A recent report from PWC titled ‘Will robots steal our jobs’ summarised a number of investigations into the potential impact on jobs as a result of the rapid development and implementation of Artificial Intelligence (AI, which in this context includes robotics and machine learning.) The report indicated that up to 30% of insurance and financial services roles could be impacted although exact numbers remain not surprisingly, elusive. Let me repeat that, up to 1/3rd of all roles in the insurance industry might cease to exist or have to change in a significant way.
That’s a pretty astonishing estimate. With some significant impacts.
Companies are going to undergo major transformations; changing what they do, how they create value, and how they deal with customers. And perhaps, the biggest impact will be on employees; how will they deal with this transformation?
With many insurers focus over the past few years on cost cutting (meaning less people) employees have already seen significant impacts. And yet the speed and volume of change is set to increase as the developments in AI really start to take hold. In order to realize the benefits that AI promises then someone is going to have the train and develop these new systems. And that someone is almost certainly going to include a significant number of employees whose roles are going to be eliminated.
This promises to be a major challenge for the leaders in the industry.
While a lot of effort is currently focusing on how AI can be developed and implemented and where the best returns can be achieved for the investment spend, I am wondering if the same effort is going in (or will be) to helping employees? The good news is that most insurers recognise their employees are their best assets (at the moment anyway) and many of them are committed to ensuring their staff are the best that they can be. Indeed some are committed to ensuring that their employees are trained and developed to cope with the changing business landscape that companies now find themselves in.
For many companies their whole culture is built around doing the right thing for all their stakeholders; shareholders, regulators, employees and society. For many employees that have seen significant restructurings and employee cost saving initiatives they might well be asking themselves whether the relative balance between the stakeholders is as it should be. This is a question that more employees will be asking as the impacts of AI begin to be seen. If employees effectively ‘down tools’ how will a company realise the full benefits available through AI? And we shouldn’t forget that today’s employees are also todays and tomorrows ‘society’.
Are companies going to try and rebalance how they prioritise the consider the needs of their various stakeholders and put more emphasis on the needs of employees and society?
While it is always difficult to make projections one of the defining characteristics of companies that successfully transition to a more automated future will be the way that they manage the major changes with their employees. Companies that simply ignore their staff as they rush headlong into an expense reduction programme driven by automation benefits are likely to be the losers as employees become even more wearied by the change and the most capable leave. Unless companies have their best employees working on the automation programs they will inevitably lose out to competitors who do. Unless a company recognises this it risks losing the trust of employees with potentially dramatic consequences.
However keeping your best staff through a change program that inevitably sees a high percentage of their roles being eliminated is quite a challenge. What will set winners and losers apart will be their ability to retain their best employees, help them transition into new roles or develop new skills. In both cases irrespective of whether those roles or skills are in the organization or externally. Winners will recognize that helping employees helps society as well.
Here are some ideas of how this might be achieved:-
- Firstly and probably most importantly recognise the reality of what is going happen. Be honest with employees about the environment that the company is working in and the fact that this will have an impact on them. Employees hear and understand as much (and probably more) than leaders do about what is happening and being honest with them is simply the right thing to do. Honest breeds trust and trust is going to be extremely important for leaders as they seek to change their companies
- As part of being honest help them understand what is going on externally and internally and what this means for individuals. It will be impossible to be specific but being open and transparent will help the employees adjust.
- Establish a dialogue at board and C-Suite levels about how to ensure that more emphasis is given to employees (and thus society) when considering stakeholders. Is the balance right? How do we fund any change in the relative priorities for the business investments?
- Rethink approaches to training and development. Rather than spend the majority of budgets training people for the benefit of the company change this to training them to be able to thrive when they leave the company; encouraging their loyalty creates external advocacy which will be hugely valuable in the future. Actively spend training money on programmes and course that you will see little benefit from.
- Develop programs that help employees to train and develop your AI capabilities equipping them for life inside and outside the organization
- Help them develop business skills and capabilities that will be needed in the future – people and relationship skills, consulting skills, building their own businesses, – again this benefits the company, the employee and also the wider community.
- Offer opportunities to retrain or reskill – encourage employees to learn to paint. This is a commitment both to the staff and to the wider community
- Run change management programs that engage the staff in developing the future. With AI knowledge is limited in the industry and the best ideas are likely to come from programs driven from those closest to customers. Many organisations will start at this point but without, in my opinion, giving some thought to 1 to 4 above these change programs won’t be as successful as they could be.
All of this costs money. For some the temptation will be to see the opportunities in AI as a cost reduction exercise. Perhaps the biggest test of a company will come with the debates about who gets what share of the benefits from AI. These are predicted to be substantial, after all a 30% saving in employee costs for any insurer is going to be a substantial saving. Are companies going to give all that benefit to shareholders or will some be shared with employees and the wider communities? Perhaps this is the first question to resolve in any company?
The winners will share with employees; the losers won’t.
The Burble 