Why Automation Doesn’t Mean A Smaller Workforce

Why Automation Doesn’t Mean A Smaller Workforce

Tom Friedman in his latest book spotlights a counter-intuitive phenomenon that all entrepreneurs need to understand. Leaning heavily on the work of James Bessen, researcher and lecturer at Boston University School of Law since 2004, Tom highlights the following conclusions:

  • ATMs did not kill tellers work, since 2000 the number of full time equivalent bank tellers has increased 2% per annum, substantially faster than the entire labor force ( branch costs lowered, more branches were opened, teller skills changed).
  • Barcode scanners reduced cashiers checkout times by 18-19% but the number of cashiers has grown since the deployment of scanners in the 1980s.
  • Electronic document discovery has emerged as a billion dollar industry but paralegal numbers have grown robustly.
  • Answering the phone was a human activity that created massive employment, but was replaced by technology. The number of receptionists has grown from 438,000 in 1980 to 896,000 today.

As you scale your business, consider the consequences of your technology investments and how your talent pool could adapt to leverage that investment rather than be a victim of it. Looking across your business, the operational implications are as follows:

  • Automation of a quality sales process allows world class sales professionals to build deeper personal relationships with their customers, leading to deep insights and a more precise and relevant conversation. That will always generate higher sales.
  • Automation of forecasting models generates a safer business and frees up precious time for your accountants to understand the real story behind the numbers.
  • Automation of a recruitment process will get you to more relevant candidates faster and ultimately lead to a stronger team.
  • Automation of your new product innovation program will keep you relevant to the market and continually competitive in a fast changing world.

Automation allows you to improve the outcomes for your customers, quicker and at better margins if implemented with all stakeholders in mind. Automation as a labor reduction initiative is probably flawed.

Happy 4th everyone.

TPP ian operational consultancy that scales businesses organically and by acquisition. Working on the right stuff is a game changer. 

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