23.Apr.2018

The human cost of a tech takeover

A version of the following article appeared in CA Magazine.

The impact of rapid advances in technology is an issue that business cannot afford to ignore. Regardless of your industry or market, technology – whether in the form of automation, artificial intelligence or other innovations – presents seemingly endless opportunities to drive efficiencies and gain a competitive edge.

However, as the make-up of the UK workforce changes as a result, workers may find themselves unable to rely on current employment laws for protection. Employers too need to consider the potential impact of such changes in terms of how they manage their workforce.

The breadth of roles that are likely to be affected by technology is staggering. Businesses may well expect that certain back-office staff, such as data entry clerks, office administrators, machine operators, bookkeepers, cashiers and clerks, will be replaced by machine learning.

However, it is also anticipated that technology will replace some traditional customer-facing positions, including a large number of sales roles.

A recent study by PwC estimates that robots may take up to 30% of UK jobs by 2030. Meanwhile, a separate report by Centre for Cities warns that automation could lead to 20% of roles in Scottish cities being displaced by 2030. That would equate to some 112,700 jobs in Glasgow, 60,800 in Edinburgh, 35,900 in Aberdeen and 20,000 in Dundee.

Businesses should be factoring these considerations into their long-term strategic planning and analysing the likelihood of jobs disappearing or being replaced by technology. Recruitment strategies should be adapted to ensure that “at risk” roles are not backfilled when existing staff leave. It may also be appropriate to consider the need for investment in training for existing staff so that they can perform other roles.

For employees, there are a number of concerns. Take redundancy law for example, which currently protects workers if there is a downturn in business and an employee loses their job. However, if a business is doing well, invests in technology and this results in roles being replaced, the law as it stands would not necessarily provide protection.

Redundancy law is not fit for purpose as it does not take into account a situation where a role continues in broadly the same form, but is carried out by a computer programme or robot. In other words, if I lose my job to a robot, I may be unlikely to receive a redundancy payment. This is important, as it is likely to have the biggest impact on lower paid workers, who need this type of protection the most.

Can a robot be prejudiced?
Another example is in discrimination law. The law will currently provide protection if, for example, an employee is not paid a bonus or is not promoted and that decision is based on gender, race or age, etc.

However, as these types of decisions are increasingly based on input from computer software rather than humans, it will become more difficult to find a solution under the existing discrimination laws; do I bring my claim against my employer or the software provider?

This is particularly relevant in recruitment, where there is already software that will sift applications to create shortlists, and even a robot programmed to interview candidates and make recruitment decisions based on the candidate’s answers and physical responses to the questions.

In this context, it may be difficult for unsuccessful candidates to determine if discrimination has occurred and, if so, who is legally responsible. Discrimination law will need to develop in order to provide protection for employees in situations such as this.

Another matter that organisations will need to budget for is how a technology-reliant business is likely to be taxed in future. If an increase in technology results in a reduction in workforce numbers, as is predicted, unless there are fundamental changes to the current tax regime the UK may see a marked fall in income tax and national insurance revenues in years to come.

This may also be coupled with an increased strain on the current benefits system, unless existing workers are taught new skills to help them remain relevant in the labour market.

The potential introduction of a “robot tax” may sound far-fetched, but there are a number of high-profile supporters of this model, including the Microsoft founder Bill Gates. Under this proposal, robots who are brought in to replace a human role would be subject to the equivalent income tax and social security deductions.

This is a topic that will demand government attention, and potentially fresh legislation, in order to find an effective solution.

Much of the future of the labour market may seem uncertain as technology is developing in multiple directions each day. However, what is clear is that, as the shape of our workforce changes over time, the law must keep pace if employees are to be protected.

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