Lack of skills investment means businesses miss out on benefits of automation

A new report from the Capgemini Research Institute claims that, in the majority of companies (58 percent), automation is not yet meeting executives’ desired goals of increased productivity. The study, Upskilling your workforce for the age of the machine: Why a workforce upskilling strategy is key to unleashing automation’s productivity potential reveals that while automation does increase productivity to an extent, the key to reaching its full potential is by appropriate upskilling of the workforce.

The research, which is based on a survey of 800 executives and 1,200 employees from over 400 large organisations, also suggests that enterprises with a 50,000 strong workforce or more, who have advanced in the full-scale running of upskilling programs can expect to save around $100 million more per year than companies that do not upskill or are yet to upskill their employees.

Automation is not yet meeting its desired aim to boost productivity

When asked to name their main reasons for undertaking automation initiatives, 37% of respondents said it was to improve workforce productivity, the most popular motivation after improving quality (43%). Yet, 58% of executives, and 54% of employees, said that technology had not yet improved productivity in their organisation. This was especially marked in Sweden, the United States and China, where 66%, 64% and 61% of executives respectively said automation had failed to enhance employee productivity. Moreover, employees in most countries agree with the opinions of executives on this point, with the exception of India, China and France.

Upskilling unlocks the benefits of automation – and boosts employee morale and retention

Among organisation which were already upskilling their workforce, there was more optimism about the impact of automation. In these cases, most employees (52%) and a high proportion of executives (46%) said that automation was improving productivity; compared to just 42% of employees and 35% of executives, respectively, in those organisation that are yet to start full-scale upskilling. Moreover, in organisation midway through an upskilling program, employees were more positive than those in the initial phase of upskilling, about career progression (76% vs. 60%); boosted morale (48% vs. 33%); and carrying out new responsibilities (57% to 46%).

Upskilling initiatives for employees still need to mature

Despite the evident importance of upskilling programs, few organisations have a mature initiative in place today. While 91% of organisations surveyed had either completed or started working on a training curriculum, 35% are yet to begin putting in place relevant infrastructure and partnerships, 73% have not started a pilot run, and just 10% have begun a full-scale run of upskilling programs for their workforce. Employees were also critical of some aspects of existing upskilling and learning programs. A clear majority (61%) said these programs had not helped them develop the skills to do their work more efficiently, while 54% said the programs had failed to give them skills that would make them more employable. By contrast, 62% and 54% respectively said the programs “helped me to avoid being laid off” and “get rid of repetitive activities”.

For most organisations, the impact of automation on the workforce is an after-thought

The report finds that analysing the impact of automation on people is a key consideration that many organisations struggle with, but it is an important first step. Almost 60% of HR and general management executives admit that the impact of automation on the workforce is not a key consideration in their leadership’s automation vision and strategy. Furthermore, organisation leaders are not communicating frequently with their employees on automation initiatives, upskilling plans and emerging roles. Less than half of senior executives (45%) surveyed communicate with their workforce on the organisations’ automation initiatives, their importance and potential impact on workforce.

Eberhard Schroder, Director HR services at ZF Friedrichshafen, a German car parts manufacturer, said, “I believe that change management in adapting the workforce to automation plays at least half the role in making a success of an automation strategy. And communication is a key pillar that change management rests on. Leaders have to come out and communicate from an organisation perspective: what are we doing, why are we doing it, and to what extent.”

Claudia Crummenerl, Managing Director, People and Organization practice at Capgemini Invent said, “Automation offers significant benefits to large organisations, but only if the implementation of technology is matched by the upskilling of people. Too many big companies are lagging in developing training programs and, as this research shows, are not realising full productivity benefits as a result. There is no question that automation is going to transform the workforce and existing job roles, but the crucial factor is that companies make faster progress to prepare themselves, and their employees, to realise the benefits of automation.”