Workplace automation to surge over next three years

Very few HR functions are fully prepared to address the organisational change requirements related to automation

BY HRD 05 Mar 2018

Management and leadership development will be a critical issue for companies of all sizes over the next three years, according to Hamish Deery, head of talent and rewards at Willis Towers Watson Australia.

“We know strong leadership is a key driver of employee engagement, culture and retention. But in the face of rapidly changing work automation and increasing use of contingent talent, companies will need to develop leaders and managers differently,” said Deery.

“They will need to orchestrate a radically different work ecosystem, imbed and drive a culture that supports the business strategy, and keep all of the talent in their workplaces fully engaged – whether employed or contingent.”

Deery’s comments come following new research by Willis Towers Watson which found that workplace automation (including the use of artificial intelligence and robotics) is expected to surge in the next three years.

However, the survey also revealed very few HR functions are fully prepared to address the organisational change requirements related to automation, nor the opportunities offered by a larger contingent talent pool.

The Global Future of Work Survey found that Asia Pacific companies expect automation will account for on average 23% of work being done in the next three years.

That compares with 13% of work companies say is being done using AI and robotics today, and just 7% three years ago. Among companies that are already using AI and robotics, 85% will expand their use of automation in the next three years.

Adam Hall, Future of Work Leader Australia at Willis Towers Watson, said workplace automation is gaining momentum in Asia Pacific, with signs that it will only increase in the future.

“Importantly, the business drivers are mainly related to augmenting human performance, not replacing it," he said.

"The benefits of automation are expected to come primarily from greater workforce and workplace flexibility, work design, and reduced costs.

“There is also a reality that the balance of skills and work will shift. Roughly half of employers throughout the Asia-Pacific region in our survey (48%) believe they will require fewer employees in the next three years as a result of automation compared with 20% of organisations who say that is true today.”

Hall also noted that although many organisations recognise the need for innovative approaches to the future of work, the survey also revealed a major red flag around employer readiness.

He said that “along with the growing use of AI, robotics, free agent workers, contractors, consultants and part-time employees come a myriad of people challenges that very few business are fully prepared to tackle.”

Indeed, according to the survey, less than 5% of companies believe their HR functions are fully prepared for the changing requirements of digitalisation, although about a quarter are “somewhat prepared” and have already taken some action.

For example, 24% of companies have taken steps to address talent deficits through workforce planning; 26% have identified the emerging skills required for their business; 26% have matched talent to new work requirements, and 26% have defined and enabled careers based on a more agile and flattened organisational structure. Many employers are also planning to reconfigure total rewards and benefits to fit a radically different workforce (55%).

Many Asia Pacific companies plan to change the way they design jobs and their future use of “non-employee” talent as a result of automation. For example, many are planning to deconstruct jobs into their component tasks and identify tasks that can be automated (52%).

A cost advantage may follow, depending on how those roles are reconfigured. Approximately half of the respondents (49%) expect to redesign jobs so that they require fewer human skills in the next three years. Moreover, only around half also plan to reskill those whose work is being changed (51%).

Employers using automation to gain work flexibility are also expected to increase. Only 20% of the respondents currently use automation as an enabler for greater use of non-employee talent, such as free agents or contractors, but 58% expect that to be the case in the next three years.

Most companies believe automation will have a significant impact on leaders and managers in the next three years, particularly how supervisors manage their people through the impact of automation on their jobs (34% see this capability today vs. 62% in 2020).

More than half (56%) believe leaders will need to think differently about the requirements and skills for successors and succession management as a result of automation.