Year of the robot? Back to working at the office, AI, and layoffs – this is what awai

The year 2022 was a year of layoffs, of quiet resignations, of a crisis of…

The year 2022 was a year of layoffs, of quiet resignations, of a crisis of trust between employees and employers, of inflation and of a fight over where the work is done – from home or the office. The waves of layoffs in high-tech have returned, even if partially, the power to employers who want the employees to return to the offices and stop working from home. However, as the recruiters who stayed in high-tech and saw many of their friends laid off will testify, there is still a shortage of talent and companies continue to fight for the experienced and talented workers. The question of where the work should be carried out will continue to accompany us over the next year as well. The wave of layoffs in high-tech and the inflation that erodes workers’ wages will also affect the labor market in 2023. Over the next year, some of the trends that have already started will continue and technology, which for a moment seemed to have stopped shaking the world of work, will return, it seems, to cause revolutions.

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עובדי הייטק משרד אופן ספייס עבודה עובדי הייטק משרד אופן ספייס עבודה

Back to work at the office

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These are some of the trends that will affect the world of work in 2023:

1. The robots are already here, and they will take your job

The predictions for the world of work in 2020 (yes, you read that right) were that robots and automation would eliminate the need for many workers, especially those engaged in manual labor, or those that do not require high training or creative thinking such as drivers and production workers. It did not happen as predicted. According to a report by World Robotics, over half a million new industrial robots were installed in factories in 2021 and still – there is a global shortage of working hands. The real revolution that we seem to be facing in the world of work comes from the direction of artificial intelligence and the threat is precisely to professions that require creativity and knowledge. Artificial intelligence technologies that have seized the spotlight this year are those who produce products (content, images) and not just add insights. ChatGPT threatens to overwhelm content writers and even junior programmers. It is capable of producing complex content and writing code. Jasper, an AI technology designed for creating visual content, promises to change the way marketers operate, OpenAI’s Codex, the way workers code, and other technologies are designed to completely change the professions of lawyers, doctors and investment managers.

The economic uncertainty forces organizations to streamline and become profitable, or more profitable. This means reducing the workforce, or in other words layoffs and becoming more efficient. This means that instead of hiring ten programmers, employers will prefer to hire one or two programmers who will use artificial intelligence tools for their work. Instead of an entire department of content or marketing people, there will be one or two managers who will be assisted by generators, as is the case in other industries and professions. Artificial intelligence cannot yet completely replace human workers, but working alongside artificial intelligence tools is a reality in 2023.

2. Hybrid work will not disappear (for the strong workers)

The hybrid work model – what started as the gospel of the new world of work following the coronavirus – has become in the last year a scene of conflict between employees and employers. The employers want the employees to return to the offices and stop working from home completely, but the power – at least during the high-tech boom – lies with the employees. The tide turned and in 2022 the high-tech layoffs returned the power to the employers. This is true in some cases, but not in the case of in-demand talents. This means that despite the wishes of some employers – the wheel cannot be completely turned back. The hybrid work model will remain with us in 2023 as well, but it will belong to the strong workers, who have bargaining power with the employers.

In many places that allow hybrid work, what remains of the concept is just one day a week when employees can choose not to come to the office. Flexibility or full hybrid work remained mainly in high-tech companies and even there in most cases the employees are asked to come to the office three days a week. The minority are the companies that allow employees complete choice regarding working from home. Only a few technology companies have chosen a fully remote working model. According to McKinsey and Ipsos data from last year, 58% of Americans worked at least one day a week from home and 38% could choose whether to come to the office at all.

3. Employees will stop paying the ‘loyalty tax’

Rising inflation takes its toll on everyone, but private sector salaried workers feel it especially when pay raises, if any, do not keep pace with inflation and their salaries erode. Existing employees do not receive raises and a situation arises where sometimes new employees earn more than existing employees, who pay what is known as the ‘loyalty tax’. Therefore, employees who can will choose to leave for another organization in order to improve their financial situation. A new G-P global survey to which 1,200 workers in Israel responded also found that half of the workers (48%) would consider leaving their job if they received the right offer. 34% of employees plan to change jobs in the next year or two. Of these, 51% are expected to remain in the same industry and 19% will change careers completely. Most respondents are interested in moving into a career in information technology or technology. To change careers, two out of every five workers would be willing to study for up to two years and one would be willing to study for up to four years. One of the main reasons why employees want to move to the high-tech industry is the salary, which is significantly higher than in other fields. Because of the ‘loyalty tax’ more workers will choose to leave in order to be paid according to market values. Employers who wish to retain employees will have to provide the possibility of personal and professional development because they will have difficulty keeping up with inflation in salary increases.

4. Layoffs vs a lack of workers

The wave of layoffs in high-tech and in other industries is expected to continue even in early 2023 and may even worsen. The number of vacant jobs in Israel decreased in November to 141,200 from 151,400 in April. The demand for software engineers decreased from 14,000 in March 2022 to 7,700 in November. There is less demand for workers in the high-tech industry. However, there is still difficulty among employers to recruit employees with specific skills, and they are fighting for talent. In the U.S., there is a severe shortage of workers in certain industries, especially manual workers. While there are over 10 million job vacancies in the U.S., there are about 6 million unemployed.

It may seem strange in light of the layoffs, but the lack of experienced workers with specific skills is expected to continue in 2023 and with it the battle for talent will continue. Employers will continue to invest in employer branding, although not in the grandiose way it was done in the past: less billboards and more in-depth processes.

5. The trend of salary transparency will continue worldwide, but not in Israel

In November, a new salary transparency law went into effect in New York. The law requires employers to publish the salary range for the jobs they advertise. The purpose of the law is to promote equal pay between employees and to prevent a situation where people from minority populations earn less than their peers. The rationale is that pay transparency prevents employers from paying lower wages to women and minority workers since they will know how much to demand. In Israel there is no obligation to publish a salary range for a position, but employers are obliged to publish the gender wage gap in companies with 518 or more employees. The purpose of the Israeli law is also to prevent discrimination in wages, and mainly to ensure women receive equal pay to men.

The issue of diversity and inclusion in organizations and corporate responsibility will continue to be important next year as well, even if less than in previous years of economic boom. The reaction of organizations in Israel to the amendment of the discrimination law by the new coalition is proof that organizations still see importance in the issues of equality, diversity and inclusion and understand that it is ‘good for business’. Therefore, while no legislation is expected to encourage wage equality and transparency in Israel in view of the composition of the new coalition and the anchoring of discrimination in the law, it is possible that the change will come from the organizations themselves.

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