Discover all the data from the survey
As the digital revolution accelerates, employers are eagerly adopting new technologies with significant impacts on the workforce. When we presented employers with a list of nine new technology solutions with workforce implications – ranging from electronically monitoring employees to using AI for recruitment – no less than 88% of respondents have already implemented or said they are planning to implement each of the nine named solutions (see figure 5 below).
Employers know this will shake up the office: 69% say workforce trends including digitisation will be a major driver of changing workforce policies in the next three years, and nearly half (44%) say it will be the biggest driver. Yet a surprising number of employers are rushing ahead without considering the risks. Twenty percent of employers never consult employee representatives before introducing a new technology that will affect staff and nearly a third (30%) never consult external counsel (see figure 6 below).
Employers may be unconcerned because they have implemented new technologies in the past without issue; maybe they see their competitors doing the same and assume they are in the clear. Others simply do not know where to start: “Part of the rationale for not seeking advice is that these technologies are so new that people are getting their heads around it and are unsure what questions to ask,” says Gaspar. “This will change as companies grapple with what it means for their organisation and want to know what their peers are doing in the market.”
But automation and AI are areas of rapid regulatory change, and employers who wait until they are comfortable discussing these topics before seeking advice are exposing themselves to risk, including the possibility these technologies perpetuate bias or inaccuracies in the underlying data. “A lot of times when companies get excited about a new technology, they implement it, and the legal issues can be an afterthought,” notes Hendry. “It doesn’t become an issue, unfortunately, until there’s a legal claim related to it.”
Senior Associate, London
Most respondents are already using automated tools to assess employee performance (64%) and to monitor staff both in the office (58%) and working remotely (52%). These numbers will only rise. A recent study by Gartner estimates that 70% of large employers will be using employee monitoring technology by 2025. While productivity trackers have long measured the efficiency of manufacturing and logistics workers, the rise of so-called ‘bossware’ means office workers may now face having their keystrokes, clicks and idle time recorded, with the most invasive technologies accessing microphones and webcams to ensure workers are on task.
Employers are also using technology to enforce return-to-office mandates: “We’ve advised many companies across the region on whether they can access entry records and track when people are in and out, and how long they’re in the office for, to make sure they’re not just tapping in and out,” reports Jumabhoy.
Employers know monitoring and surveillance can be unpopular and more than a third (38%) expect it to be a key trigger of activism in the next five years. Already, employers face challenges from workers who complain that performance trackers are not only invasive but unreliable and often punish them for essential tasks performed away from the keyboard, such as conferring with colleagues or clients.
“We don’t yet have a technology that can accurately track productivity, because you can’t just measure work by the length of a document or the time spent on calls – it’s also the in-between work, which is difficult to capture,” Röhsler comments. “That’s important in litigation, because in France overtime claims can be financially very significant.” Workers terminated or denied pay due to tracking data are attempting to enforce their rights before courts or employment tribunals. Further challenges are inevitable.
The legal obligations of employers using technology to track performance or engage in other surveillance are not always clear. The EU General Data Protection Regulation and a tangle of national privacy laws often leave employers and employees uncertain of their rights. In many jurisdictions, employers face few apparent restrictions on monitoring, though they may be required to tell employees how and why they are doing it. "Complaints about monitoring technologies often arise when monitoring is used for evidence gathering, particularly if the evidence is used to take disciplinary decisions," says HSF Senior Associate Siân McKinley. "It raises some interesting questions – how far should an employee be entitled to hide behind their right to privacy to prevent being called out on their bad behaviour? Both employers and employees need clarity, both about the uses of technology and about the level of transparency required."
As a first rule, employers should be transparent about the data they’re collecting and how it will be used, even where not legally obligated to do so, as this will go a long way towards allaying fears and building trust. “When we introduced [Microsoft solution] Workplace Analytics, we did extensive comms to employees explaining why we were doing it and what it meant,” comments Doran. “That’s important because these tools can be misunderstood. So thanks to those communications, things have gone smoothly, and we've been able to take positive actions to improve the employee experience.”
Employers who fail to be as forthcoming risk creating an anxious environment. "Employee monitoring seems likely to be a real flashpoint in the future," notes HSF Partner Christine Young. "Research commissioned by the UK's Information Commissioner's Office found 70% of the public would find it intrusive to be monitored by an employer in any way and 57% would feel uncomfortable taking a new job if they knew their employer would be monitoring them."
More than 95% of respondents are using or plan to use AI to perform tasks previously done by workers, including customer service, clerical tasks, research and even creative work. Indeed, 60% of respondents say AI adoption will significantly change the size or composition of their workforce in the next three-to-five years and 61% will substantially change their workforce policies to address the challenges of automation in the next three years. “You just have to see ChatGPT in action – it’s staggering to see its capabilities,” says Evans. “That may well be something that changes our way of working in the not-too-distant future.”
Despite the anticipated disruption, relatively few (34%) expect job losses due to AI and automation will be a significant activism trigger in the next five years. This may be partly because many employers expect to redeploy or retrain workers displaced by technology rather than dismiss them. “In most European countries, when someone’s job is terminated for reasons unrelated to their personal conduct or performance, there’s an obligation to try to redeploy them within the company,” says Röhsler. “If you can’t do that, you need to retrain them and help them find something else.”
General Counsel and Company Secretary, Hays
Employers may be underestimating this risk of activism, however, assuming the white-collar and creative professionals affected are less prone to collective action than the industrial workers who have faced technological displacement in the past. Hollywood executives would likely disagree, as striking actors and screenwriters – creative professionals protesting, among other things, the intrusion of AI on their jobs – brought the $134 billion US film and television industry to a halt in the summer of 2023. Such events likely herald things to come – activism around AI-related job loss, as well as increased collective action among white-collar professionals.
Implementing AI solutions without consulting workforce representatives may also expose employers to legal and financial risks. In the UK, Australia and parts of Asia, for example, employers may be required to engage with workers before adopting technologies that could result in job losses or significantly change how jobs are performed. As Jhinku observes, failing to do so risks court intervention in some jurisdictions: “The courts can step in and say you need to stop the project, go back and start again after performing the required consultation. That can be very costly in a competitive environment.”
Senior Associate, New York
Managing Partner, Singapore, Singapore
Senior Associate (Employed Barrister), London
Regional Head of Practice (EMEA) - Employment Pensions and Incentives, Paris
Partner, New York
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© Herbert Smith Freehills 2023