Almost every month, we come across a study that talks about automation displacing human workers and causing massive job losses. That said, the world has had concerns about automation since the first industrial revolution in the early 1900s. It’s time that we shift gears and move away from this endless analysis of ‘job loss of millions’ and ‘displacement,’ and instead focus on a more pertinent topic: that of ‘workforce skilling’ and ‘empowerment.’
At Flex, we did a study on addressing the social impact of automation across our sites and adopting it efficiently and with responsibility. Here are some of our findings:
There is no such thing as sudden displacement of human labor by machines. Flex is a large manufacturing company with 200,000 employees across 100 sites in 30 countries. State -of-the-art manufacturing, particularly in electronics, requires extraordinarily lean processes and high efficiency. Therefore, automation has always been an integral part of our operations. Machines that offer better precision and speed perform small, redundant tasks. Now with advancements in robotics and IoT, we move to the next level. We are creating more software-controlled environments, that need higher human-machine interface across the entire supply chain. But this is not an overnight process. It goes beyond substitution of tasks and requires that we identify key points of human intervention, set up a collaborative interface across machines and supply chain, marry the product to legacy infrastructure, architect data collection from machines, and so on.
Understanding cross-skilling and upskilling requirements for this scenario is critical for sustained success in business. Overreliance on automation without planned, appropriate human intervention can lead to expensive mistakes (as admitted by even Tesla’s Elon Musk).
Profitability assumptions around automation without measuring social impact on HR is flawed. Automation evangelists simplify the correlation between productivity and profit; sometimes, they use the words interchangeably. Every proposal around intelligent automation includes a financial model analyzing Return On Invested Capital -- often linking massive substitution of labor with machines. The bottom line, stated by consultants, is something like “imagine the cost savings and profitability as you can replace 100 people with this product.”
REPORT: The Future of Work and HR
But such an assessment is incomplete. There are several operational requirements with social impact that are often not captured e.g., transition over a period, redeployment, retraining, unplanned churn, hiring newly skilled talent, as well as client and stakeholder management. It is critical to quantify these, and include the measurement in the model, to analyze the ROIC more appropriately.
Strategic change management best practices can mitigate the impact of seen and unseen risks to automation events. At Flex, we are committed to employee well-being, dignity, and respect. And therefore, it is as important a priority to strengthen our workforce across all levels as it is to achieve higher profitability and efficiency. Automation needs to be accompanied by strategic change management practices, such as:
- Effective employee engagement: It is key to have pre-event communication with primary stakeholders and employees to allay anxieties and restrain churn of a highly skilled workforce.
- Using technology for effective reassignment of labor: In one of our sites, we developed software to match people and skills with the requirements of various production lines; this helped us redeploy the workforce effectively as well as identify talent for upskilling.
- Design a cohesive reskilling, cross-skilling and upskilling program: While labor retrenchment is a real challenge across organizations, so is finding the right talent for advanced manufacturing – those who can create and manage automated platforms and processes. We are constantly evaluating vocational training and apprentice programs that can enable the labor workforce to move up the value chain and increase their income. While there is a cost associated with such skilling programs, it is eventually absorbed by shorter ramp-up times. Now we are working on creating standard best practices that can help upskill the talented workforce at scale.
Adoption of intelligent machines is essential for large scale manufacturing where just-in-time production is becoming a universal standard. That said, automation to us is not about displacement. While the risks cannot be denied, we need to look past them at the opportunities it offers employees for career progression. It is time that the media, organizations, and governments have informed discussions, institutionalize standards and best practices, and create a better state of preparedness for sustainability and economic growth.
(With inputs from the paper ‘An Assessment of the Social Impacts of Automation in a Manufacturing Environment by Bruce Klafter, Vice-President, Corporate Social and Environmental Responsibility, Flex, and Edward Quevedo, Director, Regenerative Design, The Foresight+Innovation Lab; Visiting Professor of Practice & Innovation, Stanford University School of Public Policy)
Republished with permission. Original article can be found here.