently focused on understanding the complex inner workings of the human mind.
  29. A new category called committed freelancers, who will commit to only one engagement at a time, and I will dedicate approximately forty hours a week to that company. The engagements typically will last six to eight months.
  30. The use of a talent agent to review all work inquiries before they are passed on to a freelancer While you are working on a project, my talent agent will be scouting out my next gig so that I will not have any downtime. Your agent will also be recommending ongoing training classes and introductions to mentors that will help develop your skills and continue to make you more marketable.
  31. We will see people creatively combine a treasure trove of technologies, data, and resources to build their own productive version of an Iron Man suit, giving them the power of independence to pursue their passion and financial well-being.
  32. Traditional retirement won’t be the goal. You’ll invest in new endeavours to keep your skills fresh, and your income diversified, as well as to fulfil your passions and find your purpose.
  33. As skilled independent labour continues to grow, organisations will place a premium not just on the workers themselves but also on the results and successes driven from the projects independents complete.
  34. We’re heading toward a tipping point, one where our present burdens will cause a fundamental shift not just in how we work but also in how we think of social responsibility.
  35. The rise of the maker force.
  36. Savvy independents will team up with each other to leverage relationships, to capitalise on shared intellectual property, and to fractionalise work so that income will be a separate concept from “hours worked.”
  37. The use of algorithms to determine if a candidate is telling the truth, examining vocal inflexion and body language.
  38. Fifty per cent of the workforce will be in freelance, gig, or other agile and nontraditional roles, not in specific jobs working for specific organisation.
  39. 100 per cent of the workforce will be covered by health care and retirement plans that are completely portable
  40. Mandatory retirement will be completely abolished for all but the most safety-critical jobs.
  41. Leadership effectiveness scores for individual leaders and leadership teams will be as commonplace and transparent as Yelp ratings.
  42. Technology-enabled work and workforce—expertise in and comfort with algorithms, artificial intelligence, and automation as well as human-machine collaboration will permeate nearly every industry, skill set, and functional discipline.
  43. In 2040, leaders will distinguish themselves more through their savvy about external trends and dynamics (competitive landscape, economic and social challenges, and other forces of change) than through their deep knowledge of their organisation’s internal environment.
  44. Networks, Not organisations—in 2040, organisations as we traditionally define them will have largely been replaced by networks as the foundational operating model for how and through whom work will get done.
  45. Segmentation, not sameness—in 2040, the workforce and customer base will be significantly more diverse than they are today.
  46. Orchestration, not expertise—in 2040, most leaders will become leaders because they are great at orchestrating cross-functional, multidisciplinary solutions to big complex problems.
  47. Ready able, not ready now—in 2040, talent strategies and succession planning will no longer be aimed at identifying and developing leaders who are “ready now” to move into their next roles. Instead, the leadership succession pipeline will primarily be filled with leaders who demonstrate readiness for the ever-changing world of work.
  48. Jobs will be listed by skill sets, not title, and while titles still exist internally, they play almost no role in hiring.
  49. The idea of a nine-to-five workday is almost completely a relic of the past. Flexible schedules, remote offices, and short-term, multiuse spaces are the norm.
  50. Advanced screening software and the mechanisation of job applications have fostered the growth of creative intermediary programs.
  51. Empathy, critical thinking, creativity—that’s what makes us human, and it will take a very long time for technology to be able to replicate that.
  52. As people disperse and societies become more decentralised because of this new freedom in work, we’ll end up with pockets of people who are purpose-driven.
  53. Education as nearly completely virtual yet world-class by any measure illustrates the power technology has had on redefining entire societal institutions. Every day, collaborating with students from around the world on nearly every assignment and visited countries and cultures across the planet, leveraging cognitive, perceptual, and full-body immersive virtual reality.
  54. For AI to serve humanity brilliantly and unleash its full potential, the algorithms and machine-learning frameworks needed to absorb as many inputs and perspectives as humanly possible.
  55. The world will naturally become more curious about one another. Judgement and infighting gave way to curiosity and compassion.
  56. Smartphones reading facial expressions and cross-referencing that information with location data. Machine learning will tell us which places made us the happiest and recommended places to explore based on how happy we were within various environments. AI will begin to tell us what activities made us happy.
  57. AI transforming gig work from a smattering of on-demand roles to a cohesive career path supporting personal purpose, upskilling, reskilling, differential learning, and happiness.
  58. There will be more emphasis placed on cultivating and identifying leaders who have high emotional intelligence (EQ), a bias toward being inclusionary, high morality, and the ability to guide their teams, allowing the best thinking to emerge.
  59. Future leaders will also be charged with creating a wellness environment for their teams where learning, success, and failure without impunity can happen. Their embedded style of collaboration, fairness, social awareness and confidence will be needed in leadership more than ever in the history of work.
  60. In twenty years, if not sooner, careers will be more like the artist creating a work on a blank canvas; it won’t be confined by structure, as in career ladders, but will be more fluid, like that of a climbing wall. Read “Big Magic“. 
  61. The workforce will be more global, more diverse, and more interconnected than at any previous point in history.
  62. Conventional leadership models will be challenged in this asymmetrical, black-swan environment, forcing new thinking around how to lead and how to develop future leaders.
  63. There will be a mixture of permanent employees, temps, freelancers, robotics, and vendors, all working seamlessly on tasks and projects that will be determined and dispatched through an AI engine.
  64. In the future, AI engines providing senior leaders, at the push of a button, with real-time snapshots of their entire workforces with all the relevant data (competencies, capabilities, performance metrics) they need to pinpoint individuals for development who align to organisational needs.
  65. There will be fewer and fewer managers of work. AI will take over most of what is known today as managing the workforce.
  66. The workplace of tomorrow involves the rise of humanity placed firmly in the centre of the employee experience. There will be a simple shift in thinking. That shift is about caring. Caring, genuinely caring, about employees. By 2040 it will be commonplace to care. Authentically and sincerely caring about one another in the workplace.
  67. The evolution that is underway now, and will unfold over the next twenty years, is that employees will tolerate nothing less than supervisors, managers, leaders, and executives who care about them.
  68. By 2040 the rise of humanity in the workplace will have finally risen to a new level—one where fairness is not optional, humanity and heart matter just like a healthy balance sheet, and organisations understand that going from good to great can’t happen unless you care.
  69. A systemic shift from a firm-centric legal framework to an individual-centric legal framework. The solution is not to create a third category of worker that is partially an employee and partially an independent contractor, as some have proposed, but to make the question of worker status irrelevant in the first place.

Utopia?

There is no question that the labour market will change. The consensus that it will change for the better, with some upheaval. Leadership and organisations will have to adapt, and purpose, well-being and entrepreneurship will go hand in hand. Some of the predictions are utopian. As anti-book, it might be no harm to read “The shift”. Or read “Jobshift”. You want to be on the top of the pyramid, and I am betting that entrepreneurship is the easiest way to get there.

sensemaking cover

WHY REINVENT THE WHEEL AND WHY NOT LEARN FROM THE BEST BUSINESS THINKERS? AND WHY NOT USE THAT AS A PLATFORM TO MAKE BETTER BUSINESS DECISIONS? ALONE OR AS A TEAM.

Sense making; morality, humanity, leadership and slow flow. A book about the 14 books about the impact and implications of technology on business and humanity.

Ron Immink

I help companies by developing an inspiring and clear future perspective, which creates better business models, higher productivity, more profit and a higher valuation. Best-selling author, speaker, writer.

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