Survey suggests automation may lead to businesses reducing employee numbers
13 August 2015
Almost half (48%) of businesses in Ireland have either already automated business functions or are in the process of doing so according to data from the Grant Thornton International Business Report (IBR). This is slightly behind the global average of 55%. A further 24% of Irish businesses state that they may automate processes in the next 12 months.
These companies are principally looking for greater accuracy and efficiency in production (67%), and enhanced flexibility to increase or decrease production (50%). The findings suggest that some jobs will go as a result, with one in four businesses expecting automation will lead to a reduction in headcount, and with capital costs low as labour costs rise, the findings pose fundamental questions about the implications of advancing technologies on the workforce.
Globally, over half (56%) of firms surveyed told Grant Thornton they are either already automating business practices or may do over the next 12 months. By industry, 43% of manufacturing firms said they expect this to eventually replace at least 5% of their workforce. Cleantech was in second place on 39%, followed by the technology and food & beverage sectors on 35%. At the other end of the spectrum, just 9% of hospitality, education and healthcare firms expect 5% or more of workers to be replaced.
Fergus Condon, Partner and technology sector leader at Grant Thornton said: “In this digital age, businesses are looking to technology at an ever increasing pace. Post-financial crisis, firms continue to strive for greater efficiency and better productivity. With costs of capital low and labour costs increasing, as businesses consider whether to invest in staff or machines, for many, the latter is becoming the more cost-effective option.”
Further research conducted by Grant Thornton uncovered increasing business spend on research and development – underpinning the growth in automation. In 2011 19% of Irish businesses said they were planning to boost R&D spend and that increased to 23% in 2014, somewhat behind the global figure of 28%.
Fergus Condon added: “Technology is part of our lives in ways we couldn’t have imagined two decades ago, from the rise of big data to the app revolution. That trend will continue and it means the shape and size of workforces of the future will look radically different to those of today. How businesses and governments deal with these changes will be critical to long term economic growth prospects.
“While some job losses will occur as technological advances increasingly transform both the private and the public sector, technology will complement and enhance human capabilities, increasing both the quality and quantity of our efforts.”
Grant Thornton’s findings also suggest that opportunities will arise for workers to assume new roles and responsibilities created by an increased use of technology. Irish businesses that have automated functions expect to redeploy workers in other areas (58%).
Fergus Condon concluded: “History has proven that workforces are resilient and adaptable but the rise of intelligent technology, analytics and an ubiquitous 'internet of things' pose significant opportunities and challenges. No sector or profession is immune. Increased dialogue between governments, businesses and education institutions will help us better understand where gaps in the labour market will exist, to ensure we have a pipeline of people being educated and trained to fill those roles.”