Future Look |

Automation’s Resounding Effect on Work and Rewards Is Nearing a Fever Pitch


Automation is the boogeyman buzzword when it comes to discussing the future of work. Yes, it’s true that automation will displace workers, as an estimated 32% of U.S. jobs are expected to be eliminated by 2030.

However, some economists and futurists have surmised that, if handled properly, new roles will grow from those displaced jobs and that technological advancement is ultimately a good thing.

“Jobs don’t go away, they transition, and they transition in different ways,” Parminder K. Jassal, Ph.D. of the Institute for the Future (IFTF) said in an interview with WorldatWork. “So, what we do believe is that many more jobs will be affected by automation, but we believe they’ll be affected in different ways. We think it affects the entire process and how we do things, not just front-line processes.” 

When it comes to how those front-line workers will be compensated, however, some economists are reassessing. David Autor of MIT and Anna Salomons of Utrecht University concluded that the use of AI explains the decline in the share of national income going into workers’ paychecks over the last three decades. 

There’s a growing belief that one of the reasons workers have not seen larger wage gains in the past few years is because, despite the significant advances in technology, overall productivity has not improved all that much.

There is some hope, however, that trend could change in the future. 

“It takes time for people and processes to adapt to new technology and take full advantage of technological advancements for productivity gains to be realized,” said Sue Holloway, CCP, CECP, director of executive compensation strategy at WorldatWork.

Like workers, the professionals compensating them are aware they too will need to adapt. WorldatWork’s Compensation Function of the Future survey of 364 members in conjunction with demonstrated how the profile of a successful compensation professional is changing. It revealed that while there is an expectation of artificial intelligence (AI), machine learning and predictive analytics to become increasingly influential in their compensation processes, respondents are anticipating other variables as well.

They expect activities related to creating, analyzing, interpreting and/or presenting analytic results, pay equity and transparency to top the list of their most important responsibilities in two to three years.

“As technology produces more advanced insights, compensation professionals will need to have greater contextual expertise and an ability to articulate powerful stories to aid in rewards decision making,” said Alison Avalos, CCP, CBP, GRP, director of membership and total rewards strategy at WorldatWork.

Tracey Malcolm, global future of work leader at Willis Towers Watson, said that because of automation, organizations will need to consider a myriad of factors to get the right mix of work and value. 

“What’s coming into play is a need to determine if the job will continue to slope upward in terms of compensation, or do we need to reinvent the job,” Malcolm said. “Then there’s a need to be proactive about compensation or total rewards decisions in what the optimal equation is for that.”

Economists and futurists disagree about the future of the labor market.


Automating a Workforce Split

Using the Phoenix area as a prime example, Eduardo Porter of the New York Times examines how automation has severely limited the amount of decent paying jobs for workers without college degrees. Porter writes that an uncomfortable pattern is taking shape across the American economy: Despite all the shiny new high-tech businesses, the vast majority of new jobs are in workaday service industries, like health care, hospitality, retail and building services.

New Jersey Wage Increase

New Jersey raised its minimum wage to $15 an hour on Monday. Gov. Phil Murphy signed the bill that was sent to him by the legislature four days earlier. Dustin Racioppi of the Trenton Bureau reports that Sen. Kip Bateman, a Republican who voted against the bill, warns corporations and chains will respond by replacing entry-level jobs with kiosks and automated services. Murphy pushed back against those concerns and called the implementation of the law “a very responsible, long-fused phase-in.”

Quiet Disruption

Sidney Fussell does a deep dive into how automation is disrupting the service industry, hotels in particular, in this piece for The Atlantic. Fussell reports that tech-enabled labor is saving businesses time, therefore a loss in wages isn’t easy to see in employment numbers or even hourly wages, but rather the hours each employee works weekly. 

The Wage Upside to Tech Advancement

While some tech disruption is negatively affecting some service workers, it is also in the process of creating future jobs for others. In this Forbes article, Lan Xuezhao writes that technology is already creating roles that didn’t exist five or 15 years ago and the compensation for those roles are quite lucrative. Xuezhao uses field technicians on farms that fix robots for robotic companies as an example of this. Those technicians can receive compensation 50-70% higher than for typical farm roles — and you don’t need a computer science or technical degree to get started. 

Automating Compensation

Chris Davis of the CIO shows five ways that leading chief information officers are deploying AI in 2019 and beyond. One of Davis’ examples is Walmart CIO Clay Johnson, who has deployed 500 bots to automate processes and drive efficiencies. The early use case for Walmart is focused on automating processes such as accounts payable, accounts receivable and compensation and benefits.

About the Author 

Brett Christie is a staff writer at WorldatWork. 

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