Addressing Labor Shortages with Automation

Thoughts on topic, but how can they be applied?

Addressing Labor Shortages with Automation  By Logan Kugler

Communications of the ACM, June 2022, Vol. 65 No. 6, Pages 21-23 10.1145/3530687

U..S. employment statistics hit a new milestone last year, but not a positive one. In August 2021, almost 4.3 million workers quit their jobs, according to the U.S. Department of Labor. That's the highest number since the department began tracking voluntary resignations. Their reasons for leaving their jobs vary—the numbers track people who quit for a different position, as well as those who quit without having another job lined up.

While the reasons for quitting vary, one thing is clear: Businesses are having a tough time getting employees to come back. A full 80% of companies surveyed by the Conference Board, a business research nonprofit, say they are now finding it difficult to hire qualified workers.

This is a win for worker wages. Additional Conference Board research predicts U.S. wage costs for companies will rise 3.9% in 2022, the highest jump since 2008. In the U.K., the National Institute of Economic and Social Research expects average weekly earnings growth to jump 5.9% in 2021, compared with 1.8% in 2020. However, the growth in wages may not last.

The labor shortage, combined with wages increasing to try to attract new employees and keep those they have, have led many businesses to accelerate plans to adopt automation technologies like robots and smarter software. Such adoption is happening across industries like manufacturing, the service industry, and administrative work. It is unclear if this automation will alleviate a permanent shortage of workers who no longer want this type of work—or if it will permanently eliminate jobs that may be in future demand.

The recent surge in demand for automation started out as a temporary necessity, says Gad Levanon, vice president of Labor Markets at the Conference Board and founder of the organization's Labor Market Institute.

Many companies had to limit human interactions in order to comply with public health regulations during the pandemic. Using automation to take services online or rollout self-service options was the only way for some companies to keep doing business legally. However, as businesses reopen, many now see automation as a sensible permanent solution to the labor shortfall they now face.

"After massive layoffs during the early months of the pandemic, some have learned to operate with fewer workers by using more automation and other process improvements," says the Conference Board's Levanon says. "2021's severe labor shortage and accelerating wages may incentivize other employers to do the same."  .... '