September 2022
In the eighth episode of our ‘In Conversation with…’ podcast series for 2022, Partner Lucy Lewis speaks to Dr Grace Lordan, an Associate Professor at the London School of Economics and the Founding Director of The Inclusion Initiative which supports firms to build more inclusive workplace cultures.
Dr Lordan discusses the importance of leveraging under-represented talent in the workplace and the practical steps that businesses can take, particularly in light of the challenges presented by hybrid working. She questions the concept of the four-day work week, arguing that employers could instead increase productivity by reducing presenteeism and offering greater flexibility. Moving on to technology, Dr Lordan touches on her recent research which finds that AI is actually less biased than humans when used in recruitment, and discusses the value AI can bring to employers. She also considers her research findings on automation, including the prospect of widening inequalities, and reflects on how the skills agenda needs to shift to accommodate the changing needs of businesses.
In Conversation With…Grace Lordan
Series 2: Episode 8.
Lucy Lewis: Hello, and welcome to The Future of Work Hub’s ‘In Conversation With…’ podcast. I’m Lucy Lewis, a partner in Lewis Silkin’s Employment Team and in this podcast series, I’ll be hosting exclusive discussions with innovators, business leaders and thought leaders to explore their perspective on what the future of work holds.
The pandemic has accelerated longer-term societal, economic, and technological trends, giving us a unique opportunity, a once-in-a-generation challenge to rethink who, how, what and where we work. But although the pandemic has been a significant catalyst for immediate change, it's only one of the many drivers of change in the world of work. And today, I'm really delighted to welcome Dr Grace Lordan onto the podcast. She is going to talk to us about some of the biggest future of work trends, including the impact of AI, automation on work, and diversity and inclusion more generally. Dr Lordan is an economist, she is the Founding Director of the Inclusion Initiative, which aims to support more inclusive workplace cultures. She is also an Associate Professor of Behavioural Science at the London School of Economics, and she is an expert on the effects of bias, discrimination, and technological changes. She is also the author of a really interesting recent book, ‘Think Big: Take Small Steps and Build the Future You Want’, and she is a member of the UK Government’s Social Mobility Taskforce as well. So, welcome, Dr Lordan.
Grace Lordan: Hi Lucy, how are you?
Lucy Lewis: I'm great. And it's so fantastic to have you, because one of the really wonderful things about this podcast series is I get to speak to so many people with absolutely fascinating jobs, but yours is absolutely up there, and I wondered if you could just start by telling us a little bit about yourself, but also, the focus of your research at the LSE and what the Inclusion Initiative is all about?
Grace Lordan: It's interesting, Lucy, because when you ask me that, I think when you're in the weeds of your own job, you don't often think about it as fascinating. So, I'll thank you for the compliment and, when I reflect, I guess, it really is fascinating. So, I spend most of my time doing research that I hope will really impact either on society or on firms, and I work with people in society, and I work with people in firms, which is different to what other academics do, where they sit at their desks and produce research. I think working hand in hand with people in society and also firms, really helps me work on projects that are just at the frontier of what people actually want to know, and in the end, it ends up for me being what I would call ‘me-search’, so, it's kind of research that's led by the interest that I happen to have in the day. So, for example, at the moment, I'm doing some work that considers what the metaverse will do for inclusion in the future of work, which I think is very relevant for people who are tuning into this podcast. I am also interested in the role of AI for managing people, and also to help society. And finally, I'm really interested in skills and what the future of skills actually means. So, I'm hoping to be able to tell individuals really specific advice about what they should invest in: (a) if they want to have higher income in the future, and (b) if they want to have a job they're actually happy in.
Lucy Lewis: Fantastic. And we will definitely come on to talk about those things – particularly AI, and particularly skills and automation and the impact of skills and where the skills focus should be. But tell us a bit about the Inclusion Initiative, because I think that's really interesting.
The Inclusion Initiative
Grace Lordan: So, I set up the Inclusion Initiative in LSE in November 2020, and I was really proud of the name, but when people hear the name, they automatically associate it with socially-responsible workplaces where we really create happy workers who have a sense of belonging, and I do think that's important, but the underlying mission of the centre is to really enhance inclusion in the organisations to allow workers to become more productive. So, if you're somebody who is under-represented in the organisation, you might feel on occasions that you have some great ideas and you can't get heard. We want to figure out how we can actually get teams working better together so those outlier ideas get out there and we innovate more, and we also want to think about how we actually get people working together in teams and also individually, so we become more creative, we become more innovative, and we assess risk better. The whole thing was kind of born from me working with people who place bets in these concentrated portfolios on what companies are going to be the big company over the next 10 years and realising that, in those moments, too often you have groups of people who are too similar to make good decisions. So, we want to add diversity into that conversation, but often when you add diversity into the conversation, you often add conflict, descent, pressure to conform. So, how can we create leaders that allow us to build teams, that get us to better outcomes and also, bring along under-represented talent which I don't think we're leveraging in the way that we could in the UK.
Lucy Lewis: Yes, I definitely agree with that. And actually, your idea of building teams, getting teams functioning together and more productively, that leads me to the next thing I wanted to talk to you about, because everybody listening knows that the pandemic has accelerated this trend towards hybrid working, and businesses that might never have thought about it, they are all now experimenting. We're seeing hybrid working policies, hybrid working practices, and I know one of the things that you've talked a bit about is that we need to be careful in that, that we don't have unintended consequences for diversity for inclusion for teams, for productivity. That we don't create and we don't embed the inequalities that we've had in the old ways of working. I wondered if you could just tell us a bit about what you see the potential challenges as being? But I guess, more importantly, any practical advice you've got for businesses who are embracing this hybrid working challenge, for ensuring that you are not doing those things, you're not embedding those inequalities, and you are allowing teams to flourish.
Embracing hybrid working challenges
Grace Lordan: It's a really great question, and I think the starting point that I would say to those businesses is, if somebody comes through your doors and advocates for a four-day work week, or advocates for a Tuesday, Wednesday, Thursday… I would send them away because there is no one solution that fits all companies. Every job is going to be different, and every task is going to be different. I think for professional workers where we want to create, innovate, and assess risk, the starting point has to be, ‘what is the time that we need to bring the team together in order to have these sessions where they really go deep into discussions on what is the best way forward?’ and then they divide up the tasks and they go away with autonomy to do those tasks in a linear way, so, this kind of deep dive into productivity. For some companies, that might actually be as little as a month, which basically means you bring people together for this really deep dive where they manage to crack the back of what they're doing, so, the inspiration part, and then they all go off separately to do the perspiration part independently. And what I like about that is that the starting point isn't, “we're going to do this amount of hours, now work your team's productivity around the hours we've written, for no reason at all actually”. What I like about this is that it says, the first that is protected, is that moment where the team actually comes together, and then, actually, when we're not coming together to create, innovate and assess risk, people can go away and work in whatever style suits them. And for some people, they will be extraordinarily creative in bursts of 12-hour sprints, or 14-hour sprints. Myself, I'm massively unproductive for the majority of the month, and I get four or five days where I'm incredibly productive and I'm incredibly exhausted when it's over. There are other people who work incredibly well in the night, this idea of owls being forced to get up with the larks is really something that we actually need to move away from. So, I think for the future of work, really focusing on what is the optimal time to bring teams together when they're really, really, really, engrossed, embracing dissent, and pushing the company forward. And then, I think when it comes to inclusion, which is a really good question, we also start sometimes in the wrong place. So, I think we sometimes start with a CEO making a statement, or Human Resources putting in place structures that will enhance inclusion, and I think that will get us progress, but it won't get us to where we want to be, where you've asked about productivity. For productivity, we do need to have an inclusive leader, and that person really needs to get, actually, that it is in their best interest as a leader to have diverse people around the table. It isn't competition for them, and in fact, their lives are going to be made much easier if they realise that their role as a leader is to bring together those diverse perspectives rather than come up with all the solutions. And when I look at leaders now, particularly in finance and technology where I work, I notice a kind of a shift towards that mode of thinking where, instead of the leaders needing to have all the answers, they're looking to the team for inspiration, and then their gift really, which is, and I use that word strategically because it is a gift, is joining together the dots of these unique diverse ideas, in a way that really enhances the business they're working for.
Lucy Lewis: That's really interesting and so helpful on productivity. On the environmental bit, and actually, then I'll come back to the four-day week, because I wanted to ask you about that too but, on the environmental bit, one of the things I think really surprised people was the research that came out sort of towards the end of the pandemic that said, actually, there has been an increase in things like workplace bullying during this work from home period. It sort of felt counter-intuitive, but actually, potentially that's arisen from creating an environment where actually, people find it harder to speak up when you're working remotely or working away from the office. Environmentally, do you think there are things that businesses can do to ensure that people feel they're part of a team?
Creating inclusive environments when working remotely
Grace Lordan: I think the first thing is, you know, thinking about what bullying actually means. So, in the 1990s, it was quite common to get shouted at in work, and I think that wouldn't happen now, right? So, you know, HR departments really are in place in order to address that. So, the new bullying is isolating and ignoring somebody. So, if there are people who are tending to bully, it's much easier in a pandemic when you're working at home, where you can actually blame the pandemic, the fact that you are actually disconnected from the work canvas for why you're not including people in conversations, and we did see that, you're actually spot on. With the virtual world, we saw a rise of what economists would call ingroups, where people who have affinity with each other, whether it's through sharing demographics or sharing a football team, or sharing a love for opera, whatever it is binding them together, did actually come together, exclude workers who could add incredible value to the business, and ultimately, that was more done through not being invited to the meeting, rather than somebody being shouted down in a meeting. So, it's a much more subtle thing for Human Resources departments to tackle, but it absolutely needs to be tackled. I find it always interesting that politics in businesses will always play out, and in the absence of it being able to be played out by throwing a tantrum and pushing somebody over, isolation seems to be what's actually being used unfortunately in this decade, which I'm guessing is as damaging, if not more damaging, than being shouted at.
Lucy Lewis: Yes, really interesting. I'm going to take us back a little bit, because when we were talking about flexibility and productivity, one of the things you mentioned was the four-day working week, and again, everybody listening will know that a lot of countries, including the UK and Ireland have been trialling four-day weeks, companies getting signed up to do that, and that comes from what you're talking about, this idea of flexibility. Everybody actually wanting to break down the barriers a bit and be more flexible, employers, employees, the government encouraging flexibility. And I wondered if you'd say a bit more about how you think that works, because I tend to think when people are thinking this idea of a four-day working week, they're thinking, well, some people will work Monday, Tuesday, Wednesday, Thursday, some people will work Tuesday, Wednesday, Thursday, Friday, but it needs to be more flexible than that, doesn't it?
Four-day work week
Grace Lordan: It does. You know, I always feel bad talking about the four-day work week, because some of the people involved I know really, really well, and I think when they conceived the idea of the four-day work week, they really wanted to rock the boat and make it easier for people who needed flexibility, you know. So, if we think about women in particular, they do tend to still have more of the caring responsibilities and presenteeism really hurts them, so, not productivity, which they are… tend to be hyper-productive at times, but it's presenteeism hurts them, so this four-day work week gives some flexibility. And then I think Covid happened, and we had this kind of natural experiment where we saw actually, there's lots of different modes of working beyond the four-day work week that are much more imaginative, and also, seem to have, and I use the word 'seem' because we don't have causal evidence, but do seem to have much better impacts both on productivity and inclusion. I think the four-day work week needs to move, given the Covid pandemic. So, for me, it's too rigid, it doesn't really speak anything to what teams need themselves or what a job needs individually. It doesn't make sense that every job and every team need to be there for four days a week on particular occasions. And you know, it's really none of my business as a manager if people in my team choose to work 7 days a week and work much lower hours on that week, because maybe they like to have their mornings for something and their evenings for something. Or maybe they're only working two days a week, but they're working incredibly long hours, provided they're doing two things for me, turning up for those team deep dives which are fundamentally really important for the creative and rigorous work that we try to do. And secondly, that they are putting in the hours that allow them to be productive in the tasks that are set for them. But when they do them, I think, is none of my business, and the four-day work week still has workers essentially being audited for presenteeism, because you need to declare the days that you're working.
Lucy Lewis: Yes, I think that's such a good point. It's really, really useful to talk about that, because I think you're right, there is this perception that the four-day week still is kind of the same structure, just one day less, and actually, there's an opportunity to be way more creative with it, and really, I'm hopeful that that's one of the things that the experiment will show. But I guess… I guess we’ll have to see.
Grace Lordan: The problem with experiments always is that researchers can find what they actually want to find. So, I just, I really hope that in some ways because we don't have a comparator of much more flexible working, you know, that isn't actually running in this experiment. I do hope that experiments are run on other modes of working, that allow us, in the way that we would compare projects if we were choosing them in a company, or drugs if we were choosing them for the NHS in ways that we can compare. And I think companies themselves are best placed to do those experiments with their people, essentially.
Lucy Lewis: Yes, totally agree. Moving you on to something so that we've got time to cover it, because I know people are really interested in this topic and you've done some research on AI and recruitment, and I'll let you talk a little bit about that. But for our listeners, summarising really briefly, and totally fascinating for me. You've found that AI is more efficient than humans at recruitment, but we still have this public perception that actually, there's something a bit dodgy about AI, and people will prefer recruitment to be done by people. I'm really interested in you sharing a bit more information about that, and what you see as the benefits of AI in recruitment?
Artificial Intelligence in recruitment
Grace Lordan: So, I think the first thing is that AI is biased, so, the media are right when they say that AI leads to bias decisions. It's just that our work which was joint with Paris Will and Dario Krpan, highlighted that when you actually summarised the evidence that's available in the literature, even though it's bias, it's less bias than humans. So, I think it’s less bias in terms of decision-making, it's much more efficient, and obviously, it's going to save money and these are just… it's called AI in the paper, but when you really get under the hood, a lot of what people are doing are using actually quite straightforward algorithms to do selection. And I think the reason why people want humans to still do recruiting, which really is the grit in getting AI used in this process, rather than the AI being competent, is I think as humans we are over-confident in our ability to choose new colleagues. To the extent where we still rely on interviews, I mean, I find this baffling when I talk to corporate companies that were so obsessed with the idea that we need to meet people for 30 minutes in an hour and that we think we can assess their ability to do tasks in those 30 minutes in an hour is fundamentally really bizarre to me, and I'm a big fan of task-based assessments, where basically, again, a computer is doing the grading. So, you ask yourself, what are the tasks that are needed for the job, and can I get a computer to do the grading? And, in the absence of that, a lot of the lean on the decision that the human is making going on that task. I'm a big fan of using recorded interviews for people rather than bringing them into the room, because I think firstly, it allows people to do a do-over which often happens in life, you know, if you're nervous, but secondly, it allows you to bring many more colleagues into the decision-making process. So, junior colleagues can be involved in somebody who is very, very senior’s, hiring and they can have time to consider that interview.
So, I mean, when we wrote the paper, I went into writing that actually thinking that AI was more bias than humans just because of the newspaper articles that I had written, and it surprised me, so I've changed my mind. But fundamentally, I think that we should have, because it's cheap as well, these algorithms that are used in recruitment, fundamentally, we should have machines involved in the recruitment stage, they should be assessing tasks that are related to the job, they should be assessing whether or not the candidates are better for the job. I think one thing that has to be done is, we need to make sure that the algorithms are changed so they don't over-rely on what I would call signals that are unrelated to the job. You know, like the colour of your skin, the gender that you happen to be, where you happened to go to university and they lean towards assessing the skills, talent and ability that are available for the job. We're not there yet with the algorithms, but it's not anything to do with the capability of writing an algorithm, it's just that people haven't done it yet, so, this isn't something that's fundamentally incredibly difficult. So, for me, if it were available to me, and I have to say, I'm in a university who are way behind when it comes to using…all of them, not just the one that I'm in…who are way behind in using technology in this regard. But I think technology should be part of the decision-making process and, for me, if it were available to me at the London School of Economics, I would be questioning myself if I was making a different decision to the machine, and getting other people involved to make sure that me flipping that decision was the right thing, rather than dismissing the machine as something that's actually useless in this particular situation.
Lucy Lewis: And do you think there are things that can be done to address this public perception, or do you think that's just a time thing. This is coming, people are going to get used to it, we just need to keep moving forward with it and not stand back because of the public perception?
Grace Lordan: You know, I think, I mean, in technology, in big tech in particular, in the big companies that you might think about, it's used quite often, and I'm guessing they don't have any difference in the number of people who apply for the jobs. I think the big question which we're trying to answer in a paper that is just started, is whether or not using AI leaves companies open for a legal risk that using humans does not. In the same way that maybe you would expect driverless technology when it's on the road does that. And I think once we settle actually that it's either equal or lower legal risk than having humans involved, it will just flood in, there will just be a tipping point. But at the moment, it is there, and I would think actually, very often people are interviewing for jobs and they don't even know that they're being evaluated by an algorithm, because in many countries there's no need to actually tell you that, and I'm guessing you're getting a much fairer outcome than you would if you were to be evaluated by humans, particularly if they don't have an affinity with you.
Lucy Lewis: And actually, for people listening that are interested in the legal risk, we've written quite a short opinion piece on what the legal risks and what the legal challenges are, so, you can find that on our website. Again, I'm conscious of time, Dr Lordan and I wanted to talk about the skills and the research you've done around automation. Because you mentioned that right at the beginning, and it's been something that we've been talking quite a lot about in the Future of Work Hub and the research you’ve published, 'Automation and the Changing Nature of Work', that finds that some occupations are, probably not hugely unsurprisingly, you know, ones that require physicality or muscle, those that can be codified, they are more likely to be replaced by machines, but jobs that require abstract thinking, people engagement, soft skills are much less at risk. It would be great just to share, you know, a minute or two about what that research showed. But then I think, the thing that we're really interested in is, what the implications are for businesses in terms of the skills agenda. How we shift the skills agenda towards ensuring that there's a better match between the skills that businesses are going to need in their people and the skills that they actually have now?
The shift in the skills agenda
Grace Lordan: It's a really good question. So, I think, you've summarised really nicely the kind of crux of the research. I've done a number of papers on automation and the changing nature of work, and jobs that are very, very manual are continuously being replaced, which I think is a good thing actually, machines are substituting for them, and the nicer jobs are being left behind. And those jobs tend to involve high-levels of competencies, so, high-levels of cognitive ability, and also, an increase in soft skills. What isn't spoken about a lot in it, which is in the paper but the media don't seem to grab it as much, is it also suggests that we are moving to what I would call a ‘winner takes all’ economy. So, in the professional jobs, we see that machines are becoming much more complimentary for what people are actually doing on a day-to-day basis. So, for example, if you’re a high-frequency trader, things that you did 20 years ago, machines have now replaced, so you need to be much more creative as compared to before. But within those jobs, there's much higher stakes to being creative, so there's a steeper gradient in the term with respect to income reward. The same for law, where we see the complementarities being such that a lot of the tasks that were down to lawyers 20 years ago are automated, so it really comes down to critical and strategic thinking, and an ability to synthesise information quickly that makes you a good lawyer, and there's a really steep gradient on income for those skills. And of course, one of the symptoms of all of this is, one, widening inequalities, so the jobs that are kind of medium paid in law, in trading, in building, they are essentially being hollowed out, and we have more people who are either high income or low income with less in between, which does bother me, you know.
Grace Lordan: We've spoken a lot about machines and how they can replace recruitment for example. I'm now doing some work on the metaverse, which kind of leads to the same conclusion that machines are going to bring a lot of gains to business, and at the moment they're not taxed, which is a problem because of this actual widening inequality. And then you can think about, okay, “what does this actually mean for skills in business?”, and I think, because we don't teach kids in schools soft skills, I think businesses really need to start addressing that and some of them are, some of the very top firms have been doing this for a number of years anyway, but the skills to focus on for the future are resilience, adaptivity, creativity, and I think also, an ability to talk across disciplines, which is a really, really kind of interesting idea - that I should have really deep knowledge of one specific thing, but be able to talk across other disciplines by knowing their major lessons in a way that allows me to bring more creativity and more innovation to my own work. And this really kind of encapsulates the idea that much of my inspiration as an individual and much of the inspiration that I see from people who actually create in society, comes from bringing ideas together, rather than having this light bulb moment that's totally unique to anything in society.
Grace Lordan: So, if I were businesses, I would really focus on those skills, and adaptability again. The economy is going to be changing, so people are going to need to continuously upgrade their core skills, and the one thing that deciphers whether somebody is actually proactive or inactive in doing that, is whether or not they're an unadaptable person.
Lucy Lewis: Really fascinating and really helpful. I've got time for one more question, and it's a question that I've been asking everybody on our 2022 podcast series. We know the world of work is going to look totally different in ten years-time, probably, in ways that we can't predict now, but if you had the power to ensure one change for the workplace of 2032, what would it be?
Future of Work
Grace Lordan: It would be to increase the number of inclusive leaders who do not hire their friends or hire based on their own affinity, but hire for diversity and for perspectives that they do not yet have and that really requires a change in ego in our leaders and really requires a change of perspective towards a diversity mindset. And I think then, the type of work I do, rather than being called inclusive leadership will just be called leadership.
Lucy Lewis: Really, really great thought. I'm really hopeful for that too, so let's keep our fingers crossed. Thank you so much, Dr Lordan, it's been a really interesting insight into some very current issues.
If you'd like to find out more about Dr Lordan or the Inclusion Initiative, you can visit www.gracelordan.com or you can follow Dr Lordan on Twitter and Instagram at proffgracelordan where you can sign-up to her newsletter on work and on behavioural science.
Thank you again, Dr Lordan, for joining us.
Grace Lordan: Thank you, Lucy. You're absolutely awesome, and see you soon.
Lucy Lewis: See you soon.