In the world of the future, ruled by artificial intelligence and robots, there is no space for people, the headlines tell us. The forth industrial revolution is no reason for optimism if we think of it as a complete transformation of the labour market under the influence of new technologies, which will result in the automation of production and possibly lower demand on the labor market.
This pessimistic storyline has migrated from books by futurologists into public discussions involving experts who speak about how technology will soon significantly transform the traditional labor market.
Russia is affected as well: recent research found that two thirds of Russians (65%) think that new technologies will make the process of the job hunting more complicated in the future, while Russian lawmakers are already discussing the possibility of cutting the work week to four days. However, the forecasts that depict the future as dystopian are incorrect, say business representatives. HSBC conducted the Navigator: Made for the Future study and asked executives from 2,500 companies in 14 countries what they think about how technology will impact their business. The results were unexpected: business leaders do not plan to decrease their investments into human resources — on the contrary, they intend to invest in employee training and maintaining loyalty.
More and more companies view investing in staff as a way to boost business efficiency
The global business environment is changing and becoming more complex than it has been before: economic growth is slowing, international trade is expanding at its slowest rate for three years, and geopolitical uncertainty has again become a factor for business to take into account.
Everything seems to point to the fact that companies should be extremely careful when planning development costs and reduce expenses. However, the results of the study suggest the opposite: more than half of company executives plan to increase investment in employee training. One reason is the need to improve labor productivity. And 75% of the respondents agree with this statement.
Why are companies willing to spend money on staff development?
Until recently organizations relied on boosting profits on new markets, while now they are focused on reducing costs and improving product quality. However, this strategy is impossible without developing staff and maintaining their loyalty.
In other words, investing in new technologies is pointless without ensuring the company has professional staff. And for a quarter of growth-focused organizations, the quality of work and qualifications of employees are one of the three main factors for business development in the future.
And although only 20% of the companies polled consider a lack of staff to be among the main threats to business development, more and more organizations understand that the core of personnel policy should not be costs but rather well thought out solutions that make the company more attractive as an employer in the long term.
For example, a quarter of respondents indicated that they should pay more attention to environmental sustainability, as strong green policies help recruit and retain employees. This trend has appeared only recently in Russia, but there are already examples of how Russian companies use it to increase staff loyalty.
Most companies spend on innovation, although they have different motivations
Most companies (84%) plan to increase spending on innovation. Half (57%) will increase investment by more than 5%. A third of companies (34%) are pursuing this policy because they believe that new technologies will completely change how business functions in the next two years. At the same time, companies have a mixed attitude to this spending: 25% of respondents worry that the investment will not pay off; 40% of respondents believe that the excessive cost of innovation is the reason that holds it back.
To one degree or another, all companies spend money on innovation, but their motivations are also interesting. Half of respondents believe that innovation provides an additional opportunity for company growth; the other half believe that introducing new technologies is the only way to survive.
The results of our study show that companies are optimistic about the future and are ready to invest in development, which they see as optimizing production, improving product quality and reducing costs. The main components of this strategy are investments in technology and people, which will increase the demand for qualified employees every year.
Russia is no exception here and soon we will see how companies will increase spending on training employees to attract and retain the most competent.
The future depends on people, not technology
The development of new technologies will inevitably lead to a transformation of the labour market, however, the scenarios of this development do not have to be pessimistic, as many people think today. We see that business has already begun preparing for this transformation, and this is a cause for optimism. After all, how automation of the labor market will ultimately affect the labor market depends on people, not technology.
By Malachy McAllister, CEO of HSBC Bank Russia