Employers Set to Increase Headcount Due to Automation

Do you think the ascent of robots means there will be less of a need for people? Think again. As companies go digital, most will require more people, not fewer. Combining both technical and soft skills will be the best hedge against technology’s effect on organizations, says a new ManpowerGroup report. Let’s examine the latest findings as top search consultants weigh in.

January 24, 2019 – It is no secret that many people worry about robot workers replacing human jobs. In reality, however, the opposite looks true.

ManpowerGroup‘s latest report, “Humans Wanted: Robots Need You,” found that more employers than ever — 87 percent — plan to increase or maintain headcount as a result of automation for the third consecutive year.

ManpowerGroup surveyed 19,000 employers in 44 countries on the impact of automation on job growth in the next two years.

Companies that are digitizing are growing, and that growth is producing more and new kinds of jobs, said ManpowerGroup. Organizations that are already automating tasks and progressing their digital transformation are most confident of increasing headcount. Global talent shortages are at a 12-year high and new skills are appearing as fast as others disappear, said the study. More companies are planning to build talent than ever before, and this trend shows no sign of slowing. Eighty-four percent of employers plan to upskill their workforce by 2020.

“The focus on robots eliminating jobs is distracting us from the real issue,” said Jonas Prising, chairman and CEO of ManpowerGroup. “More and more robots are being added to the workforce, but humans are too. Tech is here to stay and it’s our responsibility as leaders to become chief learning officers and work out how we integrate humans with machines. Learning today cannot be done as it was in the past.”

Related: Human Strengths the Solution to Challenges of the Skills

“That’s why at ManpowerGroup we’re reskilling people from declining industries like textiles for jobs in high growth industries including cyber security, advanced manufacturing and autonomous driving,” he said. “If we focus on practical steps to upskill people at speed and at scale, organizations and individuals really can befriend the machines.”

The ManpowerGroup report also found that demand for IT skills is growing significantly and with speed: 16 percent of companies expect to increase headcount in IT, five times more than those expecting a decrease. Production and manufacturing employers anticipate the most change in headcount, with 25 percent saying they will employ more people in the next year, while 20 percent said they will employ less.

Growth will come in front line and customer facing roles too – all requiring human skills such as communication, negotiation, leadership and adaptability.

Human Skills

Demand for tech and digital skills is growing across all functions yet employers place increasing value on human skills as automation scales and machines prove better at routine tasks, the report found.

While 38 percent of organizations said it is difficult to train in-demand technical skills, 43 percent said it is even harder to teach the soft skills they need, such as analytical thinking and communication. Candidates who can demonstrate higher cognitive skills, creativity and the ability to process complex information, together with adaptability and likeability, can expect greater success throughout their careers, said the report. By 2030, demand for human skills – social and emotional soft skills – is expected to grow across all industries by 26 percent in the U.S. and by 22 percent in Europe.

Related: CEOs See More Value In Technology Than People

The ManpowerGroup report also discovered that by 2022, over half (54 percent) of all employees will require significant reskilling and upskilling. Of these, about 35 percent are expected to require training of up to six months, nine percent will take six to 12 months to reskill and 10 percent will require additional skills training of more than a year. Learning will be essential.

HR’s Role

“The role of HR needs to continue to evolve to help organizations drive growth and profitability,” Mara Swan, EVP of global strategy and talent, ManpowerGroup. “We need a new talent strategy to help all companies integrate automation with human skills. Companies need to be able to adapt to quicker talent cycles than they have done in the past. They need to create agile teams, multi-functional and multi-skilled – similar to how many IT departments already work.”

 Want to Enhance Employability? Refresh Your Skills
Ninety percent of global respondents to a recent Randstad Workmonitor survey said that regularly refreshing skills and competencies will enhance employability. Seventy one percent, in fact, reported that they have done so within the past year.

Companies must use quality assessments and data to predict performance and have full transparency of people’s capabilities, she said. That is how hiring managers can come to know an individual’s skills, strengths and styles, beyond just the manager-worker perspective. “And that’s how they can know where to move talent around so people can perform to their potential,” said Ms. Swan. “People will need to do new work with new skills. This will require continuous learning and it’s why learnability – the desire and ability to continually develop one’s skills – is so important. People with high learnability will be able to develop in-demand skills, while those without will need to be developed in their job or helped to move elsewhere.”

Search Consultants Weigh In

“Manpower’s survey on overall employment and opportunities increasing, even in companies that are employing more automation, is counter intuitive and fascinating,” said Matt Slepin, founder and managing partner of Terra Search Partners in San Francisco. “But it makes sense – the companies that are investing the most in automation are also the companies that are growing and expanding the human knowledge workers who know how to manage and leverage off of the machines.”

“But I bet this means more good jobs and more compensation for knowledge workers and maybe at the same time increasingly menial jobs and limits on compensation for the untrained/unskilled workers,” he said. “All of this has big, and differing, ripple effects for the different sectors of real estate, from homebuilding to office properties to apartments to retail to industrial and each of our niche businesses.”

Shawn Baker, president of Rochester, NY-headquartered executive recruiting firm Cochran, Cochran & Yale,  said that the initial fear about the “age of automation” stemmed from anxiety that machines would replace workers. “But in my opinion, that fear is misplaced,” he said. “The real paradigm shift we’ve witnessed is in the experience most desired by employers.”

Related: Recruiters Now Balancing Technology and Human Touch

“Skills that are easily automated have been devalued, while the skills required to operate in an automated environment – such as tech savvy –have become requirements,” Mr. Baker said. “Employees have to be willing to evolve and expand their abilities at the same rate technology evolves in order to stay competitive.”

“Sure, in a perfect world, no one will lose their jobs to automation,” said Charlie Laurer, vice president of Ascend Executive Search in Webster, NY. “The (ManpowerGroup) article purports that the majority of the current workforce will be ‘upskilled’ (hundreds of hours in hands-on training, coursework, certifications, degrees and so forth) at the expense of the companies. This would have a serious impact on the bottom line of an organization which, in this case, is also pouring significant resources into automation systems and equipment.”

Recruiters Face a Double Threat from Automation, But There’s Good News
Automation is already heavily impacting many jobs, especially those in manufacturing and agriculture. Of five million manufacturing jobs lost since 2000, machines have replaced 4.4 million of them.

“In addition, even if the current workforce can be retained and retrained, the company will still need to hire new top-tier automation experts – and they don’t come cheap,” Mr. Laurer said. “This can certainly all be done, but the question is why are companies shifting towards automation? Is it to save money in the long run? If so, how will that money be saved?”

“We think it’s safe to assume that much of these savings will be attained via reduced labor costs,” he said. “How are companies saving money through reduced labor costs when they now have a same-sized, yet newly ‘upskilled’ (more expensive) workforce, along with new tech-savvy automation experts on their payroll? That is a question that has yet to be answered in our humble opinion.”

Related: Here’s How AI is Changing How We Recruit Top Leaders

Assuming that automation leads to the singular outcome of massive job losses operates from a historically false premise, said Andy Knox, managing director of Los Angeles-based executive recruitment firm Chelsea Partners. “While some job types and verticals will be disproportionately impacted by automation in the short-term and are better performed by automation, it is unlikely that these disruptions will be permanent,” he said.

“Similar fears of permanent economic ruin were raised when the first integrated textile mill was introduced in 1814 and Henry Ford introduced the Model T in 1908,” Mr. Knox said. “Rather than decimate the textile and transportation industries, each was reborn with stronger underlying fundamentals and required both a higher quantity, but more importantly, higher quality of worker. There are countless other and similar examples through the past century.”

“It is reasonable to assume that we will experience a similar dynamic, as increased automation and technological advancement, including AI, changing demographics and the emergence of new industries and technologies will place short and medium term strains on all segments of the economy, from education to government to the corporate sector, to better prepare workers for the economy of the future,” Mr. Knox added. “Employers will have to be increasingly willing and able to contribute to the education and training needed to produce the employees that they require. Employees will have to focus on being employable through continuing education and training to keep current with ever shortening product, service and technology life cycles, especially in a global labor market.”

Related: Artificial Intelligence is Writing a New Script for the Recruiting Industry

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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