Work's great reboot: Reflections on Davos 2023 

Article originally published by Forbes on February 9.

Regular readers of this column will know that I routinely write an article on my reflections after every Annual Meeting of the World Economic Forum at Davos. As has been the case since 2020, the primary focus of the meeting was the twin global challenges of climate change and the future of work. While climate has sometimes overshadowed the future of work in prior meetings, discussions around work had added impetus this year. Why?

Tectonic shifts are happening in the world of work: Half (50%) of CEOs and CFOs believe their current talent model is insufficient to meet demand for their organization’s products or services. And of those in countries facing an expected recession, 57% plan to increase their use of AI and automation. In fact, according to CEOs, technological factors are the top external forces influencing their organizations.

Dramatic advances in robotics have allowed leaders struggling to attract and keep frontline workers in retail, hospitality and food service to increase their use of automation for highly repetitive, rules-based work. Meanwhile, the ChatGPT interface for OpenAI’s GPT-3 Large Language Model — an AI-powered tool that generates clear, concise and polished prose — has alarmed artists, journalists and other creators with its potential to democratize creativity and reduce skill premiums significantly.

These shifts and others are prompting a radical reassessment of how we think about work and jobs — what we call “Work’s Great Reboot.” A significant part of it is determining how to humanistically automate. It means creating a new set of guardrails around automation — not just automating simply because we can, but instead using automation where it makes sense and provides the most human benefit. Decisions about when and how to use automation must consider the human consequences — not just now but over the next three to five years.

The most critical step for leaders in moving from technical to humanistic work automation is expanding their thinking about automation and jobs. But most are still looking for optimal combinations of talent and technology.

How can they overcome this challenge? Instead of seeing a binary narrative between automation and work, leaders must identify where automation can best substitute highly repetitive, rules-based work; augment human creativity, critical thinking and empathy; and create demand for new human work.

This process will require leaders to deconstruct a job into its core elements. For example, they’ll need to determine where automation could relieve employees from tedious, time-consuming tasks or enhance employee productivity by fetching information or nudging them with new insights they might not have considered before. When used in the most optimal combinations, automation can free up individuals for higher, more enriching pursuits and even open up new pathways for enhancing creativity and — perhaps most critically — developing new skills.

What was the “war for talent” (only exacerbated by the Great Resignation) is quickly becoming the “war for skills.” Following two years of tight labor markets, wage and benefit costs are rising. Yet only 14% of business executives strongly agree that their organization uses its workforce’s skills and capabilities to their fullest potential. Leaders are now having critical conversations about how work gets done within their organization: They’re exploring how digital transformation can help bridge gaps in their workforce and identify the essential human skills they need.

Having these conversations and asking these questions are critical because they allow leaders to determine how to address workforce gaps (whether through automation or other avenues such as M&A or outsourcing) and gain clarity on the future work skills and reskilling pathways for existing talent. As automation proliferates, ensuring employees do meaningful and sustainable work will be critical. Finding opportunities to automate tasks and free up time for value-adding activities will become a priority.

Reconstructing new, more pivotal jobs will also become essential for the agile, next-generation enterprise. Many leading organizations have embraced job deconstruction and perpetual work reinvention to enhance their agility and resilience while making skills the currency of work. This underscores the need for a “skills revolution,” as outlined in the Good Work Framework, whose fifth core objective is to “foster employability and a learning culture.” To stay competitive and prepare their workforce for the future, organizations must make upskilling and reskilling accessible to their people, promoting a culture of continuous learning and embracing a more expansive view of work, jobs and skills.

The Good Work Alliance, facilitated by the World Economic Forum in collaboration with Mercer, provides a framework of goals, metrics and target-setting that allows organizations to attract and retain the talent they need — and make Good Work a reality.

Although the rise of automation is indisputable, leaders still rely on highly skilled, high-performing people — who are becoming harder and harder to come by — to power their organizations. Most CEOs (80%) see talent scarcity as a pressing business challenge. And nearly six in 10 (63%) CEOs and CFOs expect demand for their organization’s services to increase, yet only 35% believe their model is agile enough to scale talent needs up and down.

How can employers overcome the acute talent shortages they’re experiencing? By making the right investments to support their workforce.

After undergoing multiple crises, including the pandemic and historic inflation, employees are focused on protecting their financial security and well-being. In the US, only 42% of employees say their compensation is keeping up with the rising cost of living expenses. More than half (56%) are stressed about their finances. And nearly half (49%) say money worries have severely or significantly impacted their mental health.

It’s no surprise that employees now value a workplace where they have more sustainable workloads and more resources to support their financial, physical and mental health. It’s a defining moment marking a new “lifestyle contract” between employers and employees.

Employers are taking note — and taking action to address employees’ well-being at work as well as their short-term financial health, long-term financial security and readiness for retirement:

In reconciling how they approach digital transformation, deploy AI and determine the optimal combinations of talent and technology, organizations mustn’t lose sight of the human element in the equation. Organizations can provide equitable and expansive rewards to differentiate themselves as attractive employers and build a more resilient workforce. They can embrace a holistic approach that will nourish their people’s physical and mental health, protect their financial well-being and prepare them for the future of work. It will entail innovations in digital health to promote health equity by improving access to affordable quality care. Ensuring people have the resources they need for retirement from both a financial and fulfillment perspective. And thinking beyond what jobs look like now, transforming existing work models to become more elastic and adaptive to develop a future-ready workforce and a more agile organization.