• October 1, 2014
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Automation Creates More Jobs Than It Eliminates

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One in five U.S. companies (21 percent) have replaced employees with automation, according to research from CareerBuilder and Economic Modeling Specialists International. Among those companies with more than 500 employees, the number jumps to 30 percent. And the trend shows no signs of slowing. However, new data suggests that automation is not the job killer that many once thought.

CareerBuilder's research found that a vast majority (68 percent) of companies that have replaced workers with automation—a process known as deskilling—wound up adding new positions as a result. Thirty-five percent ended up with higher head counts and payrolls than they had prior to the automation.

The Pew Research Center found similar results in its "AI, Robotics, and the Future of Jobs" report. Humans, it states, adapt to changes by inventing new types of work that take advantage of uniquely human capabilities.

This is particularly true in the business intelligence space. The automation of data collection and reporting claimed its fair share of jobs: More than 43,000 data entry jobs paying $14 per hour on average were lost to automation from 2002 to 2014, representing a 16 percent decline. At the same time, demand for people who know how to interpret data and make it meaningful for organizations has skyrocketed. Data scientists and analysts accounted for more than 99,000 new jobs from 2002 to 2014, a 28 percent increase in a field paying $29.18 per hour on average.

"We're creating so much data—from consumer research to sales figures and everything in between—but just because you have the data doesn't mean you can use it. You need people who can interpret it and create a narrative around it," says Ryan Hunt, senior career advisor at CareerBuilder.

While this is bad news for data entry workers, it's a boon for data scientists, who either have advanced degrees or are pulled from related professions.

Data is not the only area where new jobs are being created. Since 2002, 257 occupations, roughly one-third of all U.S. jobs, experienced declines. At the same time, 483 occupations (61 percent) grew their workforces by 1 percent or more.

Hunt says automation is not unique to the United States. "Most modern economies have been having discussions about it," he states. In many parts of south and central Asia, it is still cheaper today to have people do the work, but that is likely to change quickly, Hunt expects. "Across Asia, labor costs are rising, and that makes automation more attractive," he says.

While automation can yield more jobs, it's not always the best move for organizations, as success is not guaranteed. Automation has produced greater efficiencies and output in some cases; however, eliminating the human factor has backfired in others. In fact, 35 percent of firms that deskilled workers rehired people because the technology didn't work out, according to the research.

This is especially true in retail, where many stores that put in self-checkout technologies have started to bring back human cashiers, Hunt maintains. It can also be seen in customer service, where there has been a consumer backlash against impersonal interactive voice response systems for some transactions.

"It's not surprising that some brands are doing away with automation," Hunt says. "It all comes back to people. It speaks to consumer preferences."

Automation, he adds, is never—and should never be—an easy decision. "You need to look at the technology and solutions available and ask yourself whether the gains in productivity will be worth it at the end of the day. You have to look at the desired outcome. It's a tough call to make."

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