Is Automation a Job Killer or Creator?

Both, but net result is often new jobs with higher wages

Is automation a job killer or creator? Both, according to new research from CareerBuilder and Economic Modeling Specialists Intl. (EMSI).

In a nationwide survey, one in five companies (21%) reported they have deskilled workers, i.e., replaced employees with automation. Among companies with more than 500 employees, the number is 30%.

While eliminating jobs, the vast majority (68%) of companies who have replaced workers with automation said their adoption of new technology resulted in new positions being added in their firms. Thirty-five percent of companies that deskilled workers said they ended up creating more jobs in their firms than they had prior to the automation.

Decline and Growth of U.S. Jobs

In separate research, CareerBuilder and EMSI looked at historical acceleration and deceleration of the 786 occupations recognized by the U.S. Bureau of Labor Statistics. Since 2002, 257 occupations experienced a decline in employment, roughly one third of all U.S. jobs. At the same time, 483 occupations (61%) grew 1% or more. The hourly earnings for the growing occupations were nearly $2 higher than the declining occupations.

While some of the losses and gains can be attributed to economic cycles and globalization, arguably automation has also had a significant influence on employment shifts. Consider these examples:

The Internet

The ubiquitous use of the Internet negatively impacted employment in a variety of areas. Travel agents lost more than 38,000 jobs from 2002 to 2014 as a slew of automated travel websites were established. This represents a 34% decline in a field paying $16.17 per hour.

At the same time, the number of software developers and Web developers in the U.S. increased by 195,000 from 2002 to 2014, paying $43 per hour.

Automation of Data

The automation of data collection and reporting also claimed its fair share of casualties. Data entry keyers lost more than 43,000 jobs from 2002 to 2014, a 16% decline in a field paying $14 per hour.

At the same time, the widespread adoption of using big data to make smarter business decisions and develop better products and services created a big demand for people who know how to interpret data and make it meaningful for organizations. Market research analysts added more than 99,000 jobs from 2002 to 2014, a 28% increase in a field paying $29.18 per hour.

“Technological advancements have not only increased productivity, but historically have led to an expansion of employment,” said Matt Ferguson, CEO of CareerBuilder and co-author of The Talent Equation. “While automation may eliminate some jobs, it also creates other jobs that are higher paying and lifts the standard of living for the economy as a whole. One of the greatest challenges the U.S. faces today is sufficiently preparing the workforce for the influx of more knowledge-based jobs that will likely result from progress in robotics and other STEM-related fields (science, technology, engineering and math).”

Industries and Job Types Most Likely to Be Affected

Being at the forefront of innovation, information technology firms were twice as likely as all employers to say they have deskilled workers at 42%, according to the CareerBuilder/Harris Poll survey. Rounding out the top three industries were financial services at 27% and manufacturing at 23%.

Across industries, 31% of employers predicted that certain jobs within their firms will likely be replaced by technology to some degree in the next decade. The functional areas most likely to be impacted, according to employers, include:

• Customer service35%
• Information technology33%
• Accounting/finance32%
• Assembly/production30%
• Shipping/distribution25%
• Sale: 17%

Man Vs. Machine: When Technology Doesn’t Work

While automation has produced greater efficiencies and output, eliminating the human factor can backfire in some cases. Thirty-five percent of firms that deskilled workers said they hired people back because the technology didn’t work out.