Four success factors for workforce automation

January 23, 2020

 

Here is an excerpt from an article written by Javier Gil Gómez, Pablo Hernández, and Rafael Ocejo for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out others, learn more about the firm, and sign up for email alerts, please click here.

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Work is changing, for the better. Top companies manage to capture the benefits of automation for their business—and their workers.
The fear of the future can be a powerful deterrent to change, as shown by a recent McKinsey Global Survey about the spread of automation in the workplace. Almost half of the respondent executives who rated their current automation programs a success nevertheless identified two factors—managing employee resistance to change and attracting talent—as their biggest challenges to adopting automation over the next three years (Exhibit 1).It’s a truism that change brings challenges. But it’s equally true that change brings opportunities. Automation has huge potential to change the nature of work, most obviously by freeing up workers from repetitive and tedious tasks. It’s hard to argue that this is not a change for good. The challenge for enterprises and society at large is to ensure that automation is used to augment rather than replace the workforce: better jobs, not fewer. And, potentially, more jobs. As a recent analysis of artificial intelligence (AI) found, companies that use AI to support innovation rather than just cut costs are employment creators.
Accordingly, while many types of jobs will disappear, the need for employees will not. What is not as widely recognized as it could be is that for many jobs, the nature of the tasks required to perform them means that the human element will always be required. While the McKinsey Global Institute estimates that around 50 percent of current workforce activities could be automated with already proven technologies, only 10 percent of those jobs are automatable at a rate above 90 percent.There is no doubt that significant change is coming. Automation changes the capabilities required to perform jobs, and it changes the nature of the work employees are currently executing.
What results is even more a skills challenge than it is a jobs challenge. We estimate that by 2030, 375 million workers globally and more than 30 percent of the total workforce in the US will need to change jobs or upgrade their skills significantly. And businesses increasingly recognize that they’ll need to take the lead in helping their people make the transition.

A new world

This is an opportunity with clear benefits if the transition is managed well by companies and society. We believe the most useful way to view automation is as a tool that puts innovation at the hands of employees. From this perspective, automation is not about technology deployment but about managing complexity and cultural change, capturing impact, and building capabilities.

Automation therefore results in transformational rather than incremental change; transformative for owners, employees, and customers, as well as wider society.

Just how transformational this change will be remains to be seen. Even companies that have successfully started on this journey often don’t know where they will end up. As shown in Exhibit 1 above, 27 percent of respondents that rated their automation efforts as successful to date said that understanding and capturing the opportunity would be their biggest challenge over the coming three years. They’re on the way, but there is still a long way to go.

What is perhaps surprising, given the availability of automation technology and our increasing experience with how to deploy it, is how few organizations have launched automation programs. More than 40 percent of European and North American executives said they have not started any automation effort so far. The remainder were almost evenly split between having piloted and having fully launched automation (Exhibit 2).

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Here is a direct link to the complete article.

Javier Gil Gomez and Pablo Hernandez are both partners in McKinsey’s Madrid office, where Rafael Ocejo is an engagement manager.

 

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