A report from international law firm Herbert Smith Freehills “warns of an unprecedented rise in workplace activism ahead, across all sectors and geographies”.

The study is based on a survey of senior executives from 375 large companies, one fifth of which are headquartered in Australia.

More than half of the respondents named workforce actions as a potential risk to corporate reputation, exceeded only by cyber threats and economic recession.

Pay and benefits and the status of casual workers are seen as “significant triggers of activism” by these companies.

Human opinions and social media present ‘challenges’

The report describes a “paradox of the robotic age” where automation will make human skills more valuable.

The World Economic Forum estimates that 75 million jobs will be lost to automation by 2022. However, 133 million new jobs will be created which will require “uniquely human qualities such as emotional intelligence and fine judgment”.

“But unlike robots, humans have opinions – and that presents its own challenges for employers,” the report states.

“[T]hose working for them are becoming more vocal in articulating their views – about the workplace, their employer and about wider social issues – enabled and amplified by social media.

“The voice of the workforce will insist on being heard as never before.

“If traditional, internal communication channels fail to meet their needs, external means of raising concerns will fill the gap.

“Employers need to be prepared for what’s ahead.”

Workforce activism a risk to revenue and reputation

Respondents in the survey said that workforce activism could cost them up to 25% of their global revenue, while Australian respondents identified workforce activism as the second biggest risk to corporate reputation.

The report states that “familiar, formal and regulated methods” of employer and employee interaction like unionisation and employee representation are “rapidly becoming matched by unregulated, unpredictable forms of worker activism, amplified and coordinated through digital communication”.

“Employers are in a new world of employment relations and, at times, it feels like the Wild West.

“This rise in workforce activism will require an entirely new mindset, from new ways of engaging with the workforce to a more proactive and transparent discussion of corporate values.

“Trusted techniques will have to change; attempting to limit what employees can say in public seems increasingly unrealistic in a hyperconnected, social media-dominated environment.

“The previously distinct boundaries between corporates, their workforces and society are fading; if organisations are to win the war for future talent and avoid the rising risks of worker activism, they need to be one step ahead,”

‘Purpose increasingly matters over profit’

Herbert Smith Freehills CEO Mark Rigotti said we are “all living through an unprecedented change in the world of work” which he believes is “much more profound” than the significant focus on technology and digital innovation.

“The very reason why companies exist is being questioned,” he said.

“The drive to create value for shareholders is being replaced with an aspiration – driven largely by the workforce – to create value in the widest possible sense; for the company, for the community it serves, and for the world in which it operates.

“People want to work for employers who make them proud, and they want the time they spend at work to be fulfilling.

“In this new world, purpose increasingly matters over profit.”