Impact of algorithmic management on workers

In an era defined by digital transformation, the use of algorithmic management in the workplace has ushered in a new set of challenges for workers and labour unions. Demos Helsinki, collaborating with the Foundation for European Progressive Studies, Oslo Metropolitan University, and Halmstad University, have kicked off an international project spanning Finland, Sweden, and Norway to investigate the profound effects of algorithmic management on the nature of work across the labour market.

Update: September 2024

A Finnish case study (currently only available in Finnish) is available here.

Some key findings:

• Employee participation is crucial: To increase work well-being and efficiency, employees should be involved in planning the use of artificial intelligence (AI) in their workplaces.
• Algorithmic management can backfire: AI-driven efficiency measures, such as scheduling based on cash register data, may overlook key aspects of work (e.g., restocking shelves) and lead to operational issues, customer dissatisfaction, and workplace chaos.
• AI cannot fully replace traditional management: AI lacks the ability to account for individual employee strengths or handle situations where data is insufficient. Human management is still essential for effective decision-making.
• AI can be useful when implemented properly: Involving employees in the design and planning stages of AI systems can make algorithmic management more meaningful and productive.

Some recommendations:

• Digital labor protection is needed: The report suggests the creation of digital labor inspections, where authorities would audit AI systems in workplaces to ensure they do not negatively impact employees.
• AI use in sensitive areas should be limited: The report warns that using AI for sensitive decisions, such as hiring, pay, or employment continuation, can lead to illegal discrimination, as algorithms may inadvertently emphasize biased factors like gender or age.
• Strengthening worker protections: The right for trade unions to file complaints on behalf of employees could prevent discrimination and address imbalances in power, as individuals often lack the ability to defend themselves against AI-driven decisions.

 

 

Why care about this?

One notable consequence of the digital transition is the division of the labour market into ‘lousy or lovely’ jobs, where digital technology has allowed firms to rely on a flexible labour pool, often at the expense of existing labour and social protections. The gig or platform economy, in particular, has witnessed the reclassification of workers as ‘entrepreneurs’, resulting in the evasion of essential safeguards.

 

However, digital technology’s more nuanced and less obvious effects on the nature of work have largely remained uncharted territory. Widespread surveillance has been linked to increased worker stress and decreased trust in the workplace. At the same time, algorithmic decision-making systems have sparked profound shifts in workplace management, power dynamics, and workers’ rights. These transformations are not limited to the platform economy but extend across traditional sectors as well.

 

The onset of the Covid-19 pandemic further accelerated the adoption of such systems, making it imperative to understand their true impacts on work, which is not only a source of livelihood but also a cornerstone of the Nordic Model.

 

Expected outcomes

This project, scheduled to conclude in June 2024, will deliver the following outcomes:

– In-depth case studies: Two comprehensive case studies from Finland will provide valuable insights into the effects of algorithmic management on workers and labour organising.

– Policy recommendations: A final report will integrate findings from Finnish, Swedish, and Norwegian case studies, offering actionable policy recommendations to address the challenges posed by digital technology in the workplace.

 

Developing insights for workers and advocates

Our hypothesis is that workers, unions, and policy advocates cannot have a sufficient understanding of the profound impacts of new technologies as these often become evident in retrospect. To protect the rights and wellbeing of workers, it is imperative to arm them with knowledge about the potential consequences of these technologies and provide recommendations for effectively addressing these challenges.

 

The research methodologies employed in this project encompass case study analysis, semi-structured interviews, and document analysis, where appropriate.

 

This project will shed light on the intricate relationship between digital technology and the evolving nature of work. This initiative contributes to a larger conversation about safeguarding workers’ rights and wellbeing in an ever-changing digital landscape by uncovering the true impacts of algorithmic management and offering actionable recommendations. Ultimately, it strives to ensure that the benefits of digital technology are harnessed without compromising the dignity and security of workers across Europe.

 

For more information, or if you want to discuss this topic, please contact:

Theo Cox
Senior Expert, Demos Helsinki
theo.cox@demoshelsinki.fi

 

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Feature Image: Benjavisa / iStock.