How is Automation Impacting the Labor Shortage? - A Business Blog Article from KLR

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How is Automation Impacting the Labor Shortage?

posted Jun 20, 2019 by Paul Oliveira, CPA in the Business Blog

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According to a recent study, the labor shortage and skills gap in manufacturing may leave approximately 2.4 million positions unfilled between now and 2028. While the industry is experiencing a great deal of growth (the highest in decades as a matter of fact), manufacturers are struggling to keep up with the resulting rebound in job growth. Here’s how businesses are coping.

What is the cause of the labor shortage?

According to the study, 5 out of 10 open positions for skilled workers remain unoccupied because of the skills gap (positions require specific training or skillsets). As a result, positions often take months to fill.

How are manufacturers addressing the shortage?

There are a few tactics manufacturers are implementing including offering apprenticeship opportunities through partnerships with vocational schools and offering incentives to retirement aged workers. Other companies have offered higher pay to skilled workers.

Where automation comes in

First of all, what exactly is automation? Automation is the use of electronics, computer-controlled devices, and sometimes robots to take over the control of processes. The goal of automation is to reduce human intervention in certain parts of the production process, thus saving time, money and manpower.

With the labor shortage, many manufacturers are turning to machines to supplement human jobs that are going unfilled.

How are companies implementing automation?

Automation in manufacturing can be found in the form of….

  • Robotic arms on production lines- Often described as a mechanical arm, a robotic arm is a device that operates in a similar way to a human arm, with a number of joints that either move along an axis or can rotate in certain directions. In most cases, robotic arms are programmable and used to perform specific tasks, most commonly for manufacturing, fabrication, and industrial applications. Robotic arms help undertake the monotonous tasks, improve speed and process quality, all while reducing the risk of injury associated with working too closely to heavy machinery.
  • “Cobots” that assist humans in manual tasks- A cobot, or collaborative robot, is a robot designed to physically interact with humans in a shared workspace. Cobots help increase efficiency, and take away some of the environmental and spatial dangers traditional robots may cause because they are designed to work alongside humans. Adding tasks to a cobot is quite simple, which makes it a highly desired tool in manufacturing. During peak times in production, you can add a task to a cobot for two weeks rather than hiring an employee for that time, thus saving time and money.
  • Robotic Process Automation (RPA)- Using RPA, a company can configure software to capture and interpret applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. This helps automate routine business practices such as warranty claims and processing. An RPA software robot never sleeps, makes zero mistakes and costs less than a traditional employee.

Are there risks involved in automating tasks?

While automating mundane, repetitive tasks frees up manpower for more skilled work, it also comes with certain risks and drawbacks. These include:

  • Displacement of middle class jobs- Many fear that automation will result in a loss of human jobs to machines.
  • Less versatility- Compared with a manual system, an automated system typically has a lower degree of flexibility. Even flexible automation is less flexible than humans!
  • Big capital investment- An automated system can cost millions of dollars to design, fabricate, and install, and a higher level of maintenance is needed than with a manually operated machine

Nevertheless as the survey points out, in 2022, machines and algorithms will replace 42% of total task hours, compared with 29% in 2018. Many manufacturers are turning toward automation to supplement the low-skilled jobs they cannot fill, which allows employers to focus their time on training existing workers on jobs that are either higher skilled or require uniquely human skills.

Questions on automation in the manufacturing industry? Reach out to us.