Death of the office

 

In the spring of 1822 an employee in one of the world’s first offices – that of the East India Company in London – sat down to write a letter to a friend. If the man was excited to be working in a building that was revolutionary, or thrilled to be part of a novel institution which would transform the world in the centuries that followed, he showed little sign of it. “You don’t know how wearisome it is”, wrote Charles Lamb, “to breathe the air of four pent walls, without relief, day after day, all the golden hours of the day between ten and four.” His letter grew ever-less enthusiastic, as he wished for “a few years between the grave and the desk”. No matter, he concluded, “they are the same.”

The world that Lamb wrote from is now long gone. The infamous East India Company collapsed in ignominy in the 1850s. Its most famous legacy, British colonial rule in India, disintegrated a century later. But his letter resonates today, because, while other empires have fallen, the empire of the office has triumphed over modern professional life.

The dimensions of this empire are awesome. Its population runs into hundreds of millions, drawn from every nation on Earth. It dominates the skylines of our cities – their tallest buildings are no longer cathedrals or temples but multi-storey vats filled with workers. It delineates much of our lives. If you are a hardworking citizen of this empire you will spend more waking hours with the irritating colleague to your left whose spare shoes invade your footwell than with your husband or wife, lover or children.

Or rather you used to. This spring, almost overnight, the world’s offices emptied. In New York and Paris, in Madrid and Milan, they ready themselves for commuters who never come. Empty lifts slide up and down announcing floor numbers to empty vestibules; water coolers hum and gurgle, cooling water that no one will drink. For the moment, office life is over.

Even before coronavirus struck, the reign of the office had started to look a little shaky. A combination of rising rents, the digital revolution and increased demands for flexible working meant its population was slowly emigrating to different milieux. More than half of the Ameri­can workforce already worked remotely, at least some of the time. Across the world, home working had been rising steadily for a decade. Pundits predicted that it would increase further. No one imagined that a dramatic spike would come so soon.

It’s too early to say whether the office is done for. As with any sudden loss, many of us find our judgment blurred by conflicting emotions. Relief at freedom from the daily commute and pleasure at turning one’s back on what Philip Larkin called “the toad work” are tinged with regret and nostalgia, as we prepare for another shapeless day of WFH in jogging bottoms.

But we shouldn’t let sentimentality cloud us. Offices have always been profoundly flawed spaces. Those of the East India Company, among the world’s first, were built more for bombast than bureaucracy. They were sermons in stone, and the solidity of every marble step, the elegance of every Palladian pillar, were intended to speak volumes about the profitability and smooth functioning within. This was nonsense, of course. Created to ensure efficiency, offices immediately institutionalised idleness. A genteel arms race arose as managers tried to make their minions work, and the minions tried their damnedest to avoid it. East India House, in which Lamb worked, could give call centres a run for their money in the art of micro-managing. At the start of the 19th century, the company introduced an attendance book for employees to sign when they arrived, when they left and every 15 minutes in between. Not that it proved much use. “It annoys Dodwell amazingly,” wrote Lamb. “He sometimes has to sign six or seven times while he is reading the newspaper.”

The first offices belonged to governments or quasi-government bodies like the East India Company. Running a country, let alone an empire, requires a lot of paper to be pushed and governing proved simpler when all those functionaries were in one place. But it was the Industrial Revolution that really changed things. Coal, steel and steam started to spin the wheels of the English textile industry ever faster and railways unspooled across the countryside. The new steam trains shuttled ever more workers into the cities, where they plumped themselves behind desks in order to practise ancillary professions – finance, law, retail – that flourished on the back of heavy industry. The rhythms of the countryside were left behind. Work, which had once been patchwork, piecemeal and often weather dependent, became the fabric of life itself.

The most transformatory aspect of offices was less the buildings themselves than the sheer amount of time we spent in them. This would have seemed alien to many earlier societies. Mary Beard, professor of classics at Cambridge University, notes that elite Romans strived to switch off as much as possible. “Our division between leisure and work is reversed in the Roman world. What we mostly do is work and, when we’re not working, we’re at leisure.” In Rome it was the other way round for the elite: “The normal state of play is otium, it’s leisure. And sometimes, you’re not at leisure, you’re doing business, which is negotium.” Though the English word “business” has an inbuilt aura of action and industry, the Latin neg-otium – literally “not leisure” – has an almost grudging sense of pleasure denied.

Romans didn’t have to go to a special place to work. Their tablets and styluses were every bit as portable as our own, a feature that elite Romans took full advantage of. Two thousand years ago Pliny the Younger, an author and lawyer, wrote a letter to his friend Tacitus. He had found, he said, a splendid new method of working. Instead of going about his business at a desk, he had decided that day to combine it with a boar hunt. He sat next to his nets “not with boar spear or javelin, but pencil and tablet, by my side”. After expanding on the pleasure of his method for some time, Pliny (the office boar) concluded that this was a remarkably productive way to work since “the mind is stirred and quickened into activity by brisk bodily exercise”. He concluded by advising Tacitus, “whenever you hunt, to take your tablets along with you”.

Few office workers have been indulged to this extent. In the 20th century, the people who had once designed factories turned their attention to offices. The moving parts in these machines were humans and their output merely paper but, it was reasoned, the same principles surely applied. In America teams armed with stopwatches, and a firm belief that a well-oiled office was a wonderful thing, recorded how long each task took. Anything that added extra tick-tocks of time received a cross in their recommendations. Frederick Winslow Taylor, who pioneered time-and-motion studies in the 1890s, concluded that workers functioned best when seated at lines of desks with flat tops, as though in a school-­examination hall. The fact that other studies subsequently found that workers largely work best when being observed for studies on how well they work mattered not a jot. The open-plan office had been born.

When time-and-motion studies examine offices today, their results can be dispiriting. Office-work takes up not merely the bulk of our time but the best part of it, the hours when we are alert and alive. Home, and its occupants, has the husk. Most managers spend at least 20 hours a week in meetings, according to a study by Bain & Company in 2014. Over the course of a lifetime that amounts to nearly five full years. Many of these meetings, in wistful retrospect, might have profitably been skipped.

But getting work done has never really been the point of offices. In 2004 Corinne Maier, a French psychoanalyst who at the time was working at EDF, the French electrical giant, published a book called “Bonjour paresse”, or “Hello Laziness”. The critique of corporate culture became an instant international bestseller. Maier argues that, far from aiding efficiency, offices are “useless” since workers “lose a lot of time going to meetings and speaking the jargon and doing in fact very little work”. She found that she could “do everything I had to do in just two hours in the morning”. Thereafter she busied herself with her own projects, which included writing an academic thesis and several books. “I was very efficient,” she says, cheerfully. EDF, evidently considering that this was not the sort of efficiency it had in mind, sent her off to a disciplinary hearing.

Maier might have become a bestseller but on the whole writing about offices is not – at least in the West – an instant route to stardom. Lamb’s letters are typical. His correspondent for that first, springtime letter was William Wordsworth, the great Romantic poet, who filled his days with walks in the Lake District and his pages with dancing daffodils. Lamb, by contrast, filled his days in London’s financial district and his pages with the price of tea. Though Lamb’s is the life we lead, Wordsworth is far better remembered.

It’s not just poetry but fiction that tends to ignore the office (China, where top-selling novelists write books with such thrilling titles as “The Civil Servant’s Notebook”, is a rare exception). Though great writers have tackled the subject, including Balzac, Dickens, Flaubert, Melville and Kafka, they do so more in satire than celebration. Joshua Ferris, an American novelist, won literary plaudits for “Then We Came to the End”, a novel that sustained a narrative in the first-person plural to demonstrate the obliteration of individual character by corporate identity. But more often than not the office, which is ever present in our life, is a great absence in literature.

Poets have been even more scathing. John Betjeman wished for bombs to fall and “blow to smithereens/Those air-conditioned, bright canteens”. In “The Waste Land”, T.S. Eliot (who had once worked in Lloyds Bank) saw the crowds of commuters crossing London Bridge in terms of Dante’s vision of hell: “I had not thought death had undone so many.” Walt Whitman sneered at clerks as men “of minute leg, chalky face and hollow chest”.

There is more than a dash of superiority in such attacks, but there are good reasons to be critical of offices. Many of the more recent examples are aesthetic embarrassments. Where Ancient Rome had the Colosseum, Renaissance Florence had Brunelleschi’s dome and Byzantium had the Hagia Sophia, we have endless, interchangeable glass-and-steel boxes. This, says Thomas Heatherwick, a British designer, is because the design of offices – indeed all public buildings – has been “lazy”. In the past, he says, workplaces “could get away with just being a desk”, much as shops could get away with “just being somewhere which had stacks of socks or stacks of underpants”. The digital revolution means that such complacency risks redundancy. Now, says Heatherwick, there has to be good reason for you to leave your home, otherwise “why would you go?” Time for the office to sharpen up.

Like a dad at the disco, the office has been trying to do this for a while. Daring architects have broken the mould to construct buildings in the shape of gherkins, cheese graters and walkie talkies – and that’s just in London. To change the stale spaces inside, startups introduced ping-pong tables and ball pits (“dumb fun”, sniffs Heatherwick). Then they offered free food in an attempt to keep workers perpetually in their embrace. Who needs to go home for dinner, when your company will provide you with a tastier one than the pot noodle waiting in your cupboard? And then came WeWork, a sub-letting company that somehow drew cult-like adulation by giving out free biscuits and beer. It helped that its chief executive was Adam Neumann, a man who looks like Christ reimagined by Mattel, with a Ken-like sweep of hair, dazzling white teeth and a firm belief in his power to save us from the hell of offices without cucumber water and succulents. For a while everyone believed in Neumann. Until, suddenly, they didn’t. Last year, WeWork’s valuation fell to a sixth of the $47bn that had once been mooted and Neumann resigned. Offices, of course, needed to be more than a workplace with superior snacks. Heatherwick reckons they should be inspiring “temples” in which to toil, places of beauty that we can admire, even love. It is telling that though his company does have offices, he brands his practice a “studio”. The word office, says Heatherwick, “brought me down”.

Offices can be not just offensive to the eye but harmful to the body. Sitting isn’t quite the new smoking, but it certainly won’t do you any good. A life lived on one’s bottom increases the risk of heart disease, type-2 diabetes, some cancers and all manner of back problems. Offices also entrench social inequalities. The top dog is more likely to hire in his own image, perpetuating male privilege. In 2018 there were more men called Steve than there were women among the chief executives of FTSE 100 companies. Offices even tend to be more physically unpleasant places for women than for men: as a recent study showed, the ambient air temperature is generally set to suit “the metabolic rates of a 154-pound, 40-year-old man” (probably called Steve). Men are just fine; women freeze.

The office has further-reaching patriarchal ploys up its sleeve. Chief among these is its response to children. Or rather lack of it. For most of history, workplaces ignored children entirely (the run on deposits precipitated by the arrival of the Banks twins at their father’s place of work in “Mary Poppins” shows the dire consequences of offspring turning up at the office). The Angel in the House, as Victorians fondly referred to their wives, was assumed to handle all that. In the 20th century the angel lost her wings as women entered the workplace. Offices responded to this momentous social change by making no concessions at all. As a result, working women had to straddle the gap between angel and executive, a cause of immense and continuing stress. Even more tryingly, they had to endure endless stock photos of women in suits holding babies and tearing out their hair. A minor branch of the publishing industry sprang up offering books with querulous titles such as “I Don’t Know How She Does It”.

The office’s ongoing indifference to children has resulted in the social phenomenon that Emily Oster, professor of economics at Brown University and author of “Cribsheet”, a data-led guide to raising kids, calls “secret parenting”. Parents strive to keep up the old pretence that children don’t exist, deploying techniques that range from not putting up pictures of one’s children at work, to pretending that they themselves are ill so that they can care for genuinely sick infants lest, says Oster, people “think [they’re] prioritising parenting”. As a working parent, she says, “someone is always more or less running around in the background”.

Despite the commute and the colleagues, the sitting and the stale meetings, offices bring many of us something else too: joy. Lucy Kellaway, who wrote a long-running column in the Financial Times on the absurdities of office life, talks of the “great artificiality” we embrace the moment that we step into an office. “We pretend that our clothes are always in order and that we are entirely professional and impersonal. Whereas probably in our heads and definitely in our homes there is an awful lot of unravelling and farting going on.”

And what a wonderful thing that artifice can be. Now that we are all working from home, amid the children, the toast crumbs and the laundry, we are realising that the pretence of an orderly life at the office is also a liberation. It allows each day to have its own architecture, its rhythms of departure and arrival. Putting on a perfectly ironed silk shirt or a crisp suit and leaving the house may be contrived but it is also, says Kellaway, “one of the beauties of working life…It allows us to be a different person. And we’re all so fed up with who we are, the opportunity to be someone else, someone a little bit more impressive, is just so tempting.” When such an escape is denied us, that allure may only grow.

And so, for all the threat faced by the office, there is also cause for optimism about its future. These days the “hyper-physical…is so cherished,” notes Heatherwick. Sales of records are at their highest in years, book covers have rarely looked so beautiful. Though many of us might have been loth to admit it until this spring, all those desks and all those people, all that bustle and time-wasting, have their benefits.

Humans need offices. Online encounters may be keeping us alive as social beings right now, but work-related video meetings are too often transactional, awkward and unappealing. After the initial joy of peering into each other’s houses on Zoom, we are confronted with people’s heads looming even closer than we see them across the desk at work, and we gaze in horror – half of it self-awareness that we, too, must look awful – at thinning hair and double chins. We become freakish specimens rather than people. No Skype chat can replicate what Heatherwick calls the “chemistry of the unexpected” that you get in person. Offices may not fill the pages of poetry anthologies but, says Kellaway, they “can be as moving as anywhere on Earth. Because what moves us is not sitting at our computer, it’s the relationship that we have with people.”

For all his grumbling, Charles Lamb believed something similar too. When Wordsworth seems to have grown a trifle too smug about the sublime joys of the natural world, Lamb snapped back. “I don’t much care if I never see a mountain in my life.” But he did care for the city and he certainly loved offices. All his complaints were, he wrote, mere “lovers’ quarrels”. Above all, he loved his desk. For it was that “dead timber of a desk that makes me live”.

 

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Willing and able – Building a crisis resilient workforce

Most crisis response planning assumes that people will turn up for work when they are needed, even during some of the most extreme events. But will this fundamental assumption really hold true? This is the question MWC, in association with King’s College London and Public Health England explored to suggest a model and recommendations for organizations to develop a more crisis resilient workforce.

 

Most existing crisis response plans focus on structures, protocols and processes of an organization’s response whilst leaving the human aspect of response to chance assuming that people will turn up for work even during the most extreme events.

But our research uncovered that in certain more severe scenarios, this assumption may not hold true and organizations need to find ways to improve the situation.

To do so they should consider the following points to build a crisis resilient workforce:

Human factors – understand how people may respond and why

Organizations should remove any assumptions about employees’ willingness to come to work in a time of crisis and recognize that risk perception is a key determinant of willingness. To palliate this issue organizations should make sure that people understand the importance of their role and adopt an inclusive approach when developing the crisis response plan to embed and address employees’ concerns.

Information and communication – tell them what they need to know

Organizations should ensure they educate their employees on the actual risk presented by different crisis. When a crisis does occur it becomes important to provide accurate and authoritative information about the situation. Organizations should consider what the authoritative sources of information might be and where or how they can be accessed and used as part of their planning considerations. Also, they should provide staff with recommendations and give clear reasons for those recommendations.

Organizational interventions – provide practical support

In order to increase employees’ willingness to come to work during a crisis organizations need to consider remote access availability, logistical support that could make it easier for employees to get into work as well as provide incentive such as psychological care or medicine to help them cope with the crisis.

 

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Practical workforce strategies that put your people first

In moments of uncertainty and concern, it’s not only about what leaders of organizations do but equally how they do it that matters.

COVID-19 is taking the world by surprise, causing a great deal of uncertainty and raising issues that require thoughtful, people-first responses. This newly identified coronavirus was first seen in Wuhan in central China in late December 2019. As we enter March 2020, the virus now has a global reach on all continents except Antarctica. As the virus spreads, communities, ecosystems, and supply chains are being impacted far beyond China.

In January 2020, ahead of the Lunar New Year and as health concerns were still growing, MWC conducted a survey in China of human capital policies and practices. The survey drew over 1,000 responses from enterprises operating in China, including a cross-section of private, foreign, and state-owned enterprises as well as not-for-profit organizations.

The survey shows that from the beginning of the COVID-19 outbreak, the immediate focus of employers has been on ensuring the health and safety of their employees:

  • Ninety percent of the employers believe it is an urgent requirement to provide their employees with remote and flexible work option.
  • Energy, resources, and industrial companies encounter the biggest constraints in offering flexible working and remote solutions, and have focused on providing epidemic protection—they have been ensuring sanitation, personal protective equipment, and safety of the workplace environment.
  • More than half of government and public service entities are focusing on addressing employees’ psychological stress.

Authorities internationally are taking decisive action to respond to this emerging public health threat, which has caused the business community to consider the adequacy of its own preparedness measures.

It’s important to remember we have faced crises like this in the past and will face them again in the future. We need to be prepared, rational, and even altruistic in response. If there is disruption, there will also be recovery, so how we act in a time of crisis can also inform our long-term impact.

Responding to the immediate challenge: a framework to view the impact on your people.

 

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Workforce planning in the automation era

 

DECEMBER 19, 2019

In brief

  • In the age of automation, organizations must understand the blueprint of their current workforce in order to build future-ready teams.
  • In light of this, strategic workforce planning helps enterprises understand their workforce dynamics and evolve to meet their long-term needs.
  • Backed by learning analytics, organizations are now much better placed to reskill their workforce for the future.


Approximately half of all jobs will be materially impacted by automation in the next 15-20 years, according to the OCED Employment Outlook 2019: The Future of Work. What’s more, recent Accenture research finds that 79 percent of executives agree that work is shifting from roles to projects—challenging both the function and makeup of the workforce as we know it.

Several other trends are also contributing to this radically shifting workforce landscape.

The gig economy is growing in popularity. As more and more employees look for different opportunities, many are not choosing permanent jobs. In 2018 alone, 56.7 million Americans freelanced, and it is predicted that by 2027, the majority of America’s workers will be freelance. Those choosing part-time work or even working for multiple employers at one time will need to be factored into evolving workforce models.

Advances in digital and automation have allowed organizations to gain efficiency and increase productivity. But adopting these technologies means that organizations must plan for their workforce—especially those at risk of being made redundant.

In addition, as many as 40 percent of companies are already reporting that talent shortages are impacting their ability to adapt and innovate. This all serves to highlight the need for organizations to upskill, reskill and cross-skill existing workers.

Apart from people, machines are also becoming a highly important part of the workforce, driving the need for companies to consider their future talent pool and the skills they will need to leverage. In this context, it is unsurprising that many organizations are making the move toward a more dynamic workforce set up.

Enter strategic workforce planning. Advances in digital and automation have allowed organizations to gain efficiency and increase productivity. But adopting these technologies means that organizations must plan for their workforce—especially those at risk of being made redundant.

A new approach to workforce planning

While strategic workforce planning (SWFP) isn’t new, it is more important than ever for organizations to identify their optimal workforce mix and tailor their investment to suit.

In particular, SWFP helps organizations strike the right balance between external contractors and internal workforce, as well as the right blend of human and machine effort to drive the business forward.

SWFP helps to serve as a key foundation for ensuring organizations are future-ready by taking into account growth requirements and helping to initiate the journey of workforce DNA transformation.

By providing a holistic perspective of the current workforce, and existing as well as future gaps, workforce planning can help organizations assess forthcoming risks and identify quick wins to yield potential savings. This enables organizations to strategize their recruitment and reskilling plans well in advance, as well as ascertain the most advantageous size and workforce mix of the organization both in the short and long term.

For example, using HR transformation analytics, organizations are turning recruitment from what was traditionally often a process based on “gut-feel,” to one informed and backed by advanced data insights. This transformation enables businesses to find the right people at the right time with the most relevant skills from a larger pool of applicants, whilst saving on time and money.SWFP helps to serve as a key foundation for ensuring organizations are future-ready by taking into account growth requirements and helping to initiate the journey of workforce DNA transformation.

In a nutshell, SWFP helps companies to be in a future-ready state, by enabling them to:

  • Have a good hold of the current workforce scenario
  • Be well informed of possible future workforce gaps, facilitating them to strategize gap fulfilment and avoid the probable revenue losses due to those gaps
  • Devise a comprehensive action plan on efficiently utilizing the various workforce types to drive maximum productivity
  • Be well aware of the overtime changes in workforce dynamics and reasons for those changes
  • Design and implement optimal reskilling strategies in line with the changing requirements, at the same time as providing optimal career pathways to their workforce

A dynamic, data-driven perspective

So how can organizations take advantage of SWFP and transform the DNA of their workforce? There are a few different paths organizations may choose to go down—each with their own pros and cons—including off-the-shelf solutions, platform SWFP modules and custom-built solutions.

For some, off-the-shelf solutions might be the preferred option. Tapping into already available, off-the-shelf SWFP solutions from partners such as Accenture can be the accelerator for the organizations to initiate the journey of workforce transformation. These solutions are agile and fast-paced with customization capabilities as per the organization’s business and functional requirements.

Alongside the option of ready-made solutions, there are custom solutions. These could range from low-scale solutions tailored to suit the specific context, through to industrialized models based on best practices across industries and organizations. These can be easily integrated with the organization’s own HRMS systems as required and act as a reusable framework that supports continuous assessment and strategizing.

Custom solutions follow a comprehensive approach starting from current scenario assessment to gap fulfilment and are backed by assessment of impact due to the changing nature of work and workforce needs.

A helpful steer

Often organizations are either unaware of the impact and value of HR analytics or they don’t know where to start or how to move ahead. To understand the unique value SWFP holds for them before they embark on their SWFP journey, organizations must seek advisory support.

For example, the head of operations at a large oil and gas firm might seek SWFP and advisory support to understand how workforce dynamics could help drive a growth target of 10 percent over five years. Using HR transformation analytics, the executive could determine the optimal workforce makeup to support that growth and implement accordingly, assessing for ongoing performance and success in turn.

Apart from selecting off- or on-the-shelf solutions, advisors can help with a number of other matters, too:

  • Managing the data associated with setting up a workforce analytics unit
  • Offering guidance on the difference between reporting and value-added analytics
  • Understanding the impact of workforce performance and behavior on company performance metrics
  • Targeting and connecting with senior decision-makers, who hold the investment resources

To understand the unique value SWFP holds for them before they embark on their SWFP journey, organizations must seek advisory support.

A strategic outlook

Increasingly, the workforce consists of more than just humans. Robots, chatbots and other automated technologies are entering the workspace, driving up productivity, efficiency and satisfaction levels.

In this radically shifting workforce landscape, SWFP can empower organizations, provide direction and actionable insights. Some of the questions it can help to answer include:

  • What is the impact of future demand scenarios or supply calibrations on my organization’s overall workforce requirement?
  • Which business-critical segments will my organization need to prioritize for future readiness in order to minimize impact?
  • What actions should my organization prioritize to try and ensure a lean approach to building a more productive and more agile business?
  • How can my organization minimize impact on current processes whilst still aligning with the future workforce and growth requirements?
  • What is the optimal FTE requirement at the most granular level of decision-making?
  • Which fulfillment strategy is relevant for the organization based upon business objectives and organizational constraints?

On a macro level, legal discussions, which aim to consider who is responsible for the robot workforce, have already started and will only be accelerating in the years to come. The human-machine balance is also firmly on the planning agenda. The next frontier for HR to claim—no matter how futuristic it may seem—will be robot well-being and productivity.

The only thing left for those organizations that want to tap into the potential that this future workforce holds is to start planning now.

Get in touch to learn more about how to get started with strategically planning the workforce of the future.

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Workforce 2025: Financial Services skills and roles

 

FEBRUARY 16, 2019 RESEARCH REPORT

In brief

  • Seven to 10 percent of tasks in the financial services workforce could be automated by 2025, while 43-48 percent could be augmented with technology.
  • Resulting cost savings and productivity gains could deliver up to $140 billion of cumulative value for the North American industry.
  • Organizations must take a strategic approach to augmentation and automation to emerge as the winners from this time of change and innovation.

The adaptive financial services workforce of tomorrow

The worlds of work and of financial services are changing at high speed. Consumer expectations are rising as financial services companies face growing competition from digital startups and technology companies that are setting new benchmarks for customer and workforce experiences. At the same time, a new generation is entering the workforce, bringing with it new demands of the workplace and new ways of thinking and collaborating.

From big data to the Internet of Things to intelligent automation, the pace of technology change, too, is accelerating. Disruptive technologies that automate mundane tasks and processes, or that augment human expertise, creativity and skill with real-time information and new capabilities will completely change the shape of the financial services workforce over the next five to 10 years.

Accenture economic value modelling estimates that Seven to 10 percent of tasks in the financial services workforce could be automated by 2025, while 43-48 percent could be augmented with technology. The resulting cost savings and productivity gains could deliver between $87 billion and $140 billion of cumulative value for the North American financial services industry between 2018 and 2025.

Despite the size of this opportunity, automation projects at many banks, insurance carriers and capital market firms are small-scale, tactical and siloed by nature, practices that dilute full value capture.The cost-savings financial services companies could reap from higher levels of automation are not insignificant. However, they can unleash the most value by focusing on the things that AI and humans do best together, to drive large productivity gains.

Unlocking the new financial services workforce

If financial services organizations are to unlock the value proposition of the new workforce and the next wave of digital technologies, they need to take a top-down, cross-functional view of the roles and functions in the enterprise to understand where they can drive the most value. Then they need to focus strategically on the roles that are best suited to being reinvented through the application of automation, and that offer the most potential for rapid and sustainable return on investment.

Finally, they should have a point of view on what to do with the capacity released through automation, consistent with the values of the organization. How financial services business leaders respond to the challenges and opportunities of a changing social, economic and technology landscape today will determine their readiness to compete in a different world tomorrow.

Unlocking up to $140 billion of industry value

Productivity gains from augmentation could deliver $72-117 billion in value to the North American financial services industry between 2018 and 2025, while cost-savings from automation could total $15-23 billion.

Projecting cost-savings and productivity gains through automation and augmentation for the North American financial services sector, 2018-2025

 

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