AI and algorithmic management in European services sectors: prevalence, functions, and a guide for negotiators

Steven Rolf (2024), Friedrich Ebert Stiftung Report

This report discusses the growing use of AI and algorithmic management systems (AAMS) in European service industries:

  • AAMS are proliferating at speed throughout the Eu­ropean service sector. They are spreading beyond the platform economy, and becoming prevalent in ‘ordinary’ workplaces such as offices, restaurants, and contact cen­tres. In large part, this is because they are being embed­ded in pre-existing enterprise software.
  • While AAMS vendors loudly acclaim their advantages and benefits, their products pose stark threats to work­ers. They harbour a risk of illegitimate surveillance of workers, intensification of the pace of work, creation of knowledge imbalances between workers and managers, and (often poor) decisions being made without sufficient oversight.
  • The report provides an overview of AAMS functions. These are extremely wide-ranging and cover key mana­gerial functions, including coordinating, directing, eval­uating and disciplining workers. AAMS are deployed at every stage of the employee lifecycle, including recruit­ment and hiring, training and development, task alloca­tion and scheduling, and performance management and productivity-tracking.
  • The report examines four specific examples of AAMS: two for sales work (Salesforce and ActivTrak), and two for warehouse management (Infor and Blue Yonder). They demonstrate how AAMS help managers exert granular control over individuals and teams through the algorithmic generation of performance metrics and rec­ommendations for managerial action (including firing). They also demonstrate the extraordinary information imbalance produced by AAMS.
  • Next, the report draws on a range of reports to offer sug­gestions to trade unions for collective bargaining over AAMS in the European services context. It emphasises the urgent need for effective negotiation and regulation to mitigate potential risks, both for employees as well as for firms which are at risk of being misled by ‘snake oil’ AAMS vendors.

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