Shift to automate may permanently reduce workforce

In the face of an ongoing labor shortage, more companies are turning toward automation to keep business running, according to a survey of 1,250 business owners across a range of industries, released this week.

Business review website Digital.com found that more than 80% of companies have been adversely affected by the current labor shortage and are turning to a variety of measures to cope with the lack of staff, including automation tools, upskilling existing employees, and paying higher wages to attract workers.

Automation is the driving force behind the trend. Three out of four business owners said they have considered or already invested in automation tools as a result of the workforce shortage—and more than half of those (55%) said the shift toward automation will permanently cut back on labor. The survey also found that more than 70% of business owners have considered or invested in offshore labor to close the gap.

At the same time, 73% of business owners said they are hopeful that the end of unemployment benefits will ease the labor crunch. Some states are ending extended unemployment benefits this fall, and many have already done so, which may put pressure on workers to return to the labor force, business leaders say.

But Digial.com researchers caution that may not be the case.

“... since the majority of business owners believe the shift to automation will be permanent, and since many have already pivoted to upskilling and freelance work, it’s possible that the positions that many are desperate to fill now may not exist by the time people want to take them,” they said.