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News from Members The impact of digitalization at the workplace

The impact of digitalization at the workplace

March 22, 2018

Author: Constantin Măgdălina, EmergingTrends & Tehnologies Expert

Few industries will escape the roller of digitalization. Recent studies show that 30% of the industry sectors’ revenues will be achieved through new business models by 2020. Digitalisation constantly generates new business models. At the same time, it has a major impact on society and employees.

Measured in the lives saved by increasing safety in the workplace, byreducing the time of purchase and lowering the costs for consumers, digitalization is no longer an abstract concept but part of our daily program, in the private life, and especially at work.
Digitalization uses the IT infrastructure and the Internet as a technological support. According to the World Economic Forum, companies which carried out the digital transformation have on average 26% higher profits than traditional companies. However, the use of technology is only a mean wherebycompanies couldgenerate transformation,and not an end in itself. Digitalization is as much about technology as is about the way it transforms the lives of people at work. From this point of view, we distinguish the following three major components:

1) Resetting the mentality
The first component of this transformation is changing the way of thinking what you do. If you work in retail you can easily find out if a product is in stockby using the computer. Furthermore, via a smart tag (with sensors connected to a computer),you can identify the location of the product in the warehouse and the quantity on stock, whether the package is expiredor was opened,and if the temperature is optimal for keeping the product in the warehouse.

Thus, the frame of reference changes from simply identifying the product and selling it, to the approach of the entire process from procurement to sales. In these circumstances,the inventory of products is made in real time, stock rotation is monitored better and the financial resources are easier released. The employee is accountable to think the business end-to-end and is empowered by the new role to go up the rank. In other words, by digitalization every soldier carries a marshal baton in the haversack.

2) Technology serving employees
The second component of the digital transformation refers to harnessing technology for the personal benefit of the employee. The Internet facilitates matching better the demand and supply of labor, products and tasks to fulfill. On one hand, it gives employees the flexibility to work, carrying out work at home. On the other hand, it enablesemployees to work on their own and freelancd to round out their income. It is common for service providers to outsource routine tasks, and not only, to worldwide freelancers by accessing specialized platforms. In "the platform economy", as it is known, the employees have more jobs and sources of income as well. The role and the meaning of the employment market are in question.

The schedule, minimum wages, payment of the contribution to the unemployment fund, taxes and benefits are indicators that still governs employer-employee relationship. As the number of jobs will increase freelancing independent job type, it is very likely to witness the redesignof employment market, of freelancers contributions and their collecting approachand employee status due to digitalisation. According to a recent study, in Romania, in the next three years, the number of full-time employees will decrease by 17%, the number of employees part time will increase by 32%, while those with collaboration contractwill increase by 31%.

3) Preparing people for future technologies
The third component of the digital transformation envisages preparing people for future technologies. Economic history shows that innovations like the steam engine, electricity or assembly line had a disruptive effect. This led to the loss of many jobs in the short term, but in the long term these job losses were offset by the creationof new ones. New jobs, more productive and more lucrative, brought a substantially improvementto the living conditions and prepared people for other innovations that were to occur.
This time digitalisation leads to replacement of routine jobs resulting from standardization of the industrial revolution (eg. by automating processes using robots) and increases demand for highly qualified skills and non-routine jobs. From this latter point of view, it is quite possible that in a first phase, digitalization will have a polarizing effect of increasing demand for experts and paying them substantially compared to low-skilled workers. Employees who adopt digitalization as a modus operandi will have a competitive advantage in the job market and will be better paid than those who are less agile. In the second phase, the job market will be more balanced as digital literacy is disseminated on a large scale.

So, the digitalization regards not only technology, but rather its transformation effect on employee and workplace. This transformation comprises three major components, specifically: changing the way employees think, leveraging technology for the personal benefit of the employee, preparing people for future technologies. These components overlap on a wide range of social and technological developments that will affect the way we work, we do our shopping and live our lives in the digital world.

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About Constantin Măgdălina
Constantin Magdalina has a 8 years working experience, while he performed in multinationals both in Romania and abroad. Constantin owns a Master in Marketing and Business Communication at the Academy of Economic Studies Bucharest. He is certified Lean Six Sigma and ITIL which provide him a good understanding of processes and transformations within organizations. The Chartered Institute of Marketing and Hubspot certifications furthered on complemented his expertise and knowledge in business. In those over 4 years working activity at EY he initiated and conducted studies which analyzed different aspects related to the business environment in Romania such as the economic growth predictions of companies in 2013-2016, knowledge management, the buying experience in the age of digital consumers, social media 2013-2015, the utilization of mobile devices in Romania. He is the author of numerous articles on topics related to innovation, the efficiency of business processes, social media, the consumers’ buying experience in the age of digital, trends and emergent technologies. He is invited as speaker at numerous events and business conferences.

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