If this past year and a half has taught us anything, it’s that change will happen without any warning, regardless if we or our institutions are prepared for it. Personally, I was already adjusted to one aspect of this global shock: working remotely.
As millions around the world joined digital work during the pandemic, these new remote employees highlighted already existing problems of global competition, social needs, inclusion and sustainability in the remote working sector. 2020 brought to the forefront this new way of living and working, which begs the questions; are we, citizens and European institutions, ready for the future of work?
While COVID-19 accelerated the future of work, it did not provide a relevant framework
The impact of digital technology on work is profound – but still, yet to be fully realised. Take my company, Black Tie Professional, for example. Since 2015, we’ve worked as a multidisciplinary remote team, interacting entirely using digital systems for calls, document sharing, and collaboration. This allows workers to forge a greater work-life balance, particularly those with young families. For me, this has been crucial, allowing my wife and I to continue working while spending more time with our two wonderful children.
The COVID-19 pandemic has been conducive to this global shift and has given us a glimpse of the future by accelerating trends of change that were already on an upward trajectory.
Since 2009, 5.4% of employees in the EU-27 worked from home. However, in 2019 that group increased to 9%. This was more common among self-employed people than with traditional employees, even if numbers increased in a similar way for both categories over the past decade.1(Source: Telework in the EU before and after the COVID-19: where we were, where we head to: https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf)
- In 2019, almost 36% of the self-employed were sometimes or usually working from home in the EU-27, up from 30% in 2009.2(Source: Telework in the EU before and after the COVID-19: where we were, where we head to: https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf)
- For traditional employees, it was just above 11% in 2019, up from 7.5% in 2009.3(Source: Telework in the EU before and after the COVID-19: where we were, where we head to: https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf)
In 2020, close to 40% of those currently working in the EU began to telework fulltime as a result of the pandemic.4(Source: Telework in the EU before and after the COVID-19: where we were, where we head to: https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf) While it was forced, due to the lockdowns, in many cases, it brought families closer together and facilitated digital literacy for millions of individuals. As a by-product of this phenomenon, our collective society benefited from reduced pollution and congestion in urban areas. We learned this is not just a new shift in working but potentially, part of the solution for one of the world’s greatest threats – climate change.
However positive these side-effects are, it has also brought to light the inequalities that we have yet to realise, let alone rectify. For example, not everyone has the following:
- the skills or space to work from home,
- the emotional and mental capabilities (and safety),
- a place to call home.
Women and young people under 24 years were particularly affected by the rise of unemployment rates.
Indeed, mass digitisation is not equally democratic. Industries such as corporate catering, events, construction and maintenance of executive offices have suffered, to name a few. Home delivery, distance learning, neighbourhood services and work set-ups in rural areas have thrived.
In addition to this, access to remote work was considerably more widespread among well-paid individuals. In fact, around 25% of workers in the top quarter of the EU-27 income distribution worked remotely (or teleworked) in 2018 – a share that decreased to less than 10% among those in the bottom half. (Source: Eurostat, ICT usage survey). The pandemic has exacerbated this divide between those who can easily transition to working from home and those who cannot.5The median monthly earnings of managers and professionals – people who are now mostly working from home – are on average more than twice those of workers, such as assemblers, plant and machine operators, who mostly have to work on-site (source: Eurostat – ESES).
Lastly, as the platform economy grew over the past couple of years, the pandemic has brought to attention the lack of social protection for freelance workers. Unlike full-time and long-term employees who benefited from contracts that safeguard a number of social benefits, many freelance or platform workers did not enjoy the same advantages, affecting 14.8% and 18.3% of the EU-27 working-age population in the fourth quarter of 2019.
The main lesson we can take away from the pandemic is that while our way of working has practically changed overnight and remote working has seduced many with its perks, we need to collectively acknowledge that this is still a new frontier – it needs to be properly tamed and framed by adequate public policies capable of redesigning our society as a whole in Europe, so that no one is left behind.
Everything about ‘work’ as we know it was already transforming
Long before the Covid-19 virus reared its ugly head, Europeans citizens were working more than ever as employment in the EU, plus Switzerland and the United Kingdom, rose between 2003 and 2018. This increase, however, was also accompanied by a number of evolutions:
- The occupational mix shifted. In all regions, the most highly skilled individuals enjoyed the strongest job growth over the last decade, while middle- or low-skill workers had fewer opportunities. (COVID-19 and increased automation adoption triggered by the pandemic can speed up this trend.)
- Employment growth has been concentrated in a handful of regions: forty-eight cities in fact, including Amsterdam, Copenhagen, London, Madrid, Munich, and Paris, which are home to 20 percent of Europe’s population, generating 43% of Europe’s GDP growth, 35% of its net job growth, and 40% of its population growth between 2007 and 2018.6“By contrast, 438 shrinking regions with 30 percent of the population, mostly in Eastern and Southern Europe, have declining workforces, older populations, and lower educational attainment. The remaining half of the population lives in a wide range of economies that have been largely stable, with modest job growth prior to the pandemic.” “The future of work in Europe” – McKinsey: https://www.mckinsey.com/~/media/mckinsey/featured%20insights/future%20of%20organizations/the%20future%20of%20work%20in%20europe/mgi-the-future-of-work-in-europe-discussion-paper.pdf
- Labor mobility before the crisis rose as the geography of employment shifted, and workers in the lower-income EU regions migrated to more dynamic cities to fill in jobs.7 “The future of work in Europe” – McKinsey: https://www.mckinsey.com/~/media/mckinsey/featured%20insights/future%20of%20organizations/the%20future%20of%20work%20in%20europe/mgi-the-future-of-work-in-europe-discussion-paper.pdf
Now, in our post Covid-19 world, we’ll be facing a substantial number of occupations that will be displaced by automation, and sooner than we think.
The future of work is likely to focus on the production of intangible services performed remotely and autonomously: where multiple employment relationships exist and the market will require continuous learning and re-skilling because automation and the use of Artificial Intelligence (AI) could result in the loss of 53 million jobs by 2030.8About 94 million workers may not need to change occupations but will especially need retraining, as technology handles 20 percent of their current activities. While some workers in declining occupations may be able to find similar types of work, 21 million may need to change occupations by 2030. “Telework in the EU before and after the COVID-19: where we were, where we head to”- https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf
In terms of skill sets, there is a rising need for critical thinking, analysis, problem-solving, and self-management such as active learning, resilience, stress tolerance, and flexibility. “At a more global level, companies estimate that around 40% of workers will require undergoing reskilling for a period of six months or less, and 94 % of business leaders expect employees to learn new skills on the job (a sharp increase from 65 % in 2018). Demand for skills related to a more sustainable and green economy can also be expected.”9“Telework in the EU before and after the COVID-19: where we were, where we head to” – https://ec.europa.eu/jrc/sites/default/files/jrc120945_policy_brief_-_covid_and_telework_final.pdf
Europe will also probably face a shortage of skilled workers as a result of the following evolutions:
- Europe’s aging population which will potentially reduce the labor supply by 4% in 2030, and
- The trend of shorter work weeks could add another 2% reduction.10“The future of work in Europe” – McKinsey: https://www.mckinsey.com/~/media/mckinsey/featured%20insights/future%20of%20organizations/the%20future%20of%20work%20in%20europe/mgi-the-future-of-work-in-europe-discussion-paper.pdf
Also, given urbanisation patterns, and the increasing exodus of city dwellers towards greener pastures after the trauma of shelter-at-home in cities, if employment hubs want to fill job positions, then remote working needs to be factored in.
We’re living in a moment where the role and purpose of work, which represents a huge bulk of our lives, is fundamentally being challenged.
Evolving the way we work can evolve our “vivre ensemble”
Redefining work is not just about what we do with our days and how we make a living. It’s about reconstructing, in our digital world, the tapestry of connection, movement, education, travel, and all the other parts of life that are impacted by work. This has the potential to reinforce the fabric of the European project.
Europe’s diversity, culture, economic and geographical resources represent a favorable environment to change the paradigm of work via digitalisation. With clear leadership, the EU can pioneer this change by adopting a shared culture and approach to digitalising work which could facilitate employability across EU regions and nations.
With this mindset, by demonstrating that fruitful digital work collaborations across nations could lead to more dynamic job markets, we could overcome sovereignist tendencies in which nations barricade themselves into niche markets, creating deadlocks, and undermining, at times, the ideals of the European project which was also built on human collaboration.
Work, therefore, becomes much more in this context. When I launched Whitelibra in 2019, a start-up that has developed a new cloud infrastructure for digital work, I never expected the level of social cohesion that digital work cities are capable of fostering.
By structuring labour relations that brings employees and self-employed people together into an ecosystem of work services, integrated by third-party platforms in different fields (e-learning, people caring, coaching, coworking, etc.), across nations, we are opening the world to citizens and allowing them to discover people and cultures, while they do what they love for a living.
The EU has made efforts to anticipate the future of work
As mentioned above, these new ways of working still resemble a wild west of sorts, and policy is an important lever capable of taming, not it’s expansion, but the manner in which it expands, so that it facilitates rather than penalises.
Such policies should be moulded in a way that represents our societal values, endorses inclusiveness, and remains compatible with our way of life. This means we’ll need a range of policies that weave a coherent digital work scenario in Europe. In recent years, EU policymakers have demonstrated an appreciable capacity to analyse future trends and scenarios via the the following efforts:
Automation, upskilling and reskilling
As automation and artificial intelligence (AI) is set to replace many low to middle-skilled jobs, in its resolution on February 2019 on a comprehensive European industrial policy on artificial intelligence, and robotics, the European Parliament stressed that education curricula must be adapted to automation through the establishment of new learning paths (i.e. the need for digital skills, including coding, to be included in teaching and training from the early school years to life-long learning).
To curb the unfavourable effects of automation, it’s also important to create a larger and more inclusive labour market, by reconciling work and family life, opening up jobs to people with disabilities, low educational levels, or anyone coming from outside the EU, as well as bringing more aged workers into employment.
The EU has prioritised such realisations via the new European skills agenda. Among its flagship initiatives, several concern the adult workforce: ‘Individual learning accounts’ meant to help “close existing gaps in the access to training for working age adults and empower them to successfully manage labour market transitions.” The Commission is due to launch this initiative in the last quarter of 2021 with the objective to empower workers “to up and reskill throughout their entire lives.”
The World Economic Forum report states: globally 84% of employers are set to move quickly to digitalise working processes, including significant expansion of remote work, with an expected 44% of their workforce to operate remotely.
Being connected anytime and anywhere, often accompanied by a high workload, can lead to increased stress levels for workers. Preserving the mental health of workers, within this new context is key. The European Parliament voted, January 2021, on a legislative-initiative resolution, calling on the Commission to put forward a legislative proposal to secure workers the right to disconnect.
Since the dividing lines between work and private life can become blurred with remote work, and employees can be encouraged (or volunteer) to work even on sick or annual leave, as well as weekends or public holidays, EU policymakers think it might be necessary to introduce regulation for transparent and predictable working conditions for teleworkers or remote workers.
Ethical concerns surrounding the need to track employees working remotely during business hours to preserve the employer’s economic interests is also being addressed at EU level via the General Data Protection Regulation (GDPR), which requires employees’ consent for the use of tracking software or applications.
Greater clarity around platform work
Within the scope of platform work, the most important issues revolve around the clarification of the employment status of platform workers,11 Whether they should be considered as employees or self employed, or whether the platform itself should be seen as an employer. adjusting existing labour market institutions, and welfare systems to the specific needs of such workers.
In addition, there is a need to frame regulations to prevent social dumping (where platforms hire their workers in Member States or other countries where salaries are lower in order to satisfy clients in Member States with higher living standards). This can lead to unfair competition between platforms.
The European Commission is planning to launch a consultation on “improving the working conditions in platform work.” Though this is a promising effort, a Eurofound study points out that more has to be done at the level of national regulatory frameworks.
Adequate social protection
With an increase in remote, part time and self employed workers, it’s becoming even more apparent that the same social protection provided to traditional workers needs to be extended to these other worker categories. Non-traditional workers are at a higher risk of low income and poverty at a post-retirement age with their current pension coverage.
These discrepancies were highlighted during the COVID-19 pandemic as platform, part-time and self-employed workers had less social security protection than traditional workers, and were hit harder by the unemployment spike during the pandemic. The European Commission passed SURE: Support to Mitigate Unemployment Risks in an Emergency, at the beginning of the pandemic, however these loans need to be extended or replaced by EURS: a European Unemployment Reinsurance Scheme, which is currently in production. EURS would ensure the “harmonisation of current national unemployment benefit schemes”12“A European Unemployment Benefit Scheme” European Commission, 2017 while taking into account the problem of the moral hazard.13The difficulty of self employed to meet the need requirements showing their business is not operating, in order to receive unemployment benefits.
Within the non-traditional workers categories, working women suffered inordinately despite the 2019 Work-Life Balance Directive which aimed to balance the gender gap in the domains of employment and caring. These inequalities need to be examined further as the future of work progresses.
The European Commission must take charge to ensure social security is extended to all forms of workers and coordinated throughout the European Union.
Adapting to demographic changes
As previously discussed, the ageing population will leave Europe with a reduction in skilled workers, predicting that by 2050 there will only be two working people per 65+ retired individuals. With lifespans extending, population ageing and workforce decreasing, the EU must adjust existing and future pension plans to reflect demographic changes.
Certain states have begun the process of revising their healthcare and pension plans, however this effort needs to be coordinated throughout the Member States. They should make revisions such as: equalising pensions of men and women, encouraging employability of older workers and promoting older active labour markets.
In terms of legislation, the EU released a pension plan, open to all forms of workers, transferable across EU countries, called the Pan-European Pension Product (PEPP). This initial change should be expanded upon in future legislation.
Ongoing inspiration is needed for a paradigm shift
The EU commission has demonstrated an appreciable capacity to analyse trends and scenarios for the future of work, and are working to streamline such analysis into other key programs14 Horizon 2020, Eic Accelerator, E-Pact For Skills and ESA activities for 5G a European culture of work, focusing more on flexibility, mobility, and social security.
However, all these initiatives, though encouraging, represent a hodgepodge of efforts that are (for the most part) at their infancy. Time is of the essence: if the EU would like to pioneer a paradigm shift and harness Europe’s brain power, then it must move swiftly to bring society up to speed with the future. To do this, a dash of creativity is needed.
After being knee-deep in the topic, here are five suggestions I believe worth sharing to ensure such creativity.
1. Isolate new trends and prepare for the future
The evolution of digital work is unpredictable yet fast-moving. Experimentation, courage and vision are needed to push us forward, in place of exhausting negotiations and compromises with the status quo. A legal, operational and organisational environment must be created so these experiments can be set up without limits to measure their impact. The regulation of work must allow flexibility. The digital world is changing faster than we can foresee. We need an accelerated response to match.
This environment should focus on anticipating future needs and building progressive models. For example, trade associations who represent vested interests in companies and individuals that risk losing market share or jobs due to technological disruption.
We need to be smarter, while also providing transitional support so no one is left behind.
2. Involve young people (and companies)
To plan the future, we need to embrace the viewpoints and suggestions of young people who already embrace the digital world. It’s difficult, if not impossible, to see a new reality without experiencing it on a daily basis.
People and organisations are starting a journey where they do not necessarily know the end destination, but they know change is needed. The future of work must lead to providing flexible schedules for female employment, self empowerment for young people and addressing technological educational gaps of older generations.
If we design the future based on traditional institutions, we risk going backwards while mistakenly thinking we are going forwards.
3. Engage labour institutions
To move forward, we do not have to reinvent the wheel. But it does mean taking advantage of every institution, situation and displays of excellence that can contribute to building a digitised tomorrow.
Today’s work environment is based on labour institutions and worker rights built up over decades. Consider mutuals, insurances, worker unions, and consumer protection organisations. We need to help these pillars of society – that manage social security, employment and welfare services – digitise or create new models.
4. Start new ways of working where work is created
Companies are not outside the market but are the market. It is not possible to work on employment policies without starting from the heart of work – the place where work is created, organised, and realised. This is all the more true at a time when the boundaries between companies, people and ecosystems are becoming increasingly blurred.
Innovation therefore starts with reforming the governance of existing companies or organisations, both large and small, by raising awareness and providing incentives for leaders to experiment with solutions that could help shape the future. We must involve these living, breathing companies or organisations in the quest for a more sustainable digital workplace.
5. Defining a new European employment contract for digital work
With all this said, the change needs to come from the policy level. Digital work has very specific features that go beyond the simple free declination of work space and time. It also concerns the issue of autonomy, the different roles that people can play in professional relations and the types of remuneration.
In addition to modernising labour law, the key is to combine the positive parts of an employee’s work experience (protection, continuity, relationship with the organisation) with the benefits of self-employment (freedom, entrepreneurship).
In this new context, balanced choices must be made regarding minimum wages, international workers (EU or non-EU) and new working rules (e.g. the right to disconnect) that don’t conflict with the principles mentioned above.
It would be useful for the EU to give a stimulus to the European workers’ unions to create a new contract specifically for digital work and draw up a European directive to ensure a level of homogeneity across Member States.
This activity should be added to the debate around the European instrument for temporary support to mitigate SURE and the reform pertaining to social security at work.
Structural changes also needed
These suggestions need to be pursued against the framework of relevant structural changes capable of accelerating the potential of work tomorrow. The most important being the following:
Despite the increase of ‘Transnational’ work, managing social security payments and structuring administrative requirements in order to guarantee workers protection still remains complicated, and constitutes a pressing topic.
A common platform needs to be created that allows people to work, pay their contributions and taxes with ‘a few clicks’ regardless of geographical residence and location of the employer.
Digital Public Administration
Innovation and financial opportunities remain too centralised, bureaucratic, and complex. There is a surplus of people controlling, reporting and evaluating projects – and yet, limited support, measure and operational projects allocated for the future.
Institutions must create more digital, flexible, decentralised, collaborative and interactive processes which are themselves part of the experimentation – to shift from a reactive to a proactive model, that is effectively in charge of developing solutions and services.
Here too, some progress is being made, but a shift from an administrative-centric approach to a solution-focused model is needed, through the financing or the development of a digital public services plan.
A more cohesive, flexible, digital way to work (and live)
If set in good time, the challenge of digital work could make an important contribution to the issue of European integration. It’ll combine productivity with social inclusion to protect the European way of life.
Young people finishing their studies, women reconciling family and work, start-ups investing in the future, companies embarking on the road to digital transformation are setting the tone for tomorrow…. a responsibly digitised global tomorrow.