By Jason Downing, Vice Chairman and US Deloitte Private Leader, Deloitte LLP
Digital disruption is impacting private companies across America — and it’s showing no signs of stopping anytime soon. From changing how these companies interact with customers, to accelerating the pace of transactions and production, digital disruption is rapidly transforming the way businesses operate. In particular, the accelerating pace of artificial intelligence (AI) and automation technology adoption is radically changing how businesses and society at large think about the labor market. Traditionally, these changes have largely focused on sectors like manufacturing, but there is a great deal of change coming for non-factory workers as well. While this evolution brings questions and challenges that won’t be solved overnight, private companies are already working to reshape the workforce of the future.
Though digital disruption is impacting the workplace for an array of businesses, factory and warehouse automation tend to receive the headlines. In fact, the Deloitte Private 2019 Mid-Market Technology Report found that private companies are anticipating Sales, Marketing and Human Resources will be three of the areas most impacted by this disruption over the next 3-5 years.
So how are private companies preparing for the potential workforce impact coming their way?
Fortunately, they’re understanding and embracing the time-tested strategy of investing in their workforce to get the most out of this digital disruption. Notably, reskilling employees has become a major priority for private companies — with half of respondents from our technology survey stating that they are not only retraining talent, but also reimagining roles to better adapt to the AI-enabled workplace of the future. Some may speculate that AI and automation represent an easy way for these companies to cut down on personnel costs while increasing productivity, benefitting bottom lines at the expense of human workers. Yet a majority of respondents emphasized that these technologies give them the opportunity to reskill their employees into higher-value roles — mitigating the time and resource costs that go into external recruiting efforts and solving for the skills gap that exists across several industries.
While reskilling current employees remains top of mind, private companies won’t be able to meet all their future business needs with internal talent alone. Over two-thirds of survey respondents noted that they plan to attract, recruit and retain talent who specialize in emerging technologies such as AI, predictive analytics and other technical skill sets. This is a particularly important trend to note, since these companies are continuing to prioritize their investment in such technologies as well as believing they will have the greatest impact on their business over the next 12 months.
Despite these plans to lessen the impact of digital disruption to the workforce, it is likely that some low-skill roles will be eliminated in the years ahead. Not surprisingly, the report found that a small number of private companies are anticipating certain segments of their workforce to shrink as a result of technologies like AI. However, this doesn’t imply that they’re accepting this as permanent, with many noting that they are focused on using these emerging technologies to augment existing roles and even create new ones in the years ahead.
The current digital transformation taking place across the market is not without its challenges, but private companies are recognizing the importance of anticipating and staying ahead of these challenges. While the potential long-term benefits of AI and automation are abundant, many private companies understand that these benefits can only be realized by preparing a workforce of the future.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.