The COVID-19 pandemic has accelerated changes taking place in the labour market, with businesses and employees adopting new technologies and practices that are shaping the future of work. The British Government has been warned by MPs on the Work and Pensions Committee that it needs to act now to prepare for these fundamental shifts - or risk excluding segments of the workforce. 

A new report released today by the Committee argues that whilst new technologies are unlikely to lead to mass unemployment, they will likely change the nature of the labour market and the impact will be varied across different sectors and groups of workers. 

It demands that the government must ensure that any changes do not exacerbate existing inequalities, with younger people, disabled people, women, and people from some ethnic minorities particularly at risk of missing out on employment. 

Throughout the COVID-19 pandemic we have seen how organizations have adapted to sustained distributed work. There is still plenty of debate around the impact on ‘the office', but the consensus appears to be that at the very least most employers will adopt a hybrid approach going forward. 

However, there are also other concerns around how the labour market is taking shape, with the continued popularity of the ‘gig economy' and increased use of automation to carry out manual tasks at work. 

Commenting on the report's findings, Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said:

Deep-seated trends were already driving labour market inequalities. The pandemic has hit fast forward on them. As we emerge, automation and new technologies will continue to transform both how people work and the skills they need to succeed. The Government needs to plan now, to avoid large groups - younger workers, women, disabled people and those from some ethnic backgrounds - being left behind.

Digital dexterity is going to be vital to every worker navigating the rapidly changing world of work, but a digital skills shortage is looming unless the DWP adopts a laser-like focus on helping people get the right training they need for every stage of their career. Those who have lost their jobs during the pandemic need particular support to get back on their feet, so the Government must make sure that its new employment schemes are reaching the right people, with specific help for disabled people.

With the gig economy booming and more and more people employed in precarious jobs, better worker protections are now well overdue. The time for the Government's long-promised Employment Bill is now, so all workers have the legal status they deserve and access to skills training provided by employers.

The economic shock of the pandemic should act as a warning sign as to how quickly the world of work can change. Time is not on the Government's side. The DWP needs to act now to make sure every worker has the skills and job protections they need to thrive.

Key findings

The Committee heard evidence that DWP has not been proactive enough in planning for long-term changes to the world of work, and that by and large it has reacted to change, rather than planned ahead for a range of different scenarios - nor developed a long-term strategy. 

The government needs to acknowledge, according to the report, that whilst new technology has the potential to enhance employees' experience of work - by, for example, allowing for more work-from-home opportunities and removing the burden of mundane tasks - there is also a risk that it could have an adverse impact on worker's rights and wellbeing. 

Given the significant changes in the employment market over the last ten years, the Committee believes it is critical that the definition of employment is updated and clarified to ensure that workers enjoy the legal status that they are entitled to. It states that this is not only key in protecting workers in times of change, but also ensuring access to skills training is provided by or in conjunction with employers. 

The Committee takes particular issue with the government's delay to new legislation. The report states:

The past decade has seen a rise in the number of people in precarious forms of work, such as people on zero-hours contracts and workers in the gig economy. We are disappointed that the Government chose not to announce the promised Employment Bill, which it says will afford greater protections to people in precarious forms of work, in the Queen's Speech 2021. The Government has since reaffirmed its commitment to introducing the Bill, but has not said when it will be published. It should now set out a timescale for its introduction to Parliament.

The government, as a result, is being called upon to urgently bring forward an Employment Bill to enhance the rights of workers in the low-paid and gig economy. 

Furthermore, the report notes that there is an already unacceptably high employment gap between white and BAME workers, which could widen as a result of the changes we are experiencing. The Committee points to research that people from some ethnic minority groups are more likely to work in sectors with jobs at higher risk of automation than other groups - and this cannot be ignored. 

Equally, women are still underrepresented in STEM fields, which are seeing a rising demand for workers. Women are also more likely to work part-time, with part-time work more common in low paid jobs, which again are more likely to be lost to automation. 

Additional recommendations

With the above in mind, the Committee has said that DWP must work with other departments to develop a strategy on how to respond to the impact of new technology on the number of jobs, the skills needed and the differential impact the changes could have on sectors, regions and demographic groups. 

The government should also establish a new publicly funded advisory body to advise on the potential impact of changes in the world of work on different groups in the labour market. And it should ensure both that assistive technology is available and digital skills training is accessible and inclusive to ensure disabled people are properly supported in the workplace. 

The report adds that the UK is already facing a significant digital skills shortage and that demand for new skills will only rise as the labour market changes. The Committee recommends that DWP work closely with the Department for Education to ensure that its skills programmes reflect the changing needs of employers and demands of the labour market. 

In addition, any digital skills training offered should not just be aimed at people in the early stages of their career, but also at older workers who may wish to retrain. 

My take

This report is timely, given the impact of COVID-19 on the labour market already and the changes that we are seeing around the future of work. Much of it is hard to predict for certain, but if the government does nothing in the meantime, in ten years we will have a job market that is outpacing legislation (more than it already is) and people will be left behind. Protections for workers are key and targeted intervention where people need support and guidance is imperative. Not only that, but key to all of this is government departments working together to come up with effective strategies - something that has historically been difficult due to silos and ‘empire building' in Whitehall. That needs to change rapidly, flexible and forward thinking policies need to be introduced, and money needs to be made available now to ensure workers have a positive future ahead of them.