The results are clear, the figures are striking. They make one thing clear: It is time to act; it is imperative to take action now—because one thing is certain: The transformation will fundamentally change the world of work, and this will have far-reaching consequences for workers: IG Metall sought to highlight exactly what these impacts will be and what upheavals companies can expect through company-specific transformation atlases, which were compiled this spring at companies throughout Germany. At the same time, the goal was to obtain a detailed, general overview of the scope and effects of the digital transformation. This effort was successful.
Many Companies Are Unprepared for Transformation
The results show that many companies within IG Metall’s organizational scope are not prepared for digital and ecological transformation. “Just under half of the companies have no strategy—or an insufficient one—for managing the transformation. Companies and employees must adapt to new skills and, in some cases, new business models. However, the ability to change required for this is only just beginning to emerge. If companies continue to act so defensively, they are gambling with the future of their employees,” said Jörg Hofmann, President of IG Metall, during the presentation of the union’s Transformation Atlas.
The Transformation Atlas was compiled based on data from nearly 2,000 companies employing more than 1.7 million people. Using a questionnaire—which was mostly discussed and completed within a company working group by the works council and employee representatives together with the company liaison—a detailed assessment could be conducted at each company, specific opportunities and risks related to the transformation process could be determined, and concrete operational challenges and areas for action could thus be identified.
The results clearly show that digitalization is making its way into all parts of the companies—though it is progressing unevenly and at varying speeds. Digitalization will have a massive impact, above all, on work in manufacturing and assembly, in administration and logistics, and in technical customer support. Jobs in these areas involve a large proportion of tasks whose nature will change or which may be eliminated entirely. Fifty-seven percent of employees at the participating companies perform tasks with a high potential for automation.
The automotive industry will undergo the most significant transformation
“The companies are only at the beginning of this transformation, but it is already clear that there will be job cuts in the medium term, varying by region and industry. We expect the sharpest declines in companies with more than 1,000 employees,” said Rudolf Luz, Head of Labor Policy on the Executive Board of IG Metall in Frankfurt.
The automotive and supplier industries, in particular, will be profoundly transformed by technological change: 54 percent of companies in this sector expect the number of jobs to decline. “For suppliers in particular, the transformation could threaten their very existence if they have limited capital and no viable new business models,” said Hofmann.
However, most companies are not well prepared for the digital transformation: Half of the companies surveyed have no systematic approach to workforce planning and determining staffing needs. The same applies to assessing training needs, which is done systematically in only 45 percent of companies.
Employers Must Take Precautions
In light of these findings, the union representative is calling on employers to take precautions and prepare their companies for the transformation. “Companies must proactively address the upcoming changes. This includes investing in new products, processes, and business models. Forward-looking workforce planning and on-the-job training are also necessary to ensure that companies can navigate the transformation,” said Hofmann. Continuing vocational training must no longer be limited to specialists and managers; all employee groups must be given the opportunity to gain new qualifications. Hofmann: “This transformation can only succeed in collaboration with the employees. The works council therefore needs more co-determination rights regarding continuing vocational training, workforce planning, and strategic issues.”
Politicians also bear responsibility for the digital and ecological transformation. Many companies are operating on a day-to-day basis partly because there is still uncertainty regarding the framework conditions for the energy and mobility transitions. This also includes necessary investments in infrastructure amounting to billions.
For regions particularly affected by structural change—such as those heavily dependent on the automotive industry—structural funds must be established to cushion the impact of these changes.
Transition Short-Time Work Benefits Are Urgently Needed
A transformation short-time work allowance is also urgently needed. When structural change leads to a decline in the volume of work, this new labor market policy tool can help retain employees at a company while also training them to work on new products. Hofmann: “We need the transformation short-time work allowance as a bridge to continued employment if layoffs are to be avoided.”
To underscore these demands, IG Metall is calling for a rally under the slogan #FairWandel on Saturday, June 29, 2019, at the Brandenburg Gate in Berlin.
