Rethinking the workplace: Flexibility, fairness, and enlightened automation

“People aren’t powerless in the face of new technologies; the future of work is up to us.”

Here is a brief excerpt from a transcript of a lively conversation during which James Manyika and Matthew Taylor discuss that subject for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.

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What sort of workplace should we expect in the future? How will automation affect jobs? How benign is the so-called gig economy? And what will it take for governments and companies to create “better” work? James Manyika, chair of the McKinsey Global Institute (MGI), sat down recently to discuss these and other issues with Matthew Taylor, chief executive of the London-based Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), following publication earlier this year of an independent review of employment practices in the modern economy, which Taylor led.1What follows are edited excerpts from their conversation. (An extended video feature of the discussion between Manyika and Taylor appears at the end of this article.)

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Matthew Taylor: Overall, the UK does very well on the quantity of work, and we provide a lot more flexibility than many other labor markets. One of the things we’ve been looking at has been the widespread rise of the independent-work, or the gig, economy; the phenomenon has been there for a very long time but it has become particularly visible where it’s digitally enabled, where people are doing car-ridesharing services or other kinds of things like that.

When self-employment growth started in the UK after the global crisis, there was a sense that people were choosing self-employment because there were no jobs available. It was involuntary. But actually, as the economy has improved, self-employment has not fallen. It is continuing to rise, though perhaps not at quite the same pace.

We are seeing more people working postretirement age, and wanting to work in a way that they can control. We are seeing more people who simply want more autonomy and flexibility in their lives, in the way that self-employment can offer it. New digital platforms facilitate that: they make it easier for people to work in exactly the way they want to work. The challenge is to make sure that we exploit that opportunity to give people the kind of work they want, in the circumstances they want it, in a way that is fair and sustainable.

James Manyika: I agree. Some of the research we’ve done about independent work and the gig economy—we’ve looked at five or six countries including the UK and the United States—shows that the majority who do independent work actually do it because they prefer it.

Taylor: About two-thirds.

Manyika: They prefer the flexibility and the independence. Quite often, these are people with unique skills who find that they can deploy them across a much larger number of users, or customers.

But about a third are doing this out of necessity, and the necessity comes in a couple flavors. Either because they actually can’t find traditional employment, something you find in countries like Spain. Or they’re doing it because they don’t earn enough from a full-time job and are trying to supplement their incomes. So you find that this other third is concerned about income stability and the variability that comes with that. Portability of benefits tends to affect even those who prefer the flexibility, but it becomes very acute for the ones who don’t.

Taylor: There are two additional concerns that people have about gig working. The first is that we might see the emergence of very, very powerful companies that then have a kind of monopolistic position. And secondly, what is sometimes called the Uberization of jobs. One of the things we heard in our visits to people around the UK [when writing our report] was that business models were being undercut by gig working.

So, for example, at one hearing we heard from the head of a removals firm [a company that transports people’s or companies’ possessions when they move to a new home or office]. He told us he was employing people and paying their pensions. This is what he’d always done. But now he is competing with a removals firm down the road that is pretending that the men who work there are self-employed. I would say that is erroneous self-employment, but they were claiming and getting away with the idea that they were self-employed.

Manyika: It’s important to look at the other side of that, too. With a lot of independent work in the modern gig economy, there’s usually a very large group of happy users and consumers of these services. Whether it’s a car-ridesharing or any of these task-oriented services, quite often that need was either too expensively served with other traditional mechanisms or not served at all.

You’ve seen examples where services now pop up in places where the traditional versions didn’t previously exist, whether it’s places where taxis never used to go, poor neighborhoods, or places where you couldn’t find accommodation.

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Here is a direct link to the complete article.

James Manyika
is the chairman and a director of the McKinsey Global Institute and a senior partner in McKinsey’s San Francisco office. Matthew Taylor is chief executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce in London.

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