Technological change and the Scottish labour market

A joint research report between Scottish Government and SUC assessing the potential impact of automation on Scottish work places.


Section 3: STUC analysis - evidence from workplaces

This section has been compiled by the STUC and does not necessarily reflect the views of the Scottish Government.

The STUC is Scotland’s trade union centre. Its purpose is to co-ordinate, develop and articulate the views and policies of the trade union movement in Scotland; reflecting the aspirations of trade unionists as workers and citizens.

The STUC represents over 560,000 working people and their families throughout Scotland. It speaks for trade union members in and out of work, in the community and in the workplace. Our affiliated organisations have interests in all sectors of the economy and our representative structures are constructed to take account of the specific views of women members, young members, black members, LGBT+ members, and members with a disability, as well as retired and unemployed workers.

The STUC has worked with its affiliates in order to gain an understanding of how automation and digitisation has impacted the Scottish economy. The purpose of this is to understand how automation and new technologies are already being implemented in workplaces and to identify the direction of travel is in this area. This work, therefore, is not an effort to forecast the future in the longer term but rather to understand what is currently happening or is about to happen in workplaces in Scotland. The purpose of this is to develop a clearer picture of how automation and digitisation is progressing in a real world setting and therefore put into perspective how automation may develop in the future. The following section, therefore outlines the results of research that the STUC has conducted on how automation and digitisation is developing in Scotland, and sets out some of the positive and negatives of these changes as experienced by workers across Scotland.

The STUC conducted desk based research, considered intelligence from senior trade unionists and conducted a survey of union branches. The survey received 99 responses from branches across Scotland based in both the public and private sectors. The branches varied in size, with some representing small employers and small numbers of workers while others covered hundreds and on some occasions thousands of workers. The survey was supplemented by written submissions from unions and discussions with senior officials in order to build as complete a picture as possible of how automation and digitisation is developing in Scotland.

It should be noted that while many branches could identify automation within their workplace, and there are clear examples of workplaces with high levels of automation, there were also branches which struggled to highlight examples of where automation or digitisation had taken place. Around 24% of those responding to the survey stated that no automation or digitisation had taken place in their workplace. While this could genuinely reflect the position of the workplace, it is also possible that it reflects the survey responder’s understanding of the terms ‘automation’ and ‘digitisation’. Interestingly there was some evidence to suggest that at times this could reflect a certain perspective within a workplace, rather than definitively describe the experiences of the workplace as a whole, with unions representing different groups of workers reporting different experiences from the same workplace. One example of this was in the school sector, with teaching unions clear that automation was not an issue, while support staff unions also working in schools identified changes in working practices as a result of automation and digitalisation.

The majority of responders (76%) identified examples of automation and digitisation in their workplace. In general, union branches saw automation and digitisation as potentially problematic, often being introduced poorly and without proper training and support for workers. It was also true, however, that unions could see the potential benefits of automation and digitisation. The level of responses which identified future automation as potentially problematic and the level which identified potential benefits were therefore strikingly similar.

Q21 Do you believe that further automation or digitisation could cause problems in your workplace?

Q23 Do you believe that there are forms of automation or digitisation that your workplace could benefit from?

From the work undertaken with affiliated trade unions through the survey or through discussions with union officials it is possible to identify some issues to be considered around automation and digitisation of the economy. These align with much of the academic literature on why automation might be pursued, the limitations of it and reasons why it may not be implemented. These factors are: technological feasibility and adoption; the cost of developing and deploying the technology; the capacity of the workforce; issues around efficiency, health, safety and wellbeing; and the regulatory framework and legal questions around deploying new technologies.

By considering these issues in turn it is possible to gain a better understanding of how automation and digitisation are impacting the labour market in Scotland.

Technological Feasibility and Adoption

The Frey and Osborne report and many of the other reports that use high estimates of automation are driven primarily by analysing the availability of technology. This approach in many ways assumes that if technology is available then it will be adopted and it will, in the short to medium term, replace jobs. It should not be assumed, however, that because it becomes possible to automate a particular job or even a particular task within a job, that the technology will be adopted within an individual workplace or wholesale across a sector.

Take for example the automation of supermarkets. In many ways this is a sector that has already been exposed to a high level of automation. Self-service checkouts are a feature of most big supermarket stores and customers are now accustomed to operating them. The introduction of such technology has had an impact on jobs and ways of working but it is also evident that a much higher degree of automation and digitisation is available to this sector than has been adopted. A comparison between British and French supermarkets, for example, shows that a higher level of digitisation around pricing and maintaining stock levels has been adopted in France, allowing French supermarkets to operate with much lower staffing levels than in the UK, with a higher degree of price sensitivity and with a greater level of automation behind these processes.

It is clear that UK supermarkets have not adopted the use of new technologies at the same pace or in the same way as their French counterparts. One explanation for this difference might be that the relative cost of labour in the UK can be lower than in France. Trade Unions in Scotland have been faced with employers pursuing cheaper labour costs through more insecure working practices, rather than automating their workplace to the maximum degree that is available. Despite this, forms of automation have been adopted. For example, the Union of Shop, Distribution and Allied Workers ( USDAW) reports a high degree of automation behind the scheduling of shifts which allows employers to fit workers' hours around peaks and troughs in customer demand. This can often have negative consequences on shop workers and result in their hours changing from week to week. It can also result in workers being scheduled for very short shifts to fill gaps in the schedules, sometimes meaning that they spend almost as much time travelling to and from work as they do completing their shift.

There is some evidence, however, that these practices are beginning to change. We note that a number of employers are now moving away from these extreme forms of electronic scheduling, instead putting it back into the hands of managers at store level. Equally the introduction of automated tills within supermarket stores in Scotland is becoming more prevalent. These tills allow stock levels to be automatically monitored and communicate directly with the warehouse, providing details of when stock requires topping up, reducing the need for workers to manually perform stock checks.

This example both illustrates how the decision to pursue technological change is shaped by external factors, and how technological change can be approached to differing degrees in different places. In this way a transition to a more automated workplace is likely to be incremental and it may not be linear. While a greater degree of automation might creep into workplaces over time, it might also mean that some workplaces begin to automate and then stop due to other factors affecting the cost or the development of the change. It also suggests that different companies can and will make different decisions around the degree of automation within their business and the level of technological change. Like with the off-shoring of call centres, trends can also be reversed depending on the preferences of consumers and the effect that it has on the wider business model.

As USDAW highlight in their submission:

“We believe that, human contact in retail transactions is so important that simply because a task can be replaced by a machine, does not mean that it will.”

The cost of developing and deploying the technology

In addition to the costs associated with labour, a clear driver of technological change is the cost of developing and deploying the technology. It is clear from previous waves of automation and from the wide scale digitisation that has already taken place, that technology can create job losses but it can also create new jobs in a different part of the business or across the economy as a whole. In this respect the net loss of jobs from the economy can be difficult to identify, and net gains are equally possible. At the level of the individual worker, however, there is likely to be change, with jobs altered or being lost. Much of the academic literature anticipates a loss of low and medium skilled jobs and suggests that many of the jobs that will be left in the economy after automation will be high skilled, focusing on research skills, analytical skills, IT skills and engineering [28] .

Evidence from trade unions suggests that automation and digitisation can cause job losses but findings from the survey were relatively mixed in relation to the scale of the loss at this point. There are, however, some workplaces that are reporting job losses in the 1000s or the 100s through automation, notably in the finance sector and parts of local government. Often these workplaces have already seen a large roll out of new ways of working, which are now fairly well embedded.

More regularly, union branches responding to the survey reported that job losses were in the 10s (even when reporting from large workplaces) and many respondents struggled to be certain what overall effect automation and digitisation was having on the number of jobs in their workplace to this point. Often this was because the change was still underway and therefore ways of working had not been firmly enough established to create job losses. Equally these changes are coinciding with, and perhaps being driven by, a wider cost cutting agenda due to austerity and the difficult economic climate, therefore at times the falling headcount was discernible but not necessarily solely attributable to automation. In the civil service, and some other public sector workplaces, workers have been covered by ‘no compulsory redundancy’ agreements and therefore changes due to automation had been dealt with through attrition or redeployment.

There was a sense, however, from across many of the unions surveyed in both the public and private sectors that it was only the beginning of this issue, with many branches highlighting an expectation that job losses would be greater in the future, and highlighting a general anxiety around the issue of automation amongst their members.

“At present this technology is just being introduced so job losses not evidenced as yet but in longer term automation poses a very real danger to our members’ jobs”

“8 senior posts have gone in the last 18 months. Sustainability of admin support services to be reviewed early 2018”

“Potentially, the Council has an objective to lose 2500 staff in five years. Unison is actively working to protect staff”

“Inevitably workloads have been lightened by the railway finally catching up but ultimately jobs will be lost as positions are found to be surplus to requirements. Drivers are also fearful of what technological breakthroughs and advancement will bring with regards to their own positions.”

“We are actively encouraging our customers to contact us through digital channels. If enough people do this it will lessen the need for staff to answer calls from customers. So we will likely need less staff”

It is clear that a driver of automation is the reduction of costs through the loss of staff. It is also clear, however, that significant investment is required to make a transition to a more digitised or automated workplace and that the reduction in costs are not necessarily immediate. How much investment is made, the degree to which it is well managed and the account that is taken of wider systems in the organisation, along with the timing of the change all play a role in how successful this process of automation will be.

There were a variety of issues raised on this topic by unions, with many examples of automation being pursued primarily as a cost cutting measure. This driver of automation created a variety of issues at a workplace level, as it often led to technology which was underinvested in, systems which were not fit for purpose, increased workplace stress and services which were lower quality as a result.

Across the public sector many examples were raised which suggested that workloads had risen as a result of automation with background support around HR or finance cut back and individual workers now responsible for updating systems and inputting data in addition to their normal workloads. In these workplaces, views around automation tended to be negative and the quality of work had been reduced as a result of higher workloads and systems that were not fit for purpose.

There were, however, also examples highlighted where automation and digitisation had been pursued for cost cutting reasons and where these savings had not been realised. UNISON highlighted an example of the digitisation of hospital records, which was significantly more expensive than expected, due to the complexity of the systems that needed to be integrated and the need for robust systems that allowed a universal service to be maintained. Despite this the union recognised that the new automated system offers improvements to efficiency, health and safety and the quality of care for patients. The driver therefore may have been at least partly around cost but the benefits were much wider than this and it was the wider benefits around efficiency and safety that were easier to realise.

These examples highlight that while automation and digitisation can offer savings in the long term, a purely cost cutting motive for pursuing the change is unlikely to offer the best results. It is also clear that when automation and digitisation are pursued in a workplace that must offer a universal service, challenges are different than in the private sector where services can simply be withdrawn and not replaced. For example, a local council, the DWP or other parts of the public sector might encourage people to use online services to access benefits but frontline staff must also be available to offer support, which can cause stress and workload problems if inappropriately managed. In the finance sector, however, bank branches could simply be shut and replaced with online banking services. While this disenfranchises many users, particularly older people, and can cause significant problems for rural communities and small businesses, the change can simply be delivered as envisaged by the company regardless of the consequences for service users.

The capacity of the workforce

A clear finding from the survey was that workers were often required to change their working practices as a result of new technologies or new ways of working. It was also clear that training needs existed as a result as shown in the figure below.

Q12 Are there currently training needs as a result of automation or digitisation in your workplace?

Despite this, only 23% of survey responders felt that training needs were being met in full, while 48% felt that they were only partially met, and 29% of responders felt that training needs were simply not met by the employer. Union members in the retail and distribution sectors have also repeatedly raised concerns that new technology is simply delivered to their site with little more than an instruction manual and members often receive no support from the company with its use.

The evidence from the development and deployment of new technologies in the past also suggests that employers are lax about properly training their workforce to use new technologies. Scottish Union Learning ( SUL), the STUC’s learning project funded by the Scottish Government, regularly responds to training requests on digital skills and the use of new technology. It is interesting to note that SUL has provided training for more than 100 teachers in 2013-2017 on the use of smartboard technology. It is illustrative of the issues around the deployment of technology and training that the union must still support this type of training despite smartboards being a feature of Scottish schools for over a decade.

Given that one of the features identified in the academic literature around the current wave of automation is the speed of the change, failure to provide training and support for workers who are expected to use new technologies is likely to increase the problems of deploying new technologies at a workplace level. Particular concerns were also raised by trade unions around older workers in this respect. Without a focus on training and support for workers, there is a danger that the productivity gains expected from the use of new technologies will not be realised.

Efficiency, Safety, Health and Wellbeing

The Scottish and UK labour markets have been increasingly affected by the rise of insecure work, with a marked growth in zero hours contracts, umbrella contracts and self-employment over the last ten years. Automation and digitisation are therefore being pursued at a time when the cost of labour is low, real wages are falling and insecurity is high. Between 2014/5 and 2016/17, 100,000 people in Scotland reported an illness caused or made worse by work, an increase on the previous reporting period. [29] In workplaces across the private and public sectors unions are reporting that workloads are increasing and stress, burnout and mental ill-health are becoming more prevalent.

In this context, while automation may be a tool to enhance wellbeing and job quality, there is also a risk that it will further pressurise those already under-pressure in the workforce. Findings from unions suggest that strain in the workplace could be increased as a result of automation in a number of ways.

The first issue is the extent to which automation allows a higher level of performance management or a greater ability for the employer to track the whereabouts of staff and their work rate. This can create a sense of powerlessness or a loss of control for workers and can drive an unhelpful and inappropriate targets culture.

“staff are being micro-managed and monitored in real time. Targets are artificially inflated and staff pressurised to meet them with vastly reduced resource.”

“Management can check everything you do on a daily basis, from the moment you log onto your computer each day. This is used as part of the performance management system.”

“Big Brother Approach. It was supposed to help us improve health and safety however just spy in cab”

“In the distribution sector, close monitoring of productivity through electronic picking systems puts some workers under pressure to reach unrealistic targets. Those who do not achieve their targets can face the loss of their bonus or even disciplinary action. In these cases it is not the technology itself that is the cause for concern, but the way in which it is being used to support unfair management practices.”

Secondly, there are impacts around the quality of work. In some instances improvements in the quality of work were identifiable:

“Information is easier to share and find. Home working is more viable. Communication is faster and easier.”

“It has removed some of the more routine queries and has automatic responses freeing staff to deal with more urgent or pressing needs”

“Less errors from double keying as the machine makes no mistakes”

Much of the research that has been carried out into automation expects it to be job enhancing in the ways highlighted above. For call centre workers for example, chat bots and other automating tools are expected to reduce the number of simple or routine enquiries coming to call handlers, providing more scope for interesting or varied work [30] . The specific evidence from the CWU seems to suggest that this is not the reality experienced by many workers on the ground:

“Manual handling is reduced with automation, restricting specialised skills and input. Automated scripts reduce any personal input or decision making. Lack of flexibility and personal judgement reducing variety of roles.”

It seems that this kind of diminution of job quality is often the experience with a large number of branches citing issues around the deskilling and a loss of variety and flexibility:

“Less time to do core functions, elimination of parts of jobs leading to more generic jobs, less time to deal with customers, increased use of statistics to measure performance, less motivation or feeling of recognition of skills, less support from HR/admin/etc”

“Job roles have become repetitive and singular task based rather than working a whole case on an end to end basis”

“Job roles are more generalised and deskilled”

A further problem of staff morale throughout the automation process is also identifiable. Workers often felt that their jobs had changed in a way that simply lessened the rewarding elements of it. Equally workers struggled to accept and enjoy new roles when they could clearly identify that if they were successful in their work, their own job would no longer be necessary.

“It can make it easier and quicker to serve customers but the personal touch and ‘making a difference’ are lost”

“Customer facing staff become demoralised having to encourage customers not to speak to them but to go online instead”

At times, unions at a national level also identified that restructuring due to automation and digitisation also meant that teams were now centralised or that data was now handled in such a way as to make parts of the business easier to off-shore. This added to a general sense of the increasing precariousness of roles and concern that unions held for the future of their members jobs. It should be noted however, that reducing costs in manufacturing, encouraging use of new technologies and 3-D printing were also identified as potential contributions to the re-shoring of industry, and manufacturing in particular, which could be pursued as part of a wider industrial strategy.

One of the more positive features of automation and digitisation is routinely identified in the academic literature, but which was also highlighted by unions, is the support that it gives to flexible working, working from home and working in a range of locations. On the whole these were highlighted as positive changes with workers appreciating the added flexibility it provided and the greater ability to balance home and work commitments. Elements of these changes, however, are also having a negative effect on the wellbeing of workers. An issue that is of growing significance across the labour market is how technology increases working hours and blurs the lines between work and home life. One union identified this as a particular issue for younger workers who often feel a greater pressure to be available to their employer at all times.

It was also identified that automation and digitisation could enhance feelings of isolation in the workplace, as workers were less required to report in person, could receive instruction remotely and had less of a fixed work location. The impact of this on working cultures was already being felt in a number of workplaces and could grow as automation develops. This issue of isolation often went hand in hand with benefits in efficiency or remote working and was a feature of new automated processes. For example the ability to receive jobs on handheld units allows workers in the social care sector to go straight to their first appointment benefiting the worker by reducing time spent going to and from a central location to receive appointments or pick-up notes. Often workers appreciate this change as it allows them to manage their workload more effectively but it also reduces their contact with co-workers and their feeling of being part of a workplace. There were many examples raised of how automation and digitisation change the nature of work, and there are both positive and negative elements to this change.

Interestingly the issues around health and safety more generally provoked a varied response. Union officers at a national level often cited benefits in health and safety or a desire to improve health and safety as one of the drivers behind the automation process, and certainly one of the elements that the union sought to enhance. On a branch level, however, benefits to health and safety were not widely recognised or highlighted with the majority of responders citing that health and safety had not been impacted (35.96%) or that they were unsure of the impact of automation and digitisation on health and safety (40.22%). Only slightly over a fifth of respondents could identify a health and safety impact and of those 19% felt that health and safety had been negatively affected and only 3% felt that there had been an improvement in health and safety as a result of automation and digitisation. The difference between the drivers behind automation and its contribution to health and safety and the impacts at a workplace level were not well explored within this survey, however, and therefore could benefit from greater focus in future studies.

Ultimately there was a sense that automation and digitisation is best pursued with effective consultation and collaboration with unions and the workforce. A well designed automation and digitisation process could create better ways of working and better quality jobs, along with more efficient practices but the workforce would need to be supported, engaged and empowered in line with fair work practices for this to be achieved. It was also noted that this is seldom the way change is approached by employers, often leading to poor outcomes for workers and for the employer.

The regulatory framework and legal questions around deploying new technologies and ways of working

Much of the debate around digitisation and automation in the media has focused on the use of new technologies like driverless vehicles and drones. While some anxiety around these issues certainly exists in workplaces and while there were examples of automated vehicles and highly automated processes being used in warehouse settings [31] , it is clear that these technologies are not yet routinely in place across the economy on the scale that some of the literature suggests they will be in the near future.

It should be noted that wide scale deployment of these technologies could be limited by legislative constraints with analysis from DPD, an international parcel delivery company, noting that even a limited automation of delivery driver jobs, would need some change in regulation [32] . These constraints therefore might slow the deployment of these technologies and ways of working, and it may also slow the level of investment that companies are prepared to put into them. It is clear, however, that drivers are often already subject to higher levels of scrutiny from their employer as a result of automation, with routesmart technology, monitoring of locations, monitoring of braking patterns, digital tachographs and in-cab surveillance now routinely present in a variety of driving jobs across the public and private sectors.

The rise of the often ill-defined ‘gig economy’ is also having an impact on ways of working. Here apps and new technologies are in theory facilitating a new way of working that has been championed for its flexibility due primarily to the perceived benefits for employers and consumers. From a worker’s rights perspective, however, many of the features of the gig economy and the questionable employment practices used are not new and have been the subject of trade union campaigns and legal challenges for a number of years.

The issue here is not around the use of new technologies per se, but rather how exploitation is masked by innovation, through the framing of ‘collaborative economy’ services. As noted by the Employment Tribunal Judgement against the taxi hire firm Uber, the company had resorted to 'fictions, twisted language and brand new terminology [33] ' in order to justify a situation of self-employment for Uber drivers. The employment tribunal found that Uber drivers were workers and therefore were covered by a range of employment protections that had previously not been available to them, including:

  • Information about pay, notice and holiday entitlement
  • National Minimum Wage (except statutory exceptions)
  • Protection against unlawful pay deductions
  • Equal Pay
  • Working hours and breaks
  • Holidays
  • Rights not to be refused work because of union membership
  • Rights to be accompanied to a disciplinary or grievance hearing
  • Protection against discrimination on all unlawful grounds
  • Protection against detriment for whistleblowing
  • Protection against detriment due to a blacklist
  • Pension auto-enrolment

This case has now been upheld by the Employment Appeals Tribunal and is a landmark ruling for the gig economy.

The STUC remains concerned that some companies in the ‘gig economy’ are seeking a trading advantage by ignoring employment regulations and their responsibilities as employers by framing their business in terms of ‘sharing labour’ or ‘facilitating trade’ rather than offering goods and services in the traditional manner. Flexibility can be a useful feature of the labour market for both employers and workers and when used properly can support a greater degree of work-life balance but exploitation disguised as flexibility is incompatible with fair work principles and should be addressed.

As the Expert Panel on the Collaborative economy noted in their report ‘fundamentally, if a business model by necessity must not offer basic rights in order to be commercially viable, then this does not constitute access to good or fair work.’ [34]

Contact

Back to top