Coronavirus prods companies to speed up automation plans, costing jobs

The job growth that the nation desperately needs to rebound from the economic turmoil created by the coronavirus may be stymied as the pandemic prompts companies to accelerate their automation plans, which will require fewer workers.
“Many employers have used this COVID time to accelerate automation,” said Jane Oates, president of employment think tank WorkingNation and a former U.S. Department of Labor official under the Obama administration.
Companies have stepped up automation plans because of lost productivity due to employees not showing up for work either because they were sick or were sheltering at home to help slow the spread of the virus. This disruption would not have occurred with robots.
“Employers who were hit by the disease … particularly the ones that stayed open during COVID — the grocery stores, the Walmarts, the Targets — they are going to look at automation more because they had trouble getting people to work … who were impacted by the disease,” Oates said.
Roughly 36 million jobs could be lost to automation, according to the Brookings Institution, which agrees that the pandemic is forcing companies to adapt to automation quicker than previously planned.
“Put simply, any coronavirus-related recession is likely to bring about a spike in labor-replacing automation,” it stated.
More than 40% of companies worldwide have stepped-up their automation plans since the virus started to spread, according to a report by the EY accounting firm. This is due in part to companies facing bleak bottom lines: Automation is normally cheaper than hiring workers.
Some jobs with a high susceptibility of becoming automated are in the industries that were shut down because of the pandemic, like retail, food services, and transportation, according to Brookings.
“They have been automated out of a job,” Oates said.
If there is a bright spot to automation, it is that job losses will eventually turn into job gains, according to Ashwin Bharath, CEO, and co-founder of Revature, a tech career placement firm.
“There will be some technology that will be a job killer, and I’ve seen that automation will be a job killer. … [But] the reality is that net [job] gains are going to be in the long term rather than short term,” he said.
To make employment gains a reality, it means that workers must improve their skill sets, Bharath said.
“Absolutely, yes. … If we don’t address the ‘skills gap’ issue now, it will become an even bigger problem, and that will be the ‘opportunity gap,’” he said.
The “skills gap” is the disparity between the skills required by employers that workers do not possess. The “opportunity gap” is when workers lack the skills needed to land a well-paying job, according to Bharath.
Oates recommends that laid-off workers use part of their time away from a job to learn new skills. But going to college may not be the right answer as some institutions have been slow to provide the technical instruction needed to secure a well-paying job in today’s market.
“Businesses are not going to wait for colleges to change. … Tech companies are doing this from the ground up,” she said.
One company occupying this space is Google. In 2017, it opened “Grow with Google,” which provides free information technology training to individuals, training that can’t be found at colleges.
“These [courses] aren’t necessarily things that colleges have set out to teach,” said Lisa Gevelber, vice president of Grow with Google, adding that “if you’re going to be an IT support professional, getting a liberal arts degree … that’s not going to get you prepared for a job in IT.”
The Google program provides part-time online courses that can take between three and six months to complete. The aim is to prepare people for entry-level jobs in IT and provide work opportunities in companies like Bank of America, Best Buy, and Walmart. It also offers hundreds of apprenticeship opportunities at Google to provide graduates with on-the-job training.
For Oates, on-the-job training is key to a person learning a new skill.
“Wouldn’t you say that you learned more in a week in a job than you learned in a semester in college?” she asked rhetorically. “There is no way to get people ready for a job the way working does.”
So far, the Google program has helped 5 million people hone their IT skills, and 80% of them have either gotten a new job or had a positive outcome after completing the course, like “getting a raise,” Gevelber said, who hopes her program will close the skills gap.
“The skills gap absolutely matters if we want to rebuild an economy that works for everyone,” she said.