Automation At Work Will Change Our Home Lives

We might think that location doesn’t matter in a hyper-connected, globalized world, but where you’re located matters more now than ever. We live in a clustered world where some areas, like the mega-regions encompassing the Boston-Washington Corridor of the American Northeast, are much more powerful and protected from large-scale workforce changes than others, like rural Ohio.¹ North American jobs are mostly knowledge-based, service-oriented, and done in teams. When working with and for others is in the job description, urban areas with more opportunities will win out over rural towns that rely on a single industry. As cities and mega-regions attract more people, technology hasn’t necessarily made the world as equal as we would expect.²

The number of service jobs in the USA has increased dramatically over the past 60 years, while manufacturing jobs have not grown.
The number of service jobs in the USA has increased dramatically over the past 60 years, while manufacturing jobs have not grown.³
The world’s population is concentrated in urban areas, and this trend is increasing in the coming decades
The world’s population is concentrated in urban areas, and this trend is increasing in the coming decades.⁴

Unfortunately, this means workers in rural areas may be left behind due to the kind of geographic, demographic, and workforce changes that automation brings.⁵ Of all the groups at risk of automation, older workers in rural areas have the darkest forecast. With few other job opportunities in the region and less flexible education, older, rural workers will face the difficult decision of uprooting their lives and reinventing themselves if rural industries like car manufacturing face automation. Indeed, we may all start rushing into already-packed cities and leaving rural zones even farther behind as AI deepens the divide between areas with and without opportunities.

Our housing needs could change as working from home becomes the norm

Yet, perhaps we don’t all need to move to big cities to bounce back from automation. Technology may not have given every location equal value, but it has given us many opportunities to work remotely and start businesses at home. From woodworking to welding to web design, there are many ways to take up a side hustle (or a new, more fulfilling career) from a distance.

As I’ve learned in the past two months, our homes aren’t set up for daily remote work. When you can pass through the front entrance, den, kitchen, and dining room in six steps without any doorways, there simply isn’t enough room to do everything from home — and if our work situation changes, our idea of acceptable living spaces will change too. Even though automation may drive us towards big cities, changing needs in our homes might make tiny apartments less attractive than they currently are. The size and layout of our houses will need a significant change if we spend all of our waking hours at home.

Facing educational inequality, we might flock to online learning to fill the gaps

Most of the conversation around automation focuses on the new, technical skills we can learn. Many of us could certainly use some of the benefits gained from learning to code; namely, increased creativity, better logic, and greater analytical ability. But asking everyone to learn how to code will not remedy the problems surrounding automation.

As it turns out, the level of education workers have seems to be more important for adapting to automation than their specific field of study or technical skills. Workers in lower-skilled jobs,⁶ who dropped out of high-school or university, are at a significant disadvantage in employment and salaries compared to their counterparts who completed their schooling.⁷ 

Wages per week for men and women in the USA with different education levels
Wages per week for men and women in the USA with different education levels.⁷

Above, you can see that men who dropped out of high school had the same inflation-adjusted wages in 2017 as they did in 1963. They were no better off three years ago than 57 years ago, despite considerable increases in the overall wealth of the United States. People with graduate degrees are now making 70% more than they did in the 1960s, widening the inequality between people with different education levels.

In a survey of the top US economists by the University of Chicago, 81% of respondents agreed that one of the leading reasons for increasing income inequality is technological change that affects low-skilled workers more than high-skilled workers.⁸ This is referred to as ‘skill-biased technological change’, where technological advancements increase demand for skilled workers, raising their wages faster than their low skilled counterparts. This skill-based change means our chances of avoiding automation can be increased by completing a half-finished high school diploma or college degree, either of which might have online options. This online flexibility can make going back to school more convenient and more common for those who might not have access to traditional in-person education.

Takeaways

Our careers partly shape our lifestyle decisions. Like dropping a stone into a calm pond, changes at work spill over into our home life. Automation is doing the same. A shift in our work, like the changes to our work environments brought on by automation, could mean the neighborhood we live in doesn’t fit us anymore. We may have changing preferences on where to live if we work from home or change jobs more often, mainly if we chose our homes based on a 30-minute commuting distance from the office like many others have in the past.⁹

We need to start planning for how automation will change our lives outside of work. When choosing where to live, what home to move into, and what degree to pursue, first check if your choices can help automation-proof your future. What’s the best location for your job and other opportunities, should your position get automated? What type of educational background will help you ride the wave of skill-biased change coming to the work world? These questions may come up sooner than you think. Because in many ways, the automated future has already arrived.

Want to Innovate? Stop Hiring the Safest Option

After a three-month hiring process, my friend finally got the call. The job they were uniquely qualified for went to someone else. That person was an industry insider who was twice their age. Despite having skills the job posting mentioned no other applicants had, my friend didn’t have enough years at that seniority level or enough experience in the industry.

This sounds perfectly justified; who could argue with seniority and experience? But this role needed skills people don’t learn in that industry. They needed outside expertise to match the criteria they asked for. This team says it’s trying to innovate from within. So why not start with who they hire?

Innovation. Disruption. Creativity. Agility. Fearing the skills gap and the looming future of work, companies across industries use these buzzwords to describe what they’re looking for. And with a retail apocalypse, low unemployment, and automation at our heels, leaders are worried. Companies turn to innovation, hoping to disrupt before they become disrupted. This all sounds good. But what do companies really do?

They set up innovation hubs, but isolate them. They set up creativity boot camps, but they don’t design processes to turn ideas into successful products. Corporations donate to university innovation centers and fund design competitions, but entry-level jobs still require 3 years of experience. This say-do gap pays lip service to innovation.

There’s no silver bullet to magically become an innovative organization. But here’s a good first step: stop hiring the safest, most traditional person. What I mean is, stop hiring people with the same academic background as the rest of your team, who have already been doing your target job for years, and who only come from your industry. Stop choosing similarity over skill.

“Why?” you might ask. “It’s safer that way. Nobody got fired for buying IBM.

You’re right. It is safer. And that attitude stops your company from embracing innovation. Innovation takes risk. If you aren’t going outside your comfort zone or bringing people in who think differently, how can you benefit from diverse-thinking teams?

Build company innovation by making better hiring choices

Here’s why innovation comes from making smarter, but less traditional, hiring decisions.

Contrary to what we all assume, previous experience is hardly related to job success1 . In fact, a meta-analysis of 81 real-world studies covering more than 10,000 employees found that years of pre-hire work experience is essentially uncorrelated with actually job performance (6%) and very weakly related to training performance (11%). Knowing this, perhaps we can use work sample tests to measure crucial skills instead of relying on unrelated but easy-to-see information.

Innovative, high-performing teams have more diverse functional backgrounds. Across four research reviews2 with thousands of teams in each, teams with higher job-related diversity are shown to have more work innovation3 and better performance. By looking outside our niche, we can build diverse-thinking teams that create new ideas and products like Gmail, Google Maps, and Slack.

The stereotypes we have for who fits in our industry, our company, and our role are limiting. We prefer people who are more attractive4 and taller5 ; we even shift our criteria6 to get the prototypical person hired. These stereotypes are so powerful that people overwhelmingly stick with the status quo: one non-traditional candidate out of four has a near-zero chance7 of being hired. But we can change the status quo: by changing who we attract and hire, we can make it easier to innovate from within.

New ideas come from outside the “safe zone”

Let me tell you a story. Lemonade, an insurance company built on technology, grew from nothing to one hundred million dollars of revenue in three years. They are ranked #1 by consumers for renter’s insurance and they are the most searched-for brand in their category in major states like Texas. All in all, it’s a sweet success story. What should Lemonade’s 100-year-old competitors do?

Instead of solving their own customer challenges to provide a superior product, State Farm launched an attack ad against Lemonade. T-Mobile’s parent company launched a lawsuit over their company colour. Other competitors created copycat brands, including Liberty Mutual’s “Lulo”, complete with an eerily similar logo and benefits page. See for yourself:

Source: Lemonade’s blog post about copycat brands

Yesterday, I saw an ad that tried to shame me for getting insurance in minutes. As a customer, why would I choose a company where I’ll face more hassle and frustration? With established competitors reacting to these threats with fear instead of creativity, it’s no surprise that Lemonade’s cofounders didn’t come from inside the industry. In fact, Lemonade workers say they never expected to work in insurance. This company’s success is unlikely to come from a homogeneous team saying, “this is the way we’ve always done things”. Just like my friend, Lemonade’s employees wouldn’t have passed the industry experience or “years in the role” test.

“Lemonade is one company,” you might say. Yet Microsoft is creating new products and entering new markets by changing who they bring into their company. Their inclusive hiring strategy taps into an ignored talent pool: people with cognitive and physical differences. These folks have lots to offer, but they are hugely excluded from the workforce. You may have seen Microsoft’s “We All Win” Superbowl ad about kids with physical differences finally joining their friends to play video games. But you might not know about Microsoft’s Learning Tools applications, a new way to help children read with cognitive or learning differences. This new service came from an employee hackathon, where a functionally diverse team of developers, speech pathologists, and reading specialists came together to innovate to solve an unaddressed challenge. Microsoft is creating new products as we speak because they broadened their hiring.

Of course, changing who you hire is only one step towards innovation. But by starting here, we defend against the forces that push us towards homogeneity. The more similar our company is, the narrower our talent pool will be. The stronger our culture of conformity, the more likely workers who think differently will leave. We need to design processes to make hiring for innovation easier. Fortunately, we can take controlled risks and design for diverse-thinking teams by stepping out of our safe zone.