Digital transformation. Automating. Globalization. A persistent gap between productivity and wages – and the anger and activism it can engender within the workforce.

These are just some of the headwinds rocking business leaders as they try to chart the course for the work of the future. And that’s before factoring in pandemic-related shocks like supply chain disruptions, inflation, and changing standards around hybrid working and geolocation.

Business leaders “need to build strong businesses and good jobs in a globally competitive economy where technology is advancing, with the social diversity we find in our world.” This is how MIT management professor SloanThomas Kochan presents its online executive education course, “Leading the future of work.”

Across industries, workers fear that automation and artificial intelligence will steal their jobs, said Kochan, a member of the MIT Working Group of the Future. Kochan shares these concerns, but also sees “tremendous” potential for innovation in new technologies.

“We believe we can harness advanced technologies to create a productive and more equitable future,” he said.

Another challenge is closing the gap between productivity and wages that has widened since the 1980s, when wages stagnated for average American workers even as productivity rose.

In the United States, nine out of ten people born between the 1940s achieved a higher income and standard of living than their parents. By contrast, only half of those born after 1980 were able to achieve a higher standard of living than they grew up with.

Globalization, the presence of the “informal economy” of jobs without a social safety net and declining union membership have led to “a power imbalance at work that needs to be addressed”, Kochan said.

A “new social contract”

In his book with Cornell Professor Lee Dyer, “Shaping the future of work: a manual for action and a new social contract“, Kochan describes a new social contract as a “collaborative effort to develop high-quality jobs and strong, thriving businesses while overcoming the deep social and economic divisions apparent in today’s society.”

In his course, Kochan outlines a four-pronged roadmap to guide business leaders in creating this working model of the future:

1. Lead with “the high road”.

Business leaders have a choice in how they compete and create value for investors, employees and customers. A low-road approach focuses on quick returns for shareholders and the idea that labor is a place to cut costs.

Organizations that embrace high road principles rely on innovation, strong customer services, and fair pricing. Most importantly, they strive to create value for all stakeholders, including their employees.

“A great business invests in workforce development and engages employees to improve operations, introduce new technologies and work processes, and share in the financial success that employees help generate,” Kochan said.

No single change or practice will put a company on the path to being a top performer. Rather, Kochan said, it requires a coordinated system of mutually reinforcing practices, as well as a commitment to culture change.

Supporting the principles of diversity and inclusion when hiring and promoting, instilling zero tolerance for bullying or discrimination, and nurturing a culture that values ​​the contributions and voice of workers are part of essential practices adopted by large companies.

“By implementing a comprehensive set of coordinated employment practices, you can attract and retain top talent and use their skills and motivation to drive your business success,” Kochan said.

This includes linking workers’ compensation to benefits, offering flexible working hours and providing paid leave for caregivers and parents.

2. Use advanced technology to drive innovation and increase work.

From AI and robots to cloud services and software, there is no shortage of technologies available to drive innovation and competitive advantage. Deployed without regard to labour, these technologies can displace workers or create bad jobs.

In light of the social contract, companies should involve workers at every stage of the design and implementation of new technologies to ensure that they actually deliver the intended benefits. Employees must be trained appropriately before technology becomes a central part of their daily responsibilities, and those whose jobs are negatively affected must be compensated for their loss.

Yet this is not how companies have traditionally introduced new technologies. Most follow a sequential model in which a system is introduced to solve a business problem without involving day-to-day workers in defining the business problem or determining whether they have the skills to fully utilize the technology and reap the rewards. profits.

Kochan argues that an integrated approach is much more effective. This model relies early on on the engineers, suppliers, and frontline employees closest to the business problem, working together to design the technology and work systems.

“When we integrate technology design and work design, evidence shows we achieve the highest levels of productivity and more rewarding work,” Kochan said.

Even advanced analytics and AI require commitment from all stakeholders to be successful.

“There is a lot of fear around AI and robots, but they need to be positioned as tools to help people think,” saidAlex “Sandy” Pentland,an MIT Sloan information technology professor who co-teach the executive education course with Kochan. “When you build tools with that in mind, people are totally on board with them. That multi-stakeholder view is really important when it comes to minimizing risk.

3. Train and develop the workforce.

Ensuring that the workforce is ready to participate in the future of work is one of the main tenets of the new social contract. Kochan emphasizes the use of state-of-the-art learning systems that make full use of all available online resources.

Training and skill building should also be an ongoing process that is agile enough to evolve as methods and content change over time. It also ensures workers have a deep understanding of their job so they can augment ongoing AI and automation efforts with their knowledge and expertise to achieve better results.

Beyond the role of any organization, it is important to build lifelong ecosystems in partnership with peers from industry, the education sector and workforce development institutions. work. In education, in particular, it is crucial to look beyond K-12 or even four-year college to other pathways that can help workers improve their skills, including counseling workforce or community colleges.

“The United States is extremely good at college education with some of the best universities in the world, but it dramatically underinvests in anything non-university-based,” said David Author, professor of economics at MIT and co-director of the MIT Working Group on the Future of Work. “We have weak occupational systems to the extent that unions have provided much of the apprenticeship training which has atrophied as union coverage has drastically diminished.”

4. Engage workers as partners in innovation.

Today’s workforce has high expectations of having a meaningful voice at work, and they want to choose the best mechanism to meet their particular needs and circumstances, particularly with regard to new technologies and disruptions. like the global pandemic.

Leaders must strive to develop new, safe communication channels and put in place mechanisms for rapid response — a feedback loop that builds mutual trust, Kochan said.

Engaging workers as partners requires new management styles based on collaboration and open dialogue. Younger generations are dissatisfied with a hierarchical approach to management and will seek employers who engage them collaboratively. As part of the transition to a new style of leadership, emphasis should be placed on active listening and facilitating behaviors that elicit different viewpoints and encourage all participants to engage.

At the same time, business leaders must play a key role in rebuilding dialogue with labor leaders in their communities and industries. Engaging with others outside the internal organization is the best way to build a more inclusive social contract and deliver a future of work that works for everyone, Kochan said.

“Businesses and workers can lead the way in showing how some of the deep-rooted divisions currently threatening our democracies can be addressed in mutually respectful and effective ways,” Kochan said. “This is the kind of leadership we need if we are to build a new social contract that works for everyone in the years to come.”

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