What is the impact of new workplace technologies on job quality?

Blog posts

5 Dec 2024

Nick Litsardopoulos, Research Economist (Fellow)

This blog was originally published in November 2024 on the website of Adzuna, one of the largest online job search engines in the UK. 

The integration of digital technologies in the workplace has significantly transformed the nature of work across various industries. The impact of workplace technologies is multifaceted, with studies identifying both positive and negative effects. The introduction of new workplace technologies can, for example, improve job quality through enhanced productivity, skill development, and work-life balance, but can also lead to increased work intensity, physical constraints, and job displacement. New workplace technologies have been shown to improve job quality of routine jobs with a substantial element of repetitive tasks. Yet, it is often the case that the outcome depends not only on the new technology itself, but also on how the new technology is integrated and used in the workplace. It is likely that different industrial sectors will be affected by new technologies differently, with some fairing better than others depending on how well the new technologies are integrated and used in the workplace.

The adoption of new technologies, such as Artificial Intelligence (Ai) and smart systems, has been associated with a decrease in the employment in developing countries, except for the Information & Technology (IT) sector. In the IT sector was found to be the only sector in which the adoption of new technology was associated with an increase in employment. It has been previously shown that the UK jobs market is experiencing a volatility that seems to be associated with new technologies (see chart below). The introduction of new technologies in the workplace do not only upset people and skills, but they also shake-up markets and industries altogether, with some industries, like the IT sector, more jobs are created while in other sectors jobs are destroy. The data coming from the UK jobs market suggest that in some respect the 2013 analysis of Frey & Osborn about which jobs are susceptible to computerisation was not far from the current shifts in the UK jobs market.

While the internet’s impact on job searching is significant, the sources reveal its influence extends to other facets of the labour market, prompting changes in employment types, potentially reshaping unemployment trends, and raising new questions about job security and the quality of work. Contemporary employment trends have notably given rise to a new kind of employee who increasingly more works from home using new technologies to collaborate with colleagues while away from the office. New technologies offer more flexible working hours across different time zones, with project development becoming more focused on output rather than working hours volume oriented. Nevertheless, such jobs become subject to uncertainty and insecurity, since the same technologies that afford these benefits also allow employers to expand their pool of talent across several time zones.

The internet expansion has led to shorter vacancy durations and a decrease in unsuccessful hiring attempts, suggesting an improvement in the efficiency of matching job seekers with vacancies. Findings from a study across a panel of OECD countries suggest that the widespread internet adoption allows for a better allocation of labour resources. There is strong empirical evidence that internet job search is effective in helping unemployed individuals find jobs. This effectiveness is attributed to reduced search costs, increased efficiency in connecting job seekers and employers, and the potential for improved match quality leading to longer overall job tenure. However, the ease of applying for jobs online may also lead to negative selection bias, where a greater number of less-qualified candidates are more likely to apply. Human Resources departments use increasingly more sophisticated technologies to automate the sorting of the best candidates, even while candidates use increasingly more sophisticated tools to write a better job application. For better or worse, these contemporary systems lead to the employee-jobs matching gradually turning into a human-free system that is increasingly more managed by algorithms (i.e., job description optimization, diverse candidate pool simulation, resume parsing and skill extraction, skill gap analysis, etc).  

Furthermore, the increased use of technology in the workplace raises questions about control over work and the importance of worker voice. As algorithms and automated systems play a larger role in shaping tasks and work schedules, it’s crucial to ensure that workers have a say in how these technologies are implemented and that they don’t lead to exploitation or a degradation of working conditions.  While the internet might be contributing to a more efficient labour market, certain technologies, particularly those related to automation and AI, could increase job insecurity. If technological advancements lead to job displacement, it could offset the positive impacts of internet expansion on unemployment. 

Job reorganisation driven by technology isn’t a neutral phenomenon. It can exacerbate existing inequalities by creating a divide between high-skilled, high-paying jobs that require creativity and problem-solving and low-skilled, low-paying jobs characterized by routine tasks and limited autonomy. As workplaces continue to evolve, it is crucial for both employers and employees to adapt and develop strategies to harness the positive aspects of technological advancements while mitigating potential negative impacts.

Job reorganisation driven by technology presents both opportunities and challenges. While new technological tools can enhance productivity, create new roles, and offer greater flexibility, it’s crucial to manage its potential downsides, such as work intensification, job displacement, and the exacerbation of inequality. Addressing these challenges requires a multifaceted approach involving upskilling and reskilling programs, worker-centric technology design, and policy interventions that promote good work for all. This highlights the need for policies and initiatives that address potential job displacement and provide support for workers in transitioning to new roles or industries.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.