Automation, Job Threats, and Skills Upgradation

By SHRM India Content Team Jun 13, 2017
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The Fourth Industrial Revolution is in progress, the advancements in technology being the predominant contributor. While several countries will be impacted due to new-age technologies such as automation, data science, digitization and artificial Intelligence (AI), India may bear quite a bit of the brunt. By 2021, India will account for around 23 percent of jobs to be lost to automation globally, says a research by PeopleStrong. In fact, a World Bank report also confirms automation threatening 69 percent of the jobs in India.

1.      Main Sectors Facing Threat of Automation

IT

The recent mayhem in the Indian IT industry owing to mass layoffs by IT giants such as Cognizant, Tech Mahindra, Wipro, and Infosys is the reflection of looming threat of automation on the employment sector. It is believed that low-skilled, outsourced, and non-customer facing positions in the IT industry are at the biggest risk. According to a McKinsey & Company report, nearly half of the workforce in the IT services will become irrelevant over the next three to four years.

The Indian IT companies have witnessed a dip in their revenues over the last few years, owing to market volatility, complex customer demands, and to a considerable extent, even due to the 'protectionist' regime of the ruling government in the United States, India's largest market. These companies are facing the strain of safeguarding their margins, remaining cost-effective, and boosting their productivity. So, automation as well as AI enabled platforms will be the keys to achieve the balance between these three factors. Such platforms can work all shifts, thereby not only reducing the time and cost to man the human capital, but also generating higher output with lower input.

For instance, Wipro uses an AI platform Holmes to automate several aspects of its so-called fixed-price projects, which saves up to $46.5 million and frees around 3,000 engineers from mundane software maintenance activities. Then, there is UVO chatbot used by Tech Mahindra to solve HR queries and engage with more than one lakh employees. The purpose of this chatbot which uses AI and machine learning is to automate the lower-end jobs and move people to more complicated roles.

It's not only the IT industry that is facing the wrath of new-age technologies, which are replacing/likely to replace the manpower in the future. A survey by JobBuzz highlights that apart from IT, other sectors such as telecom, manufacturing, healthcare, and BFSI will also take the worse hit due to automation.

Banking Financial Services Insurance(BFSI)

BFSI is looking at automation and AI to streamline its back office operations and make the front-end customer interactions effortless. Whether it is digitizing the data collection and processing transactions, or enhancing customer experience with robotic assistants, the focus of BFSI is on freeing the human talent from mundane, repetitive tasks; groom them to become innovators, coaches and mentors; help them focus on value-added services; and achieve work-life balance. Automation in BFSI is also expected to mitigate the risks that usually come with human errors, and make the sector more efficient and transparent.

ICICI Bank has already deployed software robotics to automate 200 business process functions, especially high volume transactions such as updation of declarations for avoiding tax deduction on fixed deposits and reconciliation of ATM declined transactions; and third party communication such as Income Tax PAN and Aadhaar validation, IRCTC refund processing, resolving chargeback disputes with merchants and integrating with the courier company's website for delivery of cards, cheque books, and PIN numbers. HDFC Bank has also introduced Ira, the first humanoid in the Indian banking industry, to improve its customer service and marketing.

Manufacturing

The manufacturing sector is not lagging behind either in job cuts. The engineering giant Larsen & Toubro laying off 14,000 employees, Nokia shutting down its Chennai factory leaving 6600 workers out of job, Raymond planning to replace 10,000 jobs with robots and TATA Motors downsizing 1500 managerial jobs are just a few examples. The industrial automation, apart from plunging sales, has been a major contributor to the layoffs. The government wants to make manufacturing contribute 25 percent of GDP, which requires world-class facilities and infrastructure. There is no doubt that manufacturers would invest more in automation to improve productivity and quality while striving to reduce labour cost.

In fact, a few automakers have already taken the automation leap to handle scalability, meet labour andauto safety norms, and ensure precision in every part produced. Maruti Suzuki and Hyundai Motor India have deployed robots to do tasks in weld, paint, and press shops. While, right now there is one robot for every 4-6 workers, it wouldn't be surprising that there will be one worker to manage a team of 4-10 robots in the coming years.

Even simple automatic machines such as Dosamatic, the world's first counter-top 'dosa' (Indian savoury pancake) making a machine which churns out 50-60 dosas per hour and can work for 14 hours has the threat of rendering the labour in restaurants jobless.

Healthcare

As far as the healthcare sector is concerned, India is struggling with providing quality healthcare and making available sufficient manpower in the medical and healthcare industry. The country ranks a lowly 154 in global healthcare access and quality index. Since the demand-supply (the ratio of patients with respect to doctors & medical staff) gap will continue to exist, all eyes are on automating medical procedures where human intervention can be reduced.

For instance, SigTuple, a data driven intelligence startup in the healthcare domain provides smart screening solutions for the analysis of blood smears, urine microscopy, semen, fundus and OCT scans, and chest x-rays, without requiring the intervention of medical specialists. Robotic assisted surgery is another area where automation is likely to make an impact in the near future.

Telecom

The telecom sector is hugely capital intensive and time sensitive. Any delay in the completion of projects can result in a loss worth thousands of rupees for the telecom companies. Similarly, non-timely resolution of queries can seriously affect the customer satisfaction and the company's brand reputation. Given that India is the second largest telecom market and has the third largest number of internet users in the world, and is only poised to grow further, the number of transactions will increase. It will become challenging to handle the volume manually. So, the telecom companies are depending on the automated processes to scale infrastructure, simplify B2B as well as B2C communication, and address customer queries and grievances. They are even going to the extent of using AI to implement a fraud management system and capture the loopholes, which otherwise the human mind may miss.

2.      What Do the Employees Feel about Automation?

A survey by JobBuzz highlights that about 70 percent of the Indian employees think that automation will take away their jobs and 20 percent feel that automation will make their jobs better. However, 55 percent of employees would like to upgrade their skills to battle the impact of automation.

A similar sentiment is reflected in another report, which shows that 79 percent of business leaders and 63 percent of general employees think that automation and artificial intelligence could replace a number of jobs in the workforce. However, 87 percent of people are confident that India has the right skills to address the concern.

3.      Essential Skills Required in the Wake of Automation

While the apprehension of losing job security is the most natural human tendency, there are some factors like technology that are beyond an individual's control. The sooner the employees embrace the truth, the easier it would be to convert it in to an opportunity. This can be done by upgrading employee-skillset with the following skills for the requirement of future roles:

  • Leadership: The ability to lead the automation change will be a crucial skill in the organization. The leader will be also responsible for identifying the right talent in the machine age and engaging the workforce through human touch points.
  • Information Technology: Who can handle technology better than the technologists themselves? However, automation will force employees to hone their understanding of big data, machine learning, cloud computing, augmented reality, and mathematical and analytical skills. With the huge amount of data available, they should be able to apply it to present insight.
     
  • Management: The future workplaces will be a collaboration of machines/robots and humans. Hence, the managerial skills required to strike a balance between machines and human emotions, and making them work alongside will also come handy.

  • Soft Skills: Machines are after all machines. They may do work more quickly and efficiently, but they can't bring in 100 percent human touch and feel. There will be areas where people to people interaction, human relationships, and networking will still matter, hence soft skills such as communication, social and behavioural, cognitive and emotional intelligence would be expected from the employees.

It's about time that employees start reskilling/upgrading their skills and search for relevant programmes/courses in their organizations or outside. For example, IT major Capgemini is planning to train each of its one lakh employees in India in digital skills by 2018. Intel has launched 60 courses as a part of its 'AI Developer Education Programme' to train 15,000 Indian engineers, developers, scientists, and students.

It can't be denied that automation will impact the jobs considerably in India. However, developing people-centric skills and upgrading/reskilling for new roles could help employees tide over the automation wave.

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