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The Great Resignation May Lead to the Great Automation

November 29, 2021

By Michael Burns, courtesy of SBAM Approved Partner ASE

This September, 4.4 million workers quit their jobs. The highest month of quits on record. You would have to be in a cave not to have heard about the general labor shortage employers have been dealing with. I have not heard any ASE members state that they are not looking for workers in recent months, if not longer.

What you may have missed recently; however, as Reported in Reuters, is that North American companies added $1.5 billion worth of robots to their workplace. That’s an increase of 29,000 or 37% more than last year at this comparable time.

Did anybody think that businesses (employers to be more exact) would be capitulating to a labor shortage? Put another way as stated in Yahoo Finance’s Morning Brief last week, “Are workers reluctant to fill open jobs – or stay put in them, for that matter – sowing the seeds of humanity’s eventual demise in the labor force?” A bit melodramatic, but it drives home the point that employers are not sitting still while their labor force is currently shrinking to a point where their businesses are threatened.

  • 73% of CEOs say a labor/skills shortage is the most likely external issue to disrupt their business in the next 12 months.
  • 57% of CEOs say attracting and recruiting talent is among their organization’s biggest challenges. That was followed by 51% who said retaining talent.
  • 35% of CEOs say they’ve expanded benefits in the past 12 months in order to strengthen their ability to retain talent.
  • 67% of CEOs say they expect strong growth for their company over the next 12 months. Another 31% say modest growth, while 3% say weak growth.

Fortune and Deloitte survey of 117 CEO’s (Fall 2021)

One industry that continues to be hard hit by the Great Resignation is hospitality – and more specifically, restaurants. In Michigan our legislature is looking at a bill allowing for the automated dispensing of alcohol so restaurants and bars can service alcoholic drinks through a self-serve drink dispenser rather than through a bartender, waiter, or waitress. (Michigan HB 5304).

A recent HSBC Global Research report identified that waiters, inspectors, receptionists, and groundskeeper jobs had a 90% chance of displacement in the next ten years. Why? James Pomeroy, Economist and one of the report authors points out that “these jobs are low skill enough to be able to create the hardware and software needed to save the employment cost but high enough paid to justify building a robot.”

We are hearing the flip side of this situation. Employers are raising wages, an arguably good thing, all things considered. But we are also experiencing inflation. Most recently inflation hit 6.2% year over year, and the highest inflation rate in the lives of workers under 30 years of age.

As one savvy restaurateur and businessman was quoted stating, “If we can get our payroll down to 15-20% (by automating) instead of the industry normal of 32% we’re not just saving one restaurant… we’re really changing the game on the industry for making it a more efficient model.” (Stratis Morgfogen Yahoo Finance quote)

So as former employees ponder their futures given the impact of the pandemic on their lives and employment, businesses are quickly adapting to address the shortage of workers and to face customer demand despite struggling to employ people. Next – cue the media interviews of crestfallen former workers lamenting they are unable to get their old jobs back because they are now done of by a robot.

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