Automation and AI: how it will actually affect the workplace

Unexpected item in bagging area: how is automation affecting the labour market? Image edited from Shutterstock

Is there any consensus on the impact of automation and artificial intelligence on our working lives? Will society benefit or suffer? How will HR play its part in reshaping the workforce? Adam McCulloch examines the impact on jobs and people management.

A blasé optimism pervades the burgeoning automation revolution. More jobs, not fewer, will be the result and a happier workforce, freed from drudgery, will be able to pursue more meaningful activities – whatever those may be. But many employees will inevitably be left fearful for their job’s survival.

A PwC study estimated that UK GDP could be up to 10% higher in 2030 due to artificial intelligence (AI) technology – equivalent to an additional £232bn.

But the optimists might be in for a shock. As KPMG states in its report Rise of the Humans 3, there is no clear consensus over how automation will impact society and the economy: “In any sector you care to name … predictable planning horizons are collapsing with alarming speed and as they do, even the experts cannot agree on AI’s ultimate workforce impact.

“Some predict jobs will multiply following a disruptive transition period. Others foresee a net loss of jobs to the economy and warn of the need to explore policy solutions such as a universal basic income or a reduced working week.”

Among those “others” are the unions. In its A Future that Works for Working People report, the TUC laments the lack of progress towards a shorter working week, noting that economist John Maynard Keynes, almost 90 years ago, suggested we’d be working 15 hours a week by now. And this summer, the Institute for Public Policy Research urged the government to take a role in shaping how automation transforms work, warning that without intervention it could exacerbate age and gender inequalities.

Terminology

Automation covers all the processes being discussed here, including machine learning which is a subset of artificial intelligence (AI). Robotic process automation (RPA) is the most widely adopted of these technologies, which is regarded as white collar automation. It will account for many jobs in the future. It is this type of automation that is beginning to carry out many tasks in HR departments.

The think tank’s chief economist Carys Roberts warned that “technology is not destiny” and that “a more gender-equal future will not happen spontaneously. Realising this opportunity will require a managed acceleration of automation, led by those who could be affected by it.”

The TUC’s position echoes that of the IPPR: technological change has the potential to make the UK significantly better off but without regulation, workers will lose out. The union fears that technology is being used not to free people from monotonous tasks and reduce hours, but to monitor and control them.

It argues for organisations to gain workers’ consent over the use of technology, for training to be provided for those at risk of losing their jobs and for productivity gains to be shared with employees.

There is also a concern that automation will lead to an ever-faster expansion of the gig economy. As job boundaries and functions blur and become “atomised”, people will find themselves working in increasingly different contexts under a self-employed model. Gartner’s Brian Kropp (see box below) does not share this view, however.

UK not the quickest

Despite this concern, some sectors in the UK are still to fully embrace these technologies. Manufacturing companies often still prefer to use cheaper labour from EU countries rather than invest in robot technology, so-called blue-collar automation. People are often employed to do repetitive, sometimes dangerous, tasks on ageing machinery that could be replaced by robots if there were greater incentives to move away from physical labour.

There is a strong risk that automation will worsen inequalities. Higher educated, more skilled employees are most likely to benefit from these technological changes” – Brian Kropp, Gartner

Chairman of the British Automation and Robot Association Mike Wilson has warned that the UK, traditionally a slow adopter of robotics in manufacturing, still “isn’t using this technology today in the same way as our major competitors overseas”. Outside the automotive sector, Germany has 191 robots per 10,000 workers, while the UK has only 42.

Of course, individual organisations have their own investment priorities and arguably the UK’s services economy has leapt ahead, with the financial sector in the vanguard. These companies, however, are deploying white-collar automation, or robotic process automation.

Back in the blue-collar world, Wilson sees the UK’s lack of automation as one of the key reasons for its low productivity. The key cause, he adds, is lack of investment and an over-reliance by manufacturing on human labour. “In many cases, these people are performing repetitive, mundane or dirty and dangerous tasks better suited to robots. These are the sorts of job that people shouldn’t be doing. They should be using their skills to add value.”

But falling unemployment, the loss of European workers through Brexit and the ever-falling pound means it is likely UK firms may no longer have a choice to opt for human labour. “We’ll have no option other than to look at increasing the levels of automation to get the work done,” says Wilson. Faced with the conservatism and fear of investment surrounding Brexit however, this is unlikely to happen soon.

As Tej Parikh, chief economist at the Institute of Directors, recently told The Independent: “With investment in machinery and technology often deemed too risky right now, businesses have sought to bring on board more staff to help lift output.”

I don’t think HR is particularly evidence-based – it doesn’t go into the data in the way it should do. We have a term – ’workforce shaping’ – it just seems the HR function doesn’t feel comfortable initiating conversation on this” – Robert Bolton, KPMG

Wilson looks at automation more optimistically: “While we do see the occasional localised instances of an individual being replaced by a machine, the figures show the businesses that adopt the technology become more productive, more profitable and ultimately end up employing more people,” he says.

But do companies really automate in order to employ more people, or is that just an unintended consequence of automation?

Who will benefit?

Nello Cristianini, professor of artificial intelligence at the University of Bristol, believes that people have every right to be worried about jobs. He tells Personnel Today that companies will certainly benefit from automation but “let us keep in mind that – whatever anyone says – the key goal of automation is to replace people”.

“Often, though not always, companies benefit from automation because this allows them to save money by reducing the number of people. All this is clear. What are the benefits for customers and society? I would accept that certain services can become cheaper.”

Cost savings, ethics and equality

Brian Kropp, group vice president, Gartner HR, answers some of the key questions on our readiness for the rise of automation.

Cristianini continues: “My impression is that workers displaced by automatic check-outs in supermarkets and automated check-ins at airports will not necessarily be better off, unless we do something to mitigate the disruption.

“Notice incidentally that those two examples are actually closer to self-service than to automation. It is not clear that customers benefit either, except perhaps through lower costs.

“So, how much are we prepared to pay as customers in order to have a human on the phone, at the check-in desk, at the check-out till?”

For Cristianini, the drive to automate needs to be better understood and will not necessarily lead to better services. “I do not think this is the main driver behind much of the current push to automate. We do not automate translation to have better translations. We do it to save money. Will workers be better off – will consumers?”

Where does HR sit?

Cristianini’s views reflect a marked divergence among business leaders over AI’s impact. According to KPMG, 60% of HR leaders believe AI will lead to fewer jobs, whereas 62% of chief executives say it creates more jobs than it eliminates.

For Robert Bolton, who heads KPMG’s Global People and Change Centre of Excellence, the changes that will be wrought by AI will have “more impact than Brexit”.

However, his concern is that HR is not in the driving seat. “It’s CEOs and CIOs that are leading the agenda on workforce transformation. There are now CIOs saying they want to take over the people function – they don’t see HR meeting the challenge.”

So why does HR lack vision on the issue? “I don’t think HR is particularly evidence-based – it doesn’t go into the data in the way it should do. We have a term – ’workforce shaping’ – it just seems the HR function doesn’t feel comfortable initiating a conversation on this. HR is still obsessed with talent management – the streaming and classification of people.

“HR is too focused on individuals at the expense of the strategic whole,” says Bolton. “HR needs to take a front-seat position and it must do so quickly to avoid becoming irrelevant. They need to reshape organisations; they must redraw the boundaries between various types of job.”

Here, the buzz phrase is “job atomisation”, the breaking up of jobs into smaller component responsibilities. This makes it possible for organisations to radically transform job functions and processes.

Jobs with arms and legs

“If organisations want to achieve productivity gains from deploying AI, they need to reorganise work at the task level, otherwise it will have a fractional ‘arms-and-legs’ impact from AI, which likely won’t deliver productivity gains,” explains Bolton.

KPMG’s work with insurance firms provides an example of these shifting boundaries between roles: traditional underwriting has been highly automated by AI but a new role has emerged as a result embracing both underwriting and adjacent disciplines such as risk consulting and product development.

In engineering, AI has seen new disciplines emerge such as engineering information integration, which draws on a systems-thinking mindset not covered as yet by engineer training.

AI and automation optimists argue that these examples show how jobs will be affected in a positive light: tasks will disappear from job descriptions allowing more time for research and creative, customer-focused work.

Wiltshire Council, for example, recently introduced a virtual assistant to run a series of monthly reports for each of the local authority’s 43 payrolls.

This used to require a significant amount of repetitive keying for staff, taking up one-two days per month. The virtual assistant, Wiltshire claims, completes the process in just over an hour, reducing bottlenecks, creating a more resilient process, freeing up staff time and allowing it to take on more payrolls, which supports its commercial agenda. 

But where does this leave the payroll staff? “This is just part of their job,” says communications officer Richard Perrett. “They now have more capacity to take on other tasks and projects to improve the service and support our commercial agenda.”

The council plans to introduce similar systems across all areas of operation where there are high-volume, rule-based repetitive tasks, and other councils may soon follow suit.

Freeing-up time – for what?

“Freeing-up staff time” sounds positive. But are we ready and do we want to be freed up?

For Henry Parkes, senior economist at IPPR, the fact that many jobs identified by the think tank’s report have “high potential” for automation doesn’t mean the jobs will disappear.

He tells Personnel Today: “Bar work, for example, has high potential for automation, but are people ready to be served by robots? What new technology means is that bar tenders can serve more people thanks to contactless payments, pints that fill from the bottom of the glass, facial recognition to cut down queuing, remote ordering … partial automation is far more likely than full automation.

“Perhaps, because hospitality is a fast-growing industry, automation will allow bar staff to spend more time on preparing better and more complex cocktails, interact with and even entertain customers.”

Dan Pitchford, founder of AI Business, is firmly in the optimist camp, but concedes there might be some impact on jobs. “Fears over entry-level jobs are not totally irrational,” he says, “but AI will have overall a seismic impact on young people. Rather than creating fewer graduate or starter roles, it’s likely that instead, AI will simply change the type of jobs that exist. 

Let us keep in mind that – whatever anyone says – the key goal of automation is to replace people” – Nello Cristianini, professor of artificial intelligence

“Enhanced induction programmes will provide graduates with an opportunity to jump a step on the training ladder, beneficial not only for graduates, but also for their new employers. Graduate programmes will change in their fundamental purpose because of the types of roles that will become commonplace across the UK’s job market. More AI-centric graduate schemes will emerge, a hugely exciting prospect for the younger, tech-literate generation.” 

Entry level roles and young people

Pitchford says that younger people, automation and AI present exciting future career opportunities, rather than represent any kind of barrier. “Young people are in a powerful position to enter the workforce with new skills, having trained in AI and data science,” he says. 

A schools-based career adviser in south London supports the idea that young people are seeing the new technology as an opportunity, not a threat. She says: “The A-level aged students who are confident in maths and physics want to get into AI and robotics and are doing computer sciences. The younger ones, 15-year-olds, tend to say they want to do it because their mums and dads have told them it’s a good thing to get into.” She adds that this is less so among girls than boys, however.

Does this mean AI will exacerbate existing gender and wealth gaps? Pitchford believes not. “As AI advances, new roles will be created across corporations without any gendered legacy,” he says.

“The marketing industry is one of the biggest adopters of AI, and has long been criticised for the lack of balance in senior roles for women. I predict AI will have a transformative effect, as parts of more junior roles are automated, opening the playing field for the most skilled candidates regardless of their gender.”

Ethical dimension

Where employers do decide to invest in AI, they must also consider the ethical dimension of the technology so workers and clients are not left bewildered and powerless. And this is an area where many believe HR can truly make its presence felt.

Last month’s CBI report calls for organisations to consider creating new principles and frameworks if AI does not fit into their existing governance systems. Human oversight of AI systems must be introduced and all stakeholders need to be informed when algorithms are making decisions with details of what factors went into creating the algorithms, the business body argues. Additionally, tools must be used to test algorithms for unfair and unconscious bias – an area explored by Jonathan Rennie of law firm TLT on Personnel Today recently.

I predict AI will have a transformative effect, as parts of more junior roles are automated, opening the playing field for the most skilled candidates regardless of their gender” – Dan Pitchford, AI Business

HR will have a leading role in preparing for what the CBI calls “an environment that is rapidly changing and embrace a culture of lifelong learning and embed upskilling”. In his article for Personnel Today Alan Bourne at Sova says: “By using AI and machine learning in the HR processes, HR departments can get a sense of how to make the technology work for them, and how to ensure it’s fair, responsible and ethical applied across the organisation.”

The need for such an ethical dimension shows that perhaps technology is developing more quickly than our understanding of how it will change us. The situation is summed up succinctly by Oxford Economics, in its recent report: “AI and supporting technologies are widely seen as a strategic investment across industries and around the world – yet most organisations are not ready to prepare their employees and their customers for what comes next.”

So employees’ nagging question remains: “What about my job?”

HR Director opportunities on Personnel Today


Browse more HR director jobs

No comments yet.

Leave a Reply