How Technology Can Replace Employees

Joint research from CareerBuilder and Economic Modeling Specialists International (EMSI) reveals that almost one-quarter of companies (21%) say they have replaced employees with automation technology. Among companies with more than 500 employees, the number is 30%.

While some jobs have been eliminated due to the adoption of new technology, more than two-thirds (68%) of companies who have replaced employees with automation say these actions have also resulted in the creation of new positions. Thirty-five percent of companies say they ended up creating more jobs in their firms than they had prior to the automation.

When it comes to new technology, the survey also notes that the growth of the Internet has affected the job market both negatively and positively. For example, travel agents lost more than 38,000 jobs from 2002 to 2014 as automated travel websites became more popular. This represents a 34% decline in a field paying an average of $16.17 per hour.

At the same time, the number of software developers and web developers in the United States has increased by 195,000 between 2002 to 2014. The field pays an average $43 per hour.

Similarly, the automation of data collection and reporting also impacted the job market. The survey finds that data entry workers lost more than 43,000 jobs from 2002 to 2014, a 16% decline in a field paying $14 per hour.

On the positive side, widespread adoption of using big data to make smarter business decisions and develop better products and services has created a big demand for people who know how to interpret data and make it meaningful for organizations. The survey finds that market research analysts added more than 99,000 jobs from 2002 to 2014, a 28% increase in a field paying $29.18 per hour.

“Technological advancements have not only increased productivity, but historically have led to an expansion of employment,” says Matt Ferguson, CEO of CareerBuilder, based in Chicago. “While automation may eliminate some jobs, it also creates other jobs that are higher paying and lifts the standard of living for the economy as a whole. One of the greatest challenges the U.S. faces today is sufficiently preparing the work force for the influx of more knowledge-based jobs that will likely result from progress in robotics and other science, technology, engineering and math fields.”

The survey finds that information technology firms were twice as likely as all employers to say they have “deskilled” employees (i.e., replaced them with new technology), at 42%. Rounding out the top three industries were financial services at 27% and manufacturing at 23%.

Across industries, 31% of employers predicted that certain jobs within their firms will likely be replaced by technology to some degree in the next decade. The functional areas most likely to be impacted, according to employers, include:

• Customer Service (35%);
• Information Technology (33%);
• Accounting/Finance (32%);
• Assembly/Production (30%);
• Shipping/Distribution (25%); and
• Sales (17%).

Technology is not necessarily the best solution for some companies, finds the survey. While automation via new technology has produced greater efficiencies and output in some cases, eliminating the human factor has backfired in others. Thirty-five percent of firms that replaced employees with technology say they hired people back because the technology did not work out.

This survey was conducted online by Harris Poll, on behalf of CareerBuilder, among 2,188 hiring managers and human resource professionals ages 18 and over between May 13 and June 6. EMSI, a CareerBuilder company, turns labor market data into useful information that helps organizations understand the connection between economies, people and work.