Productivity - a humanistic view

In the newspaper “De Tijd” of 20 November last there was an article about the decline in the productivity of the Belgian worker. Where industrialization had previously resulted in strong growth in productivity, we are limited in productivity growth, partly due to the transition to a more service economy. In this article, I’ll link the statement provided above to Humanism, putting people at the center and looking how productivity impacts or will impact humanity further.

 Productivity, measured as output per employee, is, in my opinion, tackled in various “service” companies. Whereas in the past only the output of Blue collar workers could be measured, being for example the number of finished cars / radios / ... per hour or per week, now companies also deal with, for example, the number of orders, invoices or complaints handled by white collar workers per hour / per week. In the battle for market share or higher profits,  “Productivity”  and “Productivity increase” is what drives managers, to bring costs down.

 There are various improvement steps which can be taken to increase productivity. First, one could look at ensuring the employee works harder and longer, with more flexibility, for example through split shifts copied from the catering industry (service compartment) where employees do not have ups and downs in the workload, but a constant workload is ensured.

 A second, more advanced option is to, after a first base-lining, where one looks at how long something takes in the current way (for example by means of a “time and motion study”) to switch to optimizing the processes. Companies can use “continuous improvement projects” based for example on “Lean” where all unnecessary steps are removed.

 In the service sector, driven by a lot of paperwork with parallel processes, one can use a third way. This includes increasing productivity through automation. An example of this is the use of OCR software (optical character recognition or the ability to scan & understand documents by software), whereby incoming orders are read by a scanner and automatically placed in the ERP system. Once this first step has been taken, one can continue to build on Zero-touch order handling, in other words, no human being is needed to process a customer order. As pre-condition, however, all master data has been configured properly in the system first. The human “intervention” is then only needed to resolve the list of errors that the system reports. In the example above, do we have to scan all orders received? No, not even that anymore, because in combination with an automated workflow or robotic processing, this setup can even receive emails with orders, open and process attachments. A basic requirement is that all processes are clearly defined and perfectly documented in the tools. Robotic processing is a technique in which software is taught to repeat all steps that an employee performs in a program identically, but much faster, on the same processes. Think about your profit, your productivity curve is rising almost exponentially.

 However, what does this have to do with humanism? With putting people first?

Well, above I only described an order intake process, but this actually applies to everything we see in our living and working environment. Is it the purchase of a car online, of an insurance, the processing of sick notes at the health insurance, the order that you pass on to your baker ... in fact, once you have requested the service digitally, everything can be automated and you have less and less human contact required. The question then is: what impact does this have on employment, on competition, on study choices, on society?

In my opinion, companies see people as "difficult" creatures, people make mistakes, have a bad day every now and then and each employee has his or her own productivity curve during the day, all things the software bots don't have. Those software bots, once configured and as long as there are no changes, work constantly, 24/7 and have an accuracy that people cannot constantly achieve. The impact on society is enormous and will become increasingly clear. The less skilled white collar worker is simply pushed out of the market, not everyone will be able to map or define processes, even fewer people will be able to configure robots or fix errors that are reported. Even less people will, where manual work is still required, be able to cope with the increased pace or be able to meet the requirement to be able to present 99.996% correctness of the work delivered in more complex process. . So it doesn't look good.

And the impact on companies? Well, once you have embarked on automation, there is no going back because the staff will largely be replaced by software. Software must be constantly updated, is it at the level of configuration, security or the integration of new legislation and yes,  there is a lot of work or opportunities, but also this will be partly automated, just think of performing software tests - a lot of testing already walk independently ...

For those who still have work, we are on the road to centralization. After all, you understand that many of these options will be offered as a (software) as a service. Not every company will have the ability, financially, to develop everything themselves, so they will purchase the automation “as a service”, for which they pay monthly. Here, too, the impact on people becomes enormous. Digital services know no borders and where the IT service desk first went to India and the Philippines, we can also expect this from the current operational software work (building and maintaining software robots and, where necessary, also running the operational processes). Larger companies are already working with "service centers" where common services are concentrated in 24/7 models.

And what does this have to do with productivity? Well, previously we considered productivity on the basis of output / employee, but here we are going to include the cost of the employee and look at the costs. These costs include wages as well as benefits that a company receives in some countries. Belgium had the “notional interest deduction”, Ryanair was in Ireland for certain advantages, countries allocate training budgets to companies ... in short, here too there is an impact on people and society, the companies bring employment and income, but the mutual competition of the countries ensures a partial erosion of their potential income which then has an effect on budgets for social services, for example - a direct impact on residents.

What about the employee? Well, it will be highly skilled, super flexible in terms of working hours (work-life balance anyone?) and will have less stability in life. This employee will be offered long or short term contracts but will never have long term security even with long term contracts. This will directly impact their way of life. Either the employee takes risks and “fixes the problem when the problem occurs” or the employee will be much more careful and starts to take fewer risks. Just think of taking out a loan for a house, the banks expect a repayment every month, but in a changed society they will also have to come up with different formulas or become more conservative (stricter / more demanding) when providing of loans. There is no doubt that these changing circumstances will have a major social impact. The small companies which do not automate will be out-competed (on cost and speed), those that go along will become super-software-dependent on the big ones and there will be a kind of uniformity due to the complexity of the programs, a uniformity which we as humans just do not want ... We could already compare with the FBs of this world, the Amazon's or Bol.com's and how they outclass the rest with their "easy to handle software". I know, I have released two books myself through Amazon, it was fairly simple to get everything done but much easier than having to figure everything out for yourself using possibly existing local tools… the best provider gets it.

The plug is in the socket, the genie is out of the bottle, the machine is running. It will be up to the people themselves, supported by legislation worldwide, to put a stop to the excesses of automation. Just today (06.01) I read that HR tools that analyze CVs will not be allowed to independently decide whether a candidate will be rejected, which brings some hope, but there are still many loopholes to be closed.

In summary, we can say that productivity in the service economy is certainly high on the agenda of larger companies and that this will have a huge social, economic and mental impact. If we look at the educated middle class, which is getting more and more risks to manage, hopefully it was in their educational curriculum. A good job today does not guarantee a good job in the future, it is just like the text when buying an investment paper ... Somewhere, almost twenty years ago in some countries in the Middle East, there was a legislation that x percent of the workforce had to be local, we might have to consider that here too now that more and more offshoring is taking place or we really do require robots to tax robots worldwide more heavily. As the jobs of many employees are coming under severe pressure governments will need to take action, one cannot re-train everyone into careers where there’s a professional shortage (eg nursing, education, …). I do not yet know how the story will continue, but a holistic, global approach is needed in which the classic left-right propositions will have to make way and in which we look each other in the eye, observe the challenges presented, analyze them and act decisively, putting people first , allowing also people to grow and flourish in a “protected” and supportive environment.

#humanism #people #peoplemanagement #leadership #productivity #HR