From the front desk to the back office — is your staff quickly becoming a thing of the past?

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From the Front Desk to the Back Office — Are Your Staff Quickly Becoming a Thing of the Past?

What does an automated future hold? Depending on who you ask, you get very different answers. For some, it's the promise of hyper convenience, maximum efficiency, no waste, and hundreds of hours of extra leisure time to finally get into archery or write that book. 

And for others, it's fear. Will robots take my job? Will my skills become obsolete? Where will I fit into a future where software automation dominates the landscape?

While there's no definitive answer to these complex questions, we're not pushing ahead blindly either. Over the last decade, we've seen unprecedented investment in automation, including robotic process automation (RPA), AI, and machine learning. And we've been able to observe the effects of this shift. So, what have we observed so far? And are workers quickly becoming a thing of the past? Let's get into it. 

The State of Automation Today – Taking a Closer Look at RPA

Robotic process automation uses software robots to automate repetitive (and often tedious) rules-based tasks that humans typically do. 

And today, RPA is a thriving industry. RPA was the fastest-growing segment of the global enterprise software market in 2018 and continues to experience phenomenal growth today. For example, the robotic process automation market size was valued at a whopping $7.11 billion in 2021 and is expected to grow from $10.1 billion in 2022 to an eye-watering $43.52 billion in 2029. 

Why RPA Adoption is Surging

RPA has achieved remarkable growth in recent years due to its considerable capabilities in automating critical business tasks. And these critical business tasks exist across industries - Healthcare, finance (banking, insurance), manufacturing, property management, customer care, retail, telecommunications, and more.

Here it comes down to the benefits of RPA - its promises and the measurable results. 

Cutting down on labor costs is one of the biggest benefits of implementing RPA. Software automation can handle many front, middle, and back office tasks that generally take up a considerable chunk of workers' time. For example, let's take repetitive administration work like pricing, invoicing, accounts receivable, and accounts payable. These tasks are critical (without them, you can get paid), but they're also exceptionally time-consuming and error-prone. And human error makes the already lengthy admin tasks even longer due to delays. 

On the side of front office tasks, without RPA, full-time employees (FTE) have to manually drudge through all the tasks associated with sales, marketing, and customer support. And in today's fiercely competitive and customer-centric business landscape, customers expect rapid responses and resolutions to their problems. Robotic process automation offers a solution, boosting efficiency and productivity while minimizing errors. 

But what happens when full-time employees suddenly have much less work on their plate? One of two things - the business either lets them go or finds more complex or creative work for them to do. 

According to a Deloitte study, around 20% of FTE capability could be provided by bots. And some companies that have already implemented and scaled RPA believe bots could fill a whopping 52% of FTE capability. 

It's not difficult to see why replacing full-time employees with bots is an attractive idea for companies. According to the Society for Human Resource Management, employee salaries can account for 18 to 52 percent of an organization's operating budget. Bots also don't come with the same quirks humans do. For example, you don't have to worry about your RPA bot getting tired, falling ill, needing to leave work early, or being poached by a competitor. 

Of course, the cost of implementing software automation has to be weighed against wage costs. But here, the results are pretty clear. Gartner found that, on average, an RPA bot costs just one-third of an offshore employee and one-fifth of an onshore employee. 

Or in other words, it's significantly cheaper to implement bots than hire bodies. Even a $2000-a-month bot amounts to $24,000 per year compared with an Invoicing Assistant salary of $36,531 (as of 2021). And one bot can do the work of several invoicing assistants! 

Here's the bottom line. Bots can do what full-time employees can't - work 24/7 with 100% accuracy. And this is precisely why RPA is forming a prominent part of so many organizations' digital transformation journey. 

Will RPA Replace Workers?

Yes and no. 

Many organizations leverage RPA to minimize the need for full-time employees whose sole job is to conduct repetitive, manual tasks. However, most FTEs don't fall into this category. In fact, most jobs fall somewhere in between. 

For example, research firm McKinsey states that 6 out of 10 current occupations have more than 30% of activities that are technically automatable. And while, on the surface, this seems like a clear win for automation, it still means a potential 70% of employee tasks still need a human agent. 

The impact of automation varies hugely based on the specific job and sector. So, the activities most susceptible to software automation include those in a predictable environment, like collecting and processing data. Here, we could see a large amount of labor displaced - for example, in accounting, back-office transaction processing, paralegal work, and so on.  

However, automation has much less of an impact in jobs that involve engaging with people, applying expertise, and thinking creatively, which (as of yet) machines perform at a much lower level than humans. 

Chatbots are an interesting use case here. On the surface, customer service seems to fall into the category of "engaging with people." Still, studies repeatedly show that customers are happy to use self-service options like chatbots over talking to a human. So, what's going on here?

Well, it comes down to the complexity of the issue. If a customer needs to do something simple, like update their address, find a specific section of the website, or get the answer to a simple question, talking to a human agent seems unnecessary. Why would you want to call a company and potentially wait several minutes to solve your issue when a chatbot can handle it in mere seconds? But for complex problems that can't be easily explained over text, human agents are absolutely necessary.

Crucially, even when companies automate some tasks with RPA, employment in those occupations often doesn't decline. This leads us to our next section. 

Revamping and Creating Jobs

Jobs are now shifting from repetitive tasks to more creative ones. In practice, this means that companies often don't fire FTEs when they adopt RPA but rather reskill their human workforce. For example, according to an IBM survey, only 20% of executives haven't yet established plans to retrain or reskill their workforce following RPA adoption. Or in other words, 80% of executives do plan to redeploy their employees in other areas of the business.

It's simple. Investing in robots helps magnify efficiency and quality of work while reducing costs. And with all this extra money, companies have more funds to put into new jobs that can give the company a competitive edge. 

And that's just on an individual company level. History has already shown how technological disruption can create new jobs. For example, between 1990 and 2010, North Carolina experienced a collapse in the manufacturing workforce. And yet, the state managed to add 729,000 jobs in other areas. 

Moreover, when you invest in new technology, you typically need workers who can understand and extract value from this technology. Or rather, a complimentary human workforce to work alongside the machines. We see this happen in areas where unskilled workers are replaced on assembly lines. Machines perform unskilled work, but more technicians are needed to maintain the machines and drive the company towards a more technological future. 

Let's Not Play With Fire

Humans have been worrying about the impact of new technology since we harnessed fire. With new technology comes new anxieties. 

People worried the invention of the printing press would lead to information overload as people would be overwhelmed with books. Then there's electricity - President Benjamin Harrison reportedly asked White House staff to turn off the lights for fear of being electrocuted. And in Victorian England, where the expanding railways allowed travelers to move across the country with unprecedented speed and efficiency, fearful Victorians argued that trains caused significant harm to mental health by injuring the brain. 

These examples may seem silly now, but they were as real for the people back then as fear of automation is for people today. In some ways, it makes sense to be cautious when entering uncharted territory. However, too much caution and you never move. Technological stagnation didn't do the Dark Ages any good, and it won't serve us well today either. 

Wrapping Up

RPA is already causing massive disruption to the labor market, and this trend shows no signs of slowing down. However, disruption doesn't necessarily mean mass unemployment - It could mean a highly engaged, creative, innovative, and highly skilled workforce. Repetitive admin tasks don't use the human brain to its full potential, leading to enormous losses for organizations.

Author

Alex Zekoff

Alex is the co-founder and CEO of Thoughtful. He’s spent his career working with Fortune 50 clients developing streamlined processes, enterprise applications, and digital workers. Now, he wants to bring this revolutionary technology to everyone with Thoughtful's pioneering model: automation-as-a-service.

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