Digitalisation: the recipe for success
G7 Summit

Digitalisation: the recipe for success

The COVID-19 pandemic profoundly changed how we relate to work, but digitalisation of the workplace can only succeed if the work opportunities it provides are decent – benefitting both workers and employers 

When the incoming German G7 presidency announced its priorities in the area of employment policy late in 2021, one priority was the impact of digitalisation on the structural changes underway in the labour market.

Rapid digitalisation, reinforced by the COVID-19 pandemic, is deeply transforming the nature of work. The emergence of the gig economy is one of the most important new transformations. Digital labour platforms, which include web-based platforms, where work is outsourced through an open call to a geographically dispersed crowd, and location-based applications, which allocate work to individuals in a specific geographical area, typically to perform local, service-oriented tasks, are important components of this transformation.

The COVID-19 pandemic has accelerated the digital transformations already underway and profoundly changed how we relate to work. The share of the employed population working from home increased exponentially and, in the future, rates of telework will remain significantly higher than they were before the onset of the pandemic. Post-pandemic teleworking will likely involve a hybrid or blended form of teleworking – working part of the time in the office and part of the time remotely. These new hybrid and work-from-home arrangements look to be permanent.

These transformations bring many opportunities.

The rise of digital labour platforms has the potential to provide work to many people and offers increased flexibility for those who need it. Businesses are also benefiting, as they can use these platforms to access a workforce, improve efficiency, enhance productivity and enjoy wider market reach.

Pros and cons

Telework too brings some important advantages for workers. Teleworking can help workers avoid the daily commute and gives them the flexibility to work at the times and places that are most convenient for them, affording them ‘time sovereignty’. It typically also has positive overall effects on work-life balance and can be beneficial to society by reducing carbon emissions.

But these opportunities are accompanied by some challenges related to the regularity of work and income, working conditions, social protection, skills utilisation, the right to freedom of association and the right to collective bargaining.

As the working conditions on digital labour platforms are regulated largely by terms of service agreements, platform workers cannot access many of the workplace protections and entitlements that apply to employees, and fundamental rights of freedom of association and collective bargaining are extensively denied. Particularly for workers engaged on location-based platforms, there are especially large gaps regarding health insurance and work-related injury provision, unemployment and disability insurance, and old-age pension or retirement benefits.

Telework also carries important disadvantages. Evidence from the pandemic teleworking experience confirms that the mandatory, full-time nature of teleworking exacerbates the risk of social isolation and detachment from colleagues and the organisation itself, as well as ergonomic issues. Existing gender inequalities and challenges for women also appear to be aggravated by mandatory, full-time teleworking.

The International Labour Organization has been working closely with governments that have taken regulatory steps to address these challenges, providing technical and legal assistance, as well as with employers’ and workers’ organisations that have also taken initiatives.

On digital labour platforms, however, variations in the national regulatory responses have created further challenges. The matter is made more complex because many digital labour platforms operate across multiple borders and jurisdictions. The result is regulatory uncertainty for workers, businesses and governments.

Seeking regulatory certainty

International policy dialogue and coordination could help ensure regulatory certainty and the universal applicability of international labour standards. It is important that the ILO fundamental principles and rights at work are implemented for all platform workers, irrespective of their status. In addition, principles rooted in other ILO conventions, such as those related to fair payment systems, fair termination and access to dispute resolution, should also be extended to platform workers.

In addition, privacy protection should rise to the top of the policy agenda to strike the right regulatory balance between employer monitoring and worker privacy needs.

Digitalisation will only fulfil its positive potential if the work opportunities it provides are decent. G7 leaders therefore need to act to create the conditions to adapt to new ways of working requiring new behaviours and new norms. The social partners must be given a central role when revising existing laws, regulations and policies or developing new ones. This will ensure that digitalisation benefits both workers and employers. A strong political call to invest in digital infrastructure and skills would be an important lever to ensure no one is left behind in the digital transition.

All of these would help to deliver on the G7 leaders’ commitment for an inclusive and human-centred future of work.