Workforce Planning in the Automation Era

The much-awaited year 2020 is here! This year is expected to unfold innovative technologies and exciting new possibilities. As we prepare ourselves for the next decade, it is vital to assess the impact of automation on our workforce and align ourselves to meet the challenges of the future.

If a business has to stay competitive in the automation age, it is imperative that it prepares its workforce for some drastic organizational changes. For building a workforce of the future, there will be a stress on continuous learning by the team members and increased need for cross-functional team-based work.

Before we dig deeper into how the workforce skills need to change in the automation era, let us first understand the impact of automation on work in the coming years.

Job automation is being used extensively. Job automation is replacing human labor in the workplace with computer-controlled devices. Artificial Intelligence (AI) and Machine Learning (ML) have now made it possible to now carry out tasks without human intervention. As a result, every year a great number of medium-skilled manufacturing and office jobs are being lost to machines.

We can safely say that the automation era is reshaping the workplace!

According to a study by McKinsey Global Institute, 375 million jobs could be lost to automation by 2030!

Although it may appear that automation is only going to take away jobs, some stats reveal otherwise. AI will produce 2.3 million jobs in the US in 2020. (Source: Gartner).

The fact remains that while each leap in AI, robotics, and other technologies threatens jobs of millions of human workers, it creates new opportunities in yet to exist industries. The value brought by these innovations is capable of offsetting the disruption caused by them.

There is a need now more than ever for the workforce to change their occupational groups, acquire new skills, and expand their knowledge on important subjects to stay relevant in current times.

Let us now delve into how the demand for workforce skills will change with automation:

• According to research by McKinsey, the strongest demand in growth will be required in technological skills. It is expected to increase by 56% by 2030 which will constitute 17% of the total hours worked.
• This will lead to increased demand for basic digital skills and technical skills such as programming.
• There will be an increase in the demand for leadership skills and managing others.
• There will be a moderate demand for cognitive skills. But, skills such as creativity will be in great demand.
• Certain cognitive skills will be low in demand. Some of these will be skills such as data input and processing, demand for operating general equipment.
• The demand for different skill sets will also depend on the sector. For instance, the manufacturing sector will have more automation and less need for human labor while the healthcare sector will have an increased need for physical skills.

Let us now dig a little deeper into shifting skill requirement in five major sectors:

1. Banking and Insurance

Services such as banking and insurance have been at the forefront of the adoption of AI and robotic process automation. AI has made inroads in areas such as data processing and collection, underwriting, etc. AI can enhance the quality in areas such as predicting customer demand, risk assessment, and many more.

The shift that is expected in the banking and insurance sector is that there will be a greater need for technology professionals and customer-interfacing roles will grow. On the other hand, we will see a decline in jobs such as tellers, financial analysts, brokerage clerks, etc.

In this sector, there will be greater demand for emotional and social skills.

2. Energy and Mining

Automation has already impacted the mining and energy sector by enabling mining companies to enhance the efficiency of extraction, tap new reserves, besides optimizing energy and material flow. AI is expected to bring about further improvements such as accurate demand forecasts, automated extraction, and many more.

With more processes getting automated in this sector, routine manual jobs such as drivers and field operators and administrative jobs such as meter readers, etc. are likely to get displaced.

The demand for basic cognitive skills is likely to reduce while there will be an increased demand for higher cognitive skills. The energy and mining sector will need social, emotional, and technological skills.

3. Healthcare

The demand for healthcare is expected to grow in the future. Automation and AI will have a significant role to play in the healthcare sector, enhancing the quality and efficiency of the medical care provided. Automation in healthcare will enable patient co-management, real-time analytics and advanced methods of treatment.

In the healthcare sector, we will see an increased demand for care providers such as nurses while there will be a decline in the demand for support staff.

Demand for skills such as advanced IT skills, basic digital skills, entrepreneurship, and creativity will witness high growth.

Healthcare is one of the sectors where there will be a great demand for physical and manual skills. These skills will be required in areas such as taking care of the elderly, physical therapy, fine motor skills for inserting IVs and for surgeons and doctors.

4. Manufacturing

AI in manufacturing is expected to disrupt manufacturing functions in factories through better analytics, predictive maintenance, and increased human-machine collaboration. Besides, AI will impact sales and marketing, product development, etc. as well.

In the manufacturing sector, there will be a decreased demand for physical and manual skills. This is because most support, administrative, and repetitive tasks will be automated.

The demand in this sector will shift towards the need for sales representatives, engineers, product technicians, etc. There will be a need for social, economical and higher-cognitive skills such as communication, negotiation, adaptability, continuous learning and leadership. There will also be a requirement for basic digital skills for technicians and advanced IT skills for technology professionals.

5. Retail

This sector will experience major changes because of automation. We are already living in the era when e-commerce stores are replacing the traditional brick and mortar stores. AI and smart automation are set to transform the retail experience in more ways than one.

There will be self-checkout machines replacing cashiers, robots restocking shelves, ML predicting customer demands.

The demand for physical and manual skills will decline. For instance, in the automation era, there may be no jobs for drivers, packers, and shelf stockers, etc. However, there will be a demand for workers with good interpersonal skills, creativity, and adaptability.

The growth of new technologies will create a demand for advanced IT and programming skills.

As can be seen, the skill sets required in the automation era across various sectors will be higher cognitive skills, social and emotional skills, and advanced technological skills.

How can organizations adapt and build a workforce of the future?

• Organizations need to adapt to this shift in the skill set required for the automation era. The transformation should start right from the leadership. There needs to be a change in culture. Organizations need to provide continuous learning options to employees and instill a lifelong learning culture.
• In the automation era, there will be a need to hire individuals with the right skill set. The hiring process should include tests to check if the individual has the right cognitive skills and can learn continuously and adapt to evolving technologies. The team members hired should be able to work in teams.
• As far as the existing employees are concerned, they should be trained to acquire the required technical and cognitive skills. The training can be through in-house training programs or it can be outsourced to external agencies.
• The work processes need to be redesigned to meet current and future demands. Tasks can be unbundled within a job and re-bundled in different ways. Individuals with specific skill sets can be redeployed so that their skills are used effectively.
• Outsourcing tasks to outside agencies, also known as contracting, is already being used. This is a simple way to engage specialists to work for your organization. As automation becomes more dominant in the future, we will find more companies hiring freelancers, contractors, etc. from staffing agencies.
• To cope with increased automation, we will witness layoffs becoming more common. Layoffs will be significant in organizations where automation will be used to replace labor. However, it will occur in other organizations as well. Layoffs will accelerate the transformation process. But it can demotivate the existing employees.

With man and machine collaborating to deliver the output in an organization, there is a need for a new approach to workforce planning that clearly defines individual roles and the process of how results are achieved.

In the automation era, the workforce is not limited to just humans. We have entities such as robots, chatbots, and other automated technologies that are redefining the workspace. Therefore, a strategic outlook is imperative for workforce planning.

Strategic workforce planning helps organizations strike the right balance between external contractors, internal workforce and define the right blend of man and machine effort to achieve the organizational goals.

Strategic workforce planning entails:

• Estimating future demands.
• Analyzing the impact of those demands on the existing workforce.
• Assessing how the existing workforce can fulfill future demands without affecting the current goals.
• Workforce forecasting to achieve future goals.
• After assessing the workforce required to achieve the goals, analysis of how the existing workforce can be redeployed is done.
• Assessment of training needs of the existing workforce is carried out.
• An analysis of how the existing human-machine blend is suited to deliver future demands is conducted.
• If there is any shortage, new employees, freelancers, contractors, etc. are hired or machines purchased.

The Bottomline

The automation age is set to transform the work culture in existing organizations. There is a need for organizations to adapt to the needs of the automation age. Organizations need an agile approach that leverages a blend of humans and machines to march ahead in the automation era.