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Automation and Its Impact on WorkPlace

Understanding Automation in the Workplace


Automation is rapidly transforming the workplace, but the changes it brings are more nuanced than a simple choice between human and robot. While technical feasibility is a necessary precondition for automation, other factors such as cost, labor dynamics, and regulatory and social issues also play a crucial role.


Automation

The cost of developing and deploying the hardware and software for automation is a significant consideration. For instance, replacing human cooks earning $10 per hour with expensive robots may be technically possible, but it might not make business sense because it may cost too much and not provide a good return on investment.


The supply-and-demand dynamics of labor also influence the decision to automate. In industries where there is a surplus of cheap labor, the incentive to automate may be lower. Conversely, in sectors where labor is expensive or scarce, automation could be a more attractive option.

Regulatory and social issues could also be factors. For example, many hospital patients may prefer a human nurse rather than a robot to care for them when they wake up after surgery. The acceptance of automation in certain roles is also influenced by societal norms and expectations.


The Impact of Automation on Various Jobs

Automation potential varies across different job types. Physical jobs in predictable environments, such as manufacturing and food service, are highly susceptible to automation. More than three-quarters of such activities could be automated already with today’s technology. Robots on factory floors already do repetitive tasks such as product assembly and packaging, while in food service, some restaurants are testing self-service ordering or even robotic servers.


Data collection and processing tasks, which constitute a significant portion of work across all occupations, are also likely to be automated. This could affect industries from retail to financial services and insurance. Workers won’t necessarily be out of the job, but their roles may very well change. For example, mortgage brokers who spend as much as 90% of their time processing applications could instead spend more time advising clients.


Even high-paying jobs involving data collection and processing are attractive for companies to automate. People whose annual incomes exceed $200,000 spend more than 30% of their time doing so. That makes activities in these jobs attractive for companies to automate.

However, activities requiring physical movement or operating machinery in unpredictable settings present a challenge for automation. Examples include operating a crane on a construction site, collecting trash in public areas, or making beds in hotel rooms. The unpredictability of these tasks makes it hard for a robot to carry out the service.


The Least Susceptible Sectors and the Future of Automation

Jobs involving managing and developing people, decision-making, planning, creative work, or interacting with stakeholders are the hardest to automate. These activities, where experience and age are often an asset, can be as varied as coding software, creating menus, writing promotional materials, or advising customers which color shoes best suit them.

Education is among the least susceptible sectors to automation. The essence of teaching includes deep expertise and complex interactions with other people for which machines, so far and with few exceptions, receive an incomplete grade.


Looking at the future, only about 5% of occupations could be fully automated by adapting current technology. However, today’s technologies could automate 45% of the activities people are paid to perform across all occupations. About 60% of all occupations could see 30% or more of their work activities automated.


Automation will fundamentally change the nature of organizations. The challenge for managers will be to identify where automation could transform their organizations, and then figure out where to unlock value, given the cost of replacing human labor with machines and the complexity of adapting business processes to a changed workplace.

Most benefits may come not from reducing labor costs but from raising productivity through fewer errors,

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