The Impact of DX and Work Style Changes in the Era of Living with COVID in Japan

March 27th, 2023 [No. 109 – 2022]

Fujikazu Suzuki
Research Center for Solidarity-based Society, Japan

The Impact of DX and Work Style Changes in the Era of Living with COVID in Japan
Part 3-2: DX, Human Resources Management, and Labor Relations at Companies (Continued)

(2) Current State of Labor-Management Communication around Digital Transformation (DX) and Related Issues

In many cases, the introduction of new technologies, such as the promotion of DX, has a major impact on the nature of employment, including changes to employees’ tasks or reassignment of personnel due to the reorganization of existing jobs. It is therefore extremely important to build internal consensus through an approach that considers the assent of employees. Labor-management communication via various channels plays a significant role in this regard.

According to the Ministry of Health, Labour, and Welfare’s “Survey on Introduction of New Technology Such as AI and Labor-Management Communication” (2021), about half of companies that introduced new digital technology in the previous five years held labor-management discussions with labor union or employee representatives before and after its introduction. Out of the companies that held such discussions about the effects, around 90% responded that “Labor-management discussions had several positive effects.” The most common effects mentioned by many of these companies were “Employees’ feedback was reflected in the workplace, leading to effective implementation” (50.1%), “Employees’ understanding was obtained, and introduction/application proceeded as planned” (48.6%), and “Employees’ assent was improved, leading to smooth implementation” (46.9%).

Furthermore, it is notable that in cases where a dedicated group (specialized department, project team, etc.) was established within the company to study the introduction of new technology, the proportion of companies who responded that “Employees’ assent was improved, leading to smooth implementation” tended to be higher (62.5%). This suggests that Evidence-Based Management from a professional point of view is important in order to ensure the assent of employees when introducing new technology, and to promote its establishment and smooth operation.
According to the findings from various case studies of labor-management discussion activities when introducing new technologies, which were conducted through interviews with company personnel in charge, the following broad trends were observed:

  • Both labor and management recognized that the purpose of its introduction was to reform work styles, reduce workloads, etc. as a result of improving productivity, not to downsize the workforce.
  • Both labor and management shared the perspective that if productivity is improved due to new technology, the benefits will be passed on to workers through increased wages, shorter working hours, etc.
  • If the introduction of new technology had an impact such as changes in work methods and tasks, some companies focused on human resource development so that workers could make effective use of the newly introduced technology. In addition, there were companies that revised their human resources systems to positively evaluate workers who tackle new job fields.

Among the interview case studies, there were also cases where labor-management communication was escalated from the company level to the regional or industry level. This is to address specific issues that could not be resolved through labor-management discussion, such as providing region-wide support for companies or workers who were unable to adapt to technological innovations.

For instance, in the interviews for one prefecture, respondents reported cases that they launched consultative bodies by region and by sector based on the industrial structure and regional circumstances. Along with labor unions and employer associations, other related organizations in the region, such as industry, government, universities, and financial institutions, were involved in the consultative bodies. Establishing consultative bodies by industry and region made it possible to clarify and share region- and industry-specific issues, then engage in collaboration, with relevant parties recognizing their role. As a result, it is said that industry-government-academia communication has been achieved for implementing effective initiatives, such as career education, skills upgrading training, etc.

For initiatives at companies relating to the promotion of DX, it has been found that internal consensus-building by securing employee assent is important, just as it was when introducing new technology in the past. Also, even though there are only a few examples, ongoing attempts to go beyond the company level and establish consultative bodies by industry and sector will be extremely interesting in terms of the future development of labor-management communication.