How well is your industry preparing for the automation revolution?
by Dean Del VecchioMr. Del Vecchio is Executive Vice President, Chief Information Officer & Head of Enterprise Shared Services for The Guardian Life Insurance Company of America®. Visit www.guardianlife.com
Automation is changing the workplace. It’s affecting virtually all industries and nearly every job in one way or another. Such dramatic transformation seems inevitable and, in fact, is often necessary for business growth and long-term success.
There are a number of significant trends taking place in today’s workplace affecting both employees and employers. Those who are best prepared for this revolution and most willing to embrace these changes will be well positioned for success now and well into the future.
Considerable Change Anticipated
A growing number of Americans feel that their jobs and work environments are changing. The Next Generation of Work, part of the Fifth Annual Guardian Workplace Benefits Study*, indicates that approximately one-third of businesses and workers anticipate considerable change in the next five years to the nature of work and required skills. This belief is particularly true for those employed by larger companies or industries in which automation has already begun to have an impact.
Employers most likely to expect transformation include those who have employees in more than one state, those in the high-tech sector, those who have been in business for less than five years, and those with a higher proportion of contingent workers, such as freelancers, independent contractors, consultants, or other outsourced and non-permanent workers who are hired on a per-project basis.
The degree to which working Americans expect change in the work environment seems partly a function of generation. Forty-three percent of millennials expect changes in the workplace compared to 35% of baby boomers.
Technology Brings Flexibility
The traditional 9-to-5, desk-job model of work is becoming a rarity. Technology is allowing us to work from virtually any place on the planet, whether from home, an airport terminal or a café in Paris. Work emails can be read while in a restaurant, conference calls can be conducted from a hotel room, and presentations can be delivered from the dining room table via webcast.
The number of U.S. employees working remotely increased 115% between 2005 and 2015. Today, remote workers represent 18% of the nation’s workforce and it’s predicted that this figure may rise to as high as 30% in 2025.
The opportunity to work remotely is highly valued by workers, with more than four in ten saying they would be interested in working remotely if given the opportunity. The option to work away from the office is also a major consideration when employees consider taking or leaving a job. An agile workforce can also benefit an employer, who can potentially reduce employee costs by up to 13% per worker.
Guardian’s study reveals that 26% of employers anticipate continued growth in telecommuting. Companies most likely to expect an increase in telecommuting in the next five years are those in the professional/financial services sector (37%), followed by technology (35%) and larger firms (31%).
Automation is Changing Work Processes
Technology is affecting the workforce in ways that go well beyond the ability to work remotely. It’s actually changing the way work is done. Technology allows companies to reinvent their operations, create entirely new products and distribution channels, and improve engagement with customers and suppliers.
While many people associate automation and technology with having an impact on manufacturing and assembly line production, the reach is more pervasive. Even in the highest-paying occupations, machines will play a factor, complementing human capabilities in many ways. For example, someone working in a financial services role may find that the use of technology can increase their efficiency and make them more effective by eliminating some of the routine tasks. Automation can allow employees to spend more time focusing on communication, creativity and value-added aspects of their jobs.
More than half of the employers in Guardian’s survey believe that the need for greater efficiency is driving changes to the nature of work. The ability to compete in the marketplace against non-traditional and more aggressive competitors is also a primary reason that employers are turning to automation.
Increased automation in work processes is especially prevalent in companies in the professional and financial services, healthcare and construction sectors, where a majority of employers expect more efficient processes to change how they work and the skills required in the future. The need for improved efficiency is also seen as a driver for change among larger retail firms, as well as technology and manufacturing companies.
Talent Recruitment is a Challenge
As automation creates new ways of doing business and demands that we develop novel skills to work with new machines and processes, gaps have developed between the skills employers require and the skills possessed by employees. Increasingly, job openings exist in occupations that require higher-level social or analytic skills, while the importance of physical or manual skills has decreased. Knowledge-intensive and service-oriented sectors, such as education, healthcare, and professional and business services, have seen employment nearly double.
As a result, employers are experiencing challenges in finding qualified talent for today’s increasingly technology-enabled workplaces. Fewer than one in five employers believe they are adequately prepared to hire and train talent for a more automated work world. Yet, only 23% of companies anticipate changing the way they recruit in the next five years. Businesses expecting significant employment growth are more likely than others to be addressing their talent-acquisition strategies.
Skill Preparation Varies by Generation
While automation is unlikely to eliminate entire jobs, many tasks and activities will change in an increasingly automated workplace. Workers who best prepare themselves for these changes will thrive in tomorrow’s workplace.
While some workers have learned more specialized skills that will serve them well in the automation revolution, many have not. A minority of working Americans have taken on a new role at their current employer (23%), received cross training (18%), changed careers (12%) or returned to school for further education (11%).
Compared to other generations, millennials are most likely to have taken steps to prepare for future jobs. Thirty-two percent have taken a new role at their current employer compared to only 19% of baby boomers and 21% of Gen Xers, who still have 10 to 25 years before retirement. In the case of baby boomers, one in five would retire when faced with significant work changes.
When it comes to integrating technology seamlessly into their lives, millennials are in the fore. More than 60% already use intelligent personal assistants (e.g., Siri, Alexa) compared to 40% of baby boomers and Gen Xers. This suggests that artificial intelligence may take on a significant role in future recruiting and training efforts.
Employers Can Take Steps to Prepare For Tomorrow’s Workplace
Faced with these challenges and opportunities, employers need to update workforce strategies to recognize how the workplace is evolving and to address the ramifications of increased automation. The following steps can be taken by employers to build the optimal workforce given the changes created by the automation revolution.
Make Talent Acquisition and Learning a Top Priority. Employers should reinvent recruiting, hiring and training processes to close existing skill gaps and build competencies. The role of learning can be elevated by making it a C-suite imperative to ensure resources are successfully employed.
Establish an Agile Workforce Strategy. Employers should anticipate and respond to on-demand talent needs, or ensure that specific skills required to remain competitive in a rapidly changing digital world are met. Businesses should also utilize workers from a variety of employment arrangements.
Prepare for Demographic Shifts. Organizations should prepare to capture the institutional knowledge and experience of baby boomers as they begin to exit the workforce. They should also adapt workplace strategies for the millions of working Americans who prefer flexible or remote work arrangements and non-traditional career paths. Employers might also consider adopting global recruiting efforts that are made possible by today’s technology.
Evolve the Organization’s Culture. Companies can implement a change management strategy that enables the entire organization to overcome barriers to success in a more automated and digital world. This will address common organizational shortcomings, such as poor communication, organizational silos, fear of risk-taking, lack of diversity and weak customer centricity. These deficiencies will become more costly in the automation era.
Change in the workplace is unavoidable. But while the changes spurred on by technological advancements will have a significant impact, they won’t bring about a scenario in which robots replace humans in many endeavors. Although some individual tasks and activities may change, it’s very unlikely that whole jobs will be eliminated in the workplace of tomorrow.
The best advice is for workers and employers to understand what additional skills are needed in order to maximize their effectiveness working with technology. This will put them in the best position to succeed as the automation revolution continues. ◊