The future of work: Employees more educated, will work fewer hours, but at higher productivity levels

18th UASA South African Employment Report (SAER) was presented by economist Mike Schussler of Economists SA in Muldersdrift, just outside Johannesburg, last night. The topic of the presentation was The Future of Work.

“The future of work should be looked at in big strokes, by keeping an eye on mega trends that will help us understand what the future might bring and to help us make decisions in terms of work. These mega trends can be measured and make it easier to look into the future,” said Schussler. Schussler presented the 18th UASA South African Employment Report in Muldersdrift, just outside Johannesburg tonight during a gala event that also celebrated UASA’s 125 years of involvement in the labour movement.

Schussler emphasised certain mega trends that may assist individuals and companies to make decisions regarding the future.

“In short, people getting richer, we produce more, work less hours per year, live longer, employees are more educated. Employees are more likely to become pensioners. Real poverty declined and we have more than enough food and clothes,” Schussler said.

“We live in an era of wants, not so much need, in much of the word. By that I mean that for many a cell phone is a so-called MUST, although their life would not depend on having it or not.

“A last mega trend is that education is entering the era of niches,” he said.

In more detail, Schussler explained that:

  • The people of the world get richer: The average income per person has gone from about  $800 in 1900 to about $8 000 in constant 2000 $ terms. There were no cars, TV’s, computers, mobile phones, air travel, and hardly any electricity or antibiotics.
  • There are fewer poor people in the world today than ever before: In the next year or two there will be more rich people – in other words more people who have more than  $100 per day to live on than there are poor people. You never hear this good news because good news does not sell well. However, South Africa is flatlining in this regard and we urgently need growth to lower the poverty rate.
  • We are getting educated and skilled: The percentage of young people making it to tertiary education has increased fourfold in less than 50 years. However, it is important to note that education is no longer the only thing a person will need in a future workplace. Skills such as communication, learning attitude and EQ will also be important as they will be measured too.
  • We work less hours every year: Labour force participation rates have peaked, even with fewer young people are around. Hardly any country still averages 3 000 hours per year, yet we produce more by utilising clever production techniques and mechanisation. Robotics and artificial intelligence will soon have us working even fewer hours while producing more.
  • We now live on average 25 years longer than people did in 1953: We live longer and the more advanced nations like Japan are getting close to reaching an average of 90 years in the next decade or two. The fact that the median age is increasing means the ratio of old to young is changing, which also leads to a different kind of consumer.
  • The fastest growing part of the population is those over 60: The reason for this is less violence, better medicines, more doctors. However, this also means that people need to save more for retirement and that more care needs to be given to the aged  who live longer and of whom there are many more than before.

What mega trends mean for future of work

Schussler said that the retirement age would be increased within the next two decades in most of the world, but that pension savings would become more important as people will generally live to the age of 100 years within the next four decades. This also meant that medical insurance or treatment will become much more important, and not only for the aged.

He added that entry-level jobs would require ever more education, and that 20 years of education might well become the norm for employees along with other skills.

Poverty would be relative rather than absolute for all but a very tiny part of the world. However, Schussler stressed, Africa would still have a lot of work to do in this regard.

“The world of work moves in the direction of automation and connection,” Schussler said.

In just 27 years the share of workers in agriculture has dropped from about 44% to 28%, service workers increased from 31% to 49%, with over 80% of South Africans employed in services already!”

EU data shows that the move to services makes it possible for people to work from home. While the number of people working at home most of the time has declined, the number of people working at least partly from home has increased. In 27 years the total number of people who work at least partly from home has increased from 17,5% to 22,9% in Europe. This trend is also evident elsewhere, Schussler said.

In South Africa, those working in production have declined from 26% in 2001 to 19,4% in 2018, a very rapid reduction that will continue as automation takes hold mainly in production sectors.

“Although South Africa may lag a little in productivity of manufacturing, it is also improving relatively more quickly here than in services. The average worker produces 3 times as much today in manufacturing than five decades ago. Today we need fewer workers and more skills,” he said.

Industrial robots

According to Schussler 1 240 industrial robots are installed per 10 000 automotive employees in Japan, and by 2018 there were 2,1 million industrial robots installed around the world. Robots are mainly in use in automotive, computer and mobile manufacturing.

How does South Africa compare to the rest of the world in terms of industrial robots?

“Applications for industrial robots include welding, painting, assembly, pick and place for printed circuit boards, packaging and labelling, palletizing, product inspection, and testing; all accomplished with high endurance, speed, and precision.

“In South Africa robots are mainly found in the automotive and packaging industries. South Africa has less than 10 000, and probably closer to half that number,” said Schussler.

To get further investment here SA would need a stable power supply as well as more certainty and skilled staff, but automation is coming to mining and even farming. Services will have to wait a little longer, he said.

To summarise his thoughts on the future of work, Schussler said:

  • More people will be employed in services
  • We are moving away from workers to employees with decisions to make or help make in our firms, lives, etc.
  • Education is more important – but getting the right education more difficult choice to make
  • More will work from home although not all the time
  • Connections are important both via internet but also directly with other humans
  • As we interact more with each other the focus will be on personal services
  • As we move to longer lives health, education and social services will become more important

For further enquiries or to set up a personal interview, contact Mike Schussler at 082 4175542

OR

Stanford Mazhindu at 074 978 3415