IN the 2017 book Hit Refresh, Satya Nadella, the chief executive officer of Microsoft, remarked of the fourth industrial revolution or 4IR: “Artificial intelligence, mixed reality and quantum computing are going to be game changers … (they) will be more profound in (their) impact on the economy than those revolutions that came before”.
True enough, 25 per cent of jobs in the United States are at high risk of displacement from AI and automation. Indeed, 40 per cent of tasks can be automated with current technologies in the US.
The McKinsey Global Institute, a consultancy, predicts that by 2030, AI and automation could replace 30 per cent of the world’s current workforce. The European Union Business-Review estimates that by next year, robotics will devour 800 million jobs.
Automation at Malaysia’s Top Glove, the world’s largest glove maker, caused 2,000 workers to be laid off this year.
Recently, Human Resources Minister M. Kula Segaran highlighted that automation will render obsolete up to 54 per cent of our jobs.
Global competition and economic slowdown combined with automation create a combustible mix that often ignites organisational restructuring and consequent job losses.
Malaysia Airlines Berhad, formerly Malaysia Airlines System, for instance, restructured in 2015 after bleeding red in the preceding years from heavy competition. It resulted in MAS retrenching 20 per cent of its 30,000 staff.
The decline in oil prices has also resulted in some companies flattening their structure. Given a sluggish world economy, global players too have started to shed staff as well. In its restructuring push, HSBC, an international bank, is expected to cut 10,000 workers from its payroll while Hewlett-Packard, a personal computer manufacturer, expects to lay off 9,000 workers some time this year.
An ageing population compounds this grave situation. The United Nations Economic and Social Commission for Asia and the Pacific estimates that the population aged 60 and above in Southeast Asia will double to 21 per cent by 2050.
With the population living longer, workers will have many more productive years ahead after a forced retirement. It will be a sheer waste of human capital should these retrenched workers not be reemployed.
Organisations and governments have a moral duty to provide transition support by way of reskilling and upskilling the retrenched. This will ensure that they can continue to remain productive. Transition matters. For every retrenched worker there are, on average, five dependant family members.
An individual cannot make the transition on his own quickly as it is an emotionally-taxing experience. The emotions range from shock to anger and rejection that it is happening to them. When they come to accept the situation and avail to opportunities for reemployment, the healing then takes place.
Global companies, such as Samsung Electronics, have outplacement centres. These help an exiting employee find a job. This is an important first step. But full transition support is required. Only then will an organisation be able to address the underlying psycho-social and emotional issues to ensure that the worker’s energy and motivation remain buoyant for the next job.
This is where the Corporate Development Centre, or CDC, of Khazanah Nasional did an exemplary job at providing transition support to the 6,000 employees retrenched by MAS. The CDC served as an employment agency, outplacement gateway, training centre and counselling facility, all rolled into one.
Its services were so personalised that it provided hope and confidence for each exiting employee. As a result of its stellar effort, 63 per cent were reemployed, 32 per cent went into business, while five per cent took early retirement. The overall satisfaction rate of those served by the CDC was 91 per cent.
This success was due to the CDC playing for the long haul. Not only did it provide training and make the affected employees market-ready, it ensured their successful market re-entry.
The CDC also ensured that those who remained were well-skilled to remain relevant in a restructured organisation. With the mission accomplished, the CDC has since opened its business to other companies seeking transition-support services.
What the CDC experience tells us is that transition support is essential. We, therefore, recommend the following:
FIRST, given its success in providing tangible transition help, the government should continue to fund the CDC. As it now serves a broader spectrum of companies, the CDC should be able to partially defray its expenses.
SECOND, employers need to be educated on responsible retrenchment. That means their responsibility goes right up to resettling the retrenched worker in a suitable job.
THIRD, the government should legislate that companies, especially those prone to market disruptions, should provide transition-support services — either in-house or sourced outside. That way, the government and the relevant organisation will be seen as caring, especially when these employees have given their best years to the company.
FOURTH, workers need to embrace disruptions with the right attitude. They should take ownership of their destiny.
They should see potential disruptions to their jobs as an opportunity to reinvent themselves. They should look ahead in time, say five years, and see what skills will be relevant then. They should equip themselves accordingly.
As Wayne Gretzky, a Canadian ice-hockey player, once said: “I skate to where the puck is going, not where it has been.”