With 10 million job openings in August 2022 but only 6 million job seekers, the US is experiencing a labor shortage not seen in 40 years. This decline is driving a need for automation. From conventional RPAs to AI and low-code programming, automation technologies offer a number of ways to mitigate the problems caused by workforce shortfalls.
Why is the workforce shrinking?
An aging population, which has been a long-term driver of workforce declines, was exacerbated by the COVID-19 pandemic. In the US alone, the pace of retirement among baby boomers rapidly accelerated between 2019 and 2020, but younger workers were also negatively impacted by lockdowns and layoffs in 2020.
Despite a robust job recovery, multiple barriers continue to prevent workers from reentering the labor force. Many workers laid off during the pandemic have found that their skills have lapsed, while others have chosen to remain home due to scarce child care resources. Others are leaving the workplace entirely or seeking jobs that offer more flexibility, higher wages, or different challenges.
This reduction in workforce has challenged business in numerous ways. Organizations looking to hire new employees may face a smaller, less experienced pool of applicants than previously, while those that successfully fill vacancies may find that employee turnover has created gaps in institutional knowledge. Automation, however, can mitigate many of these impacts. It can allow departments to guide new employees as they gain skills or experience, thereby eliminating a potential barrier to hiring. It can also preserve the established practices and workplace expertise that can otherwise be lost when an employee leaves.
The benefits of automation
Automation is nothing new; businesses have long used it to replicate employee work functions. Robotic process automation, or RPA, is a mainstay solution for repetitive, predictable tasks like validating timesheets or tracking inventory. Strategies like this can help organizations facing labor shortages by eliminating the need for some positions and reducing training time and errors for new workers in remaining positions.
Because this type of automation primarily mimics existing operations, it has limitations. Traditional RPA can maintain a legacy process, but doesn't have the power to streamline or improve the work flow. Meanwhile, newer AI technologies offer more dynamic solutions, allowing organizations to modify existing work processes for greater efficiency. Many RPA vendors have begun integrating AI applications into their existing programs to make them more adaptable. American Fidelity Assurance Company used machine learning to boost the capability of an existing RPA solution to analyze and direct customer emails to appropriate departments. Customer service chatbots can be programmed to assist customers and also taught to recognize situations that require a human agent. These newer technologies allow businesses to meet labor needs by leveraging the expertise of their current workforce while freeing up workers to focus on more high-level work streams that require human judgment.
Low-code programming can also boost the capabilities of organizations facing a shrinking workforce. While other automation programs require IT experts to install and manage, low-code programming expands the field of who can drive automation projects, thereby dramatically reducing the price tag. Drag-and-drop interfaces in low-code platforms allow workers without IT training to create apps to improve their workflow process. For these reasons, low-code programming has become increasingly popular, and is expected to grow from a $13.2 billion industry in 2020 to $45.5 billion by 2025. Low-code apps do require some acumen, as app designers must understand the business process they are automating as well as their goals for the automation project, but they offer a massive boost in speed and customizability.
Implementing automation effectively
To get the most out of adopting or increasing their use of automation technology, organizations need to make automation a strategic priority. In a 2020 study, 72% of large companies that successfully adopted automation did so by incorporating it within their business strategy at a C-suite level. By contrast, organizations that only adopted automation to meet line-item goals such as improving cost savings or worker efficiency achieved much less success in their implementations. When automation is elevated to executive-level strategy, decision-makers can think globally about the costs and benefits of the technology across the organization.
The companies with the most successful automation implementations also chose technologies that could be scaled across departments, and made workers a central part of their automation strategy. These organizations invested in training personnel to use new technology, created custom and low-code automations designed around their employees’ expertise and input, and communicated with employees throughout the software onboarding process.
With this kind of intentional implementation, automation and low-code have the potential to address workforce shortages, reshape business processes for greater efficiency, and transform time-consuming legacy workflows. They can also shift hiring needs away from some hard-to-find skill sets and offer a backstop against errors and confusion when staff are underskilled or turnover is high. All of these benefits help organizations maintain operational resiliency in the face of complex challenges and volatile times.
This blog is written by Kate Gustafson (PhD). Drawing on her background as a writer and researcher, Kate covers trends in low-code development, business process automation, and data-driven business strategy. In her free time, she loves reading and a good cup of tea.