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How to Combat Inflation and Solve the Labor Shortage with Automation Done Right

Home » Digital Transformation » Intelligent Automation & RPA » How to Combat Inflation and Solve the Labor Shortage with Automation Done Right

Author

Eduardo Diquez

Managing Director of Intelligent Automation

With the tightest labor market since World War II, recession fears, rising wages, and inflation hitting a 40-year high, modern organizations face tough financial challenges. Forward-thinking business leaders are finding fast, effective relief in Robotic Process Automation (RPA) – closing skills gaps, driving down costs, increasing efficiency, and delivering new ways to attract and retain top talent. 

The U.S. job market shows more than 11 million job openings and only 6 million unemployed workers. Finding qualified people to fill their staff ranks as the biggest internal challenge confronting CEOs worldwide, states a 2023 Conference Board survey. 

An alarming 90% expect hiring challenges to impact their growth plans, according to an IDC FutureScape report. 

Retention is another top-of-mind concern for nearly 80% of executives, the 2023 Robert Half Salary Guide reports. Momentum behind quitting hasn’t waned since the Great Resignation of 2021: Even as Big Tech layoffs grabbed headlines in November, another 4.2 million people quit their jobs – marking the 18th straight month where 4 million+ workers left voluntarily. 

While inflation rates have dropped since the high of 9.1% in 2022, economic analysts expect inflation to remain a concern for the foreseeable future as well. Some 74% of CEOs ranked inflation as the biggest external concern for disrupting business strategy within the next 12 months, according to a Deloitte study. 

Not surprisingly, that’s left the C-suite doubling down on cost optimization efforts. CFOs ranked cost management (52%) and financial performance (50%) as their top priorities in 2023, with about a quarter of executives specifically focused on ways to improve processes.

Today’s economic challenges are causing a top-down reimagining of how work is done. And more and more business leaders are realizing the value of well-designed and intelligently deployed automation as a resilient, reliable way to help teams do more with the same resources, minimize waste, and optimize human talent across all industries.

Let’s examine how.

Closing the skills gap with automation

Interest in RPA predates the pandemic, but COVID challenges turbocharged demand. Companies scrambled to implement a cost-effective technology that delivered resilience amidst the abrupt transition to remote work.  

Since then, business leaders have expanded automation efforts to empower their workforces to work faster and smarter – driving better employee experiences and greater organizational output. 

RPA remains the fastest-growing software segment: Gartner reports the global RPA market surged 19.5% to nearly $3 billion in 2022. That double-digit growth is expected to continue – expanding at a whopping CAGR of 38.2% to approach $31 billion by 2030. 

Deloitte’s Global RPA Survey predicts near-universal adoption by the end of this year. 

Now, as businesses worldwide scramble for how to solve the labor shortage, automation once again stands as a fast, simple solution that doesn’t require an expensive overhaul of legacy systems. As 62% of executives feel poorly prepared to resolve the causes and impacts of high turnover, 78% plan to invest in automation to fill staffing gaps. 

Teams with limited bandwidth are closing their skills gaps with automation that completes time-consuming, mundane tasks while skilled employees focus on more critical and creative work. Examples abound – companies are using intelligent automation as chatbots that supplement help desk and customer service teams, to process documents faster, to increase the speed and accuracy of tedious back office Finance activities, and more.

A single software robot can typically replace 2-5 full-time employees and the work they perform, according to Grand View Research. When human intervention is required, attended robots can speed productivity by working alongside human staff as well; for instance, allowing customer service agents to spend less time researching and more time resolving customer issues by finding data in one application and automatically populating it into another during live calls. 

More than 70% of executives report automation saves their organization time, 59% save money, and 63% say it increases productivity, according to the UiPath survey.  

In a market plagued by high turnover, standardizing processes with RPA also reduces the risk of depending on knowledge retained by experienced team members to perform work.  

Boost retention and hiring with a more appealing work environment

Automation can help weather the labor shortage in another vital way: creating a more appealing work environment.  

By performing hated chores that prevent people from focusing on enjoyable and interesting work, 85% of executives believe automation can reduce turnover and attract new talent, UiPath reports.  

Forward-thinking companies are even turning to citizen developer programs to speed improvements to job satisfaction and productivity.  

Some 40%+ of mundane business processes fail to deliver ROI that justifies prioritization in a company’s RPA Center of Excellence (CoE). Citizen development tools like UiPath’s StudioX empower non-technical employees to eliminate these tedious tasks on their own by creating simple automations for themselves or their departments.

Automation training can give companies a leg up in today’s competitive job market as well. In an ever-evolving digital landscape, such opportunities offer tantalizing value to existing workers and prospects – helping them prepare for the future of work.

Lack of skills training ranks as one of the top 3 reasons people leave their jobs. Nearly three-quarters of workers said they would absolutely or probably leave their current job for another position that paid the same but offered better or more skills training.

And benefits derived from upskilling staff extend beyond hiring and retention: not only helping you maximize the potential of your automation program but also improving job performance.   

Inflation concerns have companies scrambling to do more with less

The most recent Consumer Price Index (CPI) shows inflation slowing. But prices were still up 4.9% on an annual basis, leaving little cause for celebration. 

Wage inflation is hitting companies across all industries. Amidst the double whammy of high economic inflation and a red-hot job market, 63% of executives plan to adjust compensation in hopes of gaining a competitive advantage, Gartner reports.  

Already at a 20-year high in 2022, salary increase budgets are expected to grow by an average of nearly 5% in 2023. By comparison, the average salary increase in 2021 was just over 3%. 

And 90% of organizations are even considering making two salary adjustments per year. 

While the C-suite searches for ways to slash spending, a recent Newsweek article asserts the “unprecedented technological advantage” and “historical opportunity” for businesses to retain margins amidst inflation with automation.  

PwC estimates that a whopping 45% of work activities can be automated, reducing the talent volume needed and saving $2 trillion in global workforce costs. ROI is often achieved in less than a year – enhancing value even more in areas like driving business goals relative to budgets, resource allocation, and cost management.

Before wage inflation, UiPath reported that addressing process inefficiencies and labor costs with RPA could deliver savings of 35-65% for onshore operations and 10-30% for outsourced work. Amidst the current talent crunch, some estimates place those cost reductions as high as 80%.

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RPA: a proven weapon for navigating economic uncertainty

Forrester forecasts that 10% of automation budgets will shift to resilience amidst inflation concerns this year. As the technology advances and confidence continues to grow, organizations are adding more sophisticated, AI-infused operational use cases to automate more complex tasks across the entire operations lifecycle. 

AI technologies are sparking a fundamental shift in RPA – automating human-like decisions within processes and enabling robots to learn as they go. 

RPA can improve agility in a challenging business environment as well – delivering accurate, real-time information that enables companies to react quickly to fast-changing conditions. These strategic insights can help executives identify vulnerabilities, quickly and easily audit processes and supply chains, predict the likelihood of future problems, and make informed business decisions.  

Automation also fosters brand loyalty and trust by improving customer experiences – for instance, resolving issues faster. And it can drive sales by targeting content marketing in real-time based on user behavior. 

In fact, automation investments can be directly linked to a 7% increase in business revenue for U.S. companies – translating into an extra $195 billion per month, according to a Centre for Economics and Business Research study. 

Future-proof your business with the right automation partner

With no industry spared the impacts of inflation and the talent crunch, enterprises need innovative and long-term solutions for staying competitive and productive. 

RPA stands as a critical hedge against tough financial challenges. While spending can seem counterintuitive in the current market, the pandemic proved that automation investments can futureproof your business as you navigate uncertainty: helping sustain operations without increasing headcount, enhance profitability, and lower long-term costs. Organizations are also closing their skills gaps with RPA. 

But while you’d be hard-pressed to find another transformation that delivers the same quick benefits as RPA, it’s no secret that 65% of initiatives stall at 10 or fewer processes. 

More than 60% of businesses are turning to outsourcers and RPA managed services providers to support their automation journey, according to Deloitte’s Global RPA survey – realizing the critical need for time and skills they don’t possess to optimize ROI and fast-track digital transformation successfully.

Quality RPA implementation firms have the expertise, best practices, and technology already in place to do automation right. RPA nearshore firms can also help you avoid the headache of recruiting and retaining hard-to-find automation resources, delivering consistent access to top talent via a deep pool of high-quality tech resources in Latin America and bigger CoEs that minimize turnover with desirable career paths.

With waves of economic uncertainty crashing down from every direction, implementing RPA right can give businesses the resilience they need to not just stay afloat but sail through future challenges.

Want to learn more about driving innovation and maximizing business performance with RPA? Schedule a consultation with our intelligent automation experts today!

Written by

Eduardo Diquez
Managing Director of Intelligent Automation
Eduardo is the Consulting Director of the Intelligent Automation Practice at Auxis, including the ongoing management of its IA Center of Excellence in Costa Rica. With over 10 years of experience in process improvement and finance transformation, Eduardo has a proven track record working with C-level executives in the design and implementation of back office optimization initiatives, with a deep focus on delivering long-term, scalable Automation Programs. Eduardo has successfully delivered over 200 robots to more than 30 different organizations across multiple industries including retail, financial services, hospitality, healthcare, and manufacturing.

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