Technological disruption: let’s not forget empathy

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(Image credit: Shutterstock)

Driven by unprecedented changes in technology, digitisation is pushing industries of all kinds to a tipping point. Automation and AI is a huge part of this change, and is the part of modern-day technological development that some fear.

According to a recent Brooking’s institute study, 25 percent of jobs in the US, particularly the ‘repetitive ones’, are under threat from automation. 

The jobs considered of highest risk are performed by low-skilled workers in the food service industry, and in this context the threat appears real: there are already robotic waiters in Japan for example. 

Yet the Washington think-tank’s study found the professions of least risk from automation are business occupations, ranked below arts and entertainment. This illustrates the versatile mindsets automation will encourage.

Encouragingly though, the relationship between jobs and automation is nuanced.  A recent report from the World Economic Forum suggests 133 million new jobs could be created by the technology.  

According to the Brookings report, highly creative or technical positions are  likely to benefit, but the study notes that administrative and legal professions will be partially impacted by automation. But in what way, and how soon, will these changes take place?

In the UK,  the impact technology will have in shaping financial services will be felt as soon as the Spring. 

Starting in April, Making Tax Digital for VAT will require businesses to file their tax digitally using cloud accounting software. Part of the UK Government’s drive for a digital Britain, MTD or VAT will bring manual bookkeeping into the modern age, enabling HMRC to digitally track individual invoices. 

The legislation will remedy costly tax filing errors and change the way accountants work. Free from manual, repetitive booking tasks using paper or spreadsheets, accountants will work more collaboratively with clients in the cloud, and their value will be determined by their advisory skills. 

The evolution of the accountants’ role is articulated by our petitioning of the Oxford English Dictionary to change the definition of accountant to reflect the advisory services many accountants already supply.

Yet despite the business benefits of MTD for VAT, our research indicates a resistance to change. With just weeks to go to before the legislation is introduced, we found fewer than half of the UK’s accountants feel prepared for the digital switch, despite the fact that one third of those surveyed said they expect digital tax to increase their firm’s productivity.  

But whatever the reason for this reticence, everyone knows change can be a challenge, and helping an industry adapt to digital transformation requires empathy. 

Here are some tips to help your workforce embrace transformation in your industry:

1. Mind your language. We’ve a tendency to describe technology in its own terms, but not so long ago we thought cookies were biscuits. Many pretend they understand terms like ‘server’ and ‘cloud’, but don’t. Use plain English when talking to staff or customers. Use simple, functional terms wherever possible.

2. Make learning easier. Nobody wants to read a training manual. Make your communications accessible, from human customer service and personal interactions, to infographics. To help businesses get ready for MTD for VAT, we’ve created Dexter the Digital Tax Advisor an animated tax advisor to help businesses make the digital switch.

3. Encourage ownership. Give employees the confidence to experiment with the latest technology, and do not discourage mistakes. And for customers and business partners, encourage early adoption. The longer you leave a new technology adoption task, the scarier it can seem. Encourage stakeholders to become experts in the new technology by supplying online training courses and free trials.       

4. Expect fear and suspicion. The Victorians thought locomotion would cause madness and death, and Mark Twain didn’t invest in the telephone thinking the technology would fail. Factor in the natural reticence any audience will have when presented with new technology and build this reluctance into your implementation schedules. Beta testing is useful, but beware of beta testing with a captive or expert audience, try to test your product with the lay-person too.       

Technology moves faster than culture, and often informs it. By empathising with the wider community interacting with the new technology, and planning for resistance to change, you can help stakeholders adapt. For more information about Making Tax Digital for VAT and how it will affect small businesses and accountants from April, visit Xero’s hub here.