Australia’ shrinking workforce may be its biggest disruptor yet, according to automation vendors, who are positioning their technology as a way to offset the baby boomer generation’s upcoming “baby bust”.

Bernard Salt, managing director of The Demographics Group, says UN population data shows growth in Australia’s workforce population is beginning to slow after averaging around 150,000 net extra people per year for the last 60 years.

Additional immigration restrictions due to COVID-19 and a looming “baby bust” – the period when baby boomers exit the workforce – means Australia will have a shortage of working age population – 15 to 64 year olds – in the coming decade, Salt says.

“15 to 64 year olds buy consumer goods, they take out loans they reproduce and they pay tax. This is the gut, the engine, the piston that drives, in this case, the Australian economy,” Salt said as the keynote speaker at automation vendor UiPath’ annual event last week.

“In the 2020s baby boomers start to exit the workforce at a faster rate than millennials enter the workforce. It’s the baby bust. If there was a baby boom in the 1950s, there’s a baby bust in the 2020s.”

Source: The Demographics Group. Image Supplied.

According to Salt it means even without coronavirus restrictions, Australia needed to improve its productivity rates in order to maintain economic growth.

“The way you would do that is through technology, through automation. And that is the point: this was going to happen anyway. Add on to that the impact of the coronavirus, and you’ve got this double whammy happening in Australia.”

Salt urged Australian businesses and workers to be adaptable to new working arrangements and protocols, noting historically Australia had handled transitions fairly well.

A rush online and a boom in shipping and logistics brought on by coronavirus and subsequent lockdowns provides a glimpse of where Australia is heading, Salt said. While some industries have been decimated by COVID-19 others have thrived, in particular, Salt says, logistics, technology, healthcare and agribusiness.

Added pressures

An extension of the technology boom and one that could help with the disruption of workforce changes is automation, Salt said.

“Technology that enables business to go online, was in, in demand. And I suppose an extension of that is the role of automation. So making businesses more efficient taking out … the boring bits of jobs. So enable people to do the more creative, interesting, entrepreneurial aspect of jobs.”

Automation is expected to kill 20 per cent of jobs in Australia by the mid 2030’s, according to recent research from the ACS. The IT group says it will augment the roles of even more and could improve businesses’ capacity by 15 per cent.

In follow up questions on what evidence there is automation would translate to economic growth that would be shared with workers, Salt compared the technology to previous advances in mechanisation.

“Blacksmiths and candlemakers were displaced by motor vehicles and electricity. Petrol pump attendants were displaced by self-serve bowsers,” Salt told Which-50.

“Over the course of 30 years the proportion of labour engaged in, say, manufacturing, has decreased and yet the output of manufactured goods has profoundly increased (meaning that output per employed worker has increased due to automation/mechanisation). Over the same timeframe the proportion of workers engaged in the delivery of services, including care (eg child care, aged care, disability care), has skyrocketed. Over time labour has transitioned out of tasks that can be—and I would argue should be—better performed by a machine and into tasks that require empathy and intuition.”

Salt says hyper automation is the next major phase in workplace change and will allow even repetitious knowledge work to be performed by machines. But it will require huge amounts of re-skilling throughout a worker’s life.

David Johnston, Manager Intelligent Automation & Process Excellence at Heritage Bank says automation has already improved worker’s lives in two main ways.

“Simply removing the mundane work, where this hasn’t been in the full process or full task has allowed staff to self-reinvest this time in more interesting work,” Johnston says.

“More importantly, we are seeing new roles being created, and this is creating opportunities for staff to develop.  We’ve now had three internal hires into our Automation team, one from Technology (a web developer), one from the Contact Centre (a team leader of an inbound customer service team) and one from our Operations team (a senior processing officer).”

Johnston explains that in the last example the internal automation hire quickly became a valuable RPA developer, using the knowledge from previous Heritage Bank roles to develop new automation processes.

“Economically, she’s definitely better off in automation than in Operations.”

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