Waiters, inspectors, receptionists, and groundskeepers beware. A new HSBC Global Research report found that these types of jobs each has a greater than 90% chance of being displaced due to automation within roughly the next 10 years.
Each of these types of work were given an Automation Risk Score of over 90% (out of 100) in the report and were listed among the jobs in today’s economy most likely to be lost to robots.
‘Mid-skill’ jobs which require training but little education have been the most likely to be replaced thus far, the report said. Food preparation, cleaning, driving, were the occupations with the highest mean probability of automation, according to OECD data cited in the report, which was written by Economist James Pomeroy and ESG Analyst Amy Tyler.
“This makes sense – these are roles that are typically low-skilled enough to be able to create the hardware or software needed to save the employment cost but high enough paid to justify building the robot. In supermarkets, whilst checkouts have seen a much greater use of technology, shelf- stacking hasn’t (cheap workers) and neither have store managers (not possible to do easily),” Pomeroy said in an interview with Yahoo Finance.
The automation of jobs has continued throughout the pandemic, as social distancing requirements have made some tasks more easily performed by robots. “The pandemic has accelerated the slow march towards automation of many roles,” the authors wrote. Shortages in the labor market have left many employers desperate for workers, human or otherwise. “The great labour shortages that have arisen all over the world have incentivized firms to invest in new processes to allow them to keep meeting higher demand without seeing costs spiral.”
The macroeconomic picture painted by the report was mixed. On the one hand, it is certain that jobs have been lost and will continue to be lost as a direct result of automation. On the other hand, certain jobs will be created by the technologies and improved production resulting from automation, the economists predict.
“[The speed by which jobs are displaced by automation] will vary a little bit... partly in terms of the ability to make those robots and how quickly that happens,” Pomeroy said. “But also, I think there's a cultural element of how willing we are to have certain jobs done by robots.”
Consumers derive satisfaction from seeing certain services performed by humans, he noted, and thus it would be unlikely to see robots taking over these jobs in the near future. However, shifts in the culture and public opinion could allow for automation to become a reality even in these industries.
“So the best example that I'm always giving is, you could make a robot today that can cut hair,” Pomeroy said. “But if you set up a robot hairdressing salon, in any city in the world, I doubt it is going to be very busy.”
The main obstacle to automation, in this case, he said is that “no one likes blades being near their head, controlled by a robot.”
However, this cultural preference may change over time as the public becomes less hesitant regarding greater automation in personal care services.
“What could theoretically happen over the course of the next few years is there might be a growing acceptance of people going, ‘Well, why wouldn't I let a robot cut my hair?’” Pomeroy said. “And then suddenly those jobs could get automated.”
Why do we see low unemployment, even as automation rises?
A 2020 report on jobs from the World Economic Forum predicted that by 2025, 85 million jobs may be displaced by automation, yet 97 million new roles may emerge.
“Over the medium term, jobs may be lost – particularly in those sectors where automation is relatively easy or affordable,” Pomeroy and Tyler wrote in the HSBC report. “Manufacturing, retail and logistics jobs may be the most at risk based on a wide-range of research, whilst some roles may be more immune – those that require skills that automated processes can’t do so well: idea generation, problem-solving, or people management. Equally, new technologies may spur the creation of entirely new roles or industries that could employ even more people – possibly in ‘better’ roles than those lost elsewhere.”
Nearly half of all workers in the U.S. are employed in low-wage work. Millions are truck drivers, retail workers in brick-and-mortar stores, food servers, and receptionists. Many of these could be performed by robots with current technology, Pomeroy said, but it has not yet become cost-efficient to do so.
“If you think about the level of the cost of building a robot to do a job,” he said. “And you think about the cost of employing someone to do that job, until they cross over, there's no point automating them. And for a long, long time, the cost of that robot has been ‘X’ and the cost of employing someone has been ‘Y’; ‘Y’ is considerably lower than ‘X’ in this environment.”
Even if, in the aggregate, more work is created, problems may still arise regarding job preparedness among the general population as well as the quality of those jobs. The money-making opportunities resulting from technology-induced increases in productivity may not provide the same security and fulfillment of previous occupations.
“A lot more people are going to have ways of making money that aren't necessarily employment in the traditional sense,” Pomeroy said. “So it's going to be people who are doing things by themselves. Technology allows self employment to happen much more quickly. You can see this in the boom in YouTubers, or Twitch streamers, or cryptocurrency traders … [and] podcasters. So you could see jobs being created, but you also could see ways of making money being created that aren't necessarily jobs that distort some of the labor market statistics, too.”
Pomeroy noted that even if a greater number of jobs or occupations are created due to automation, individuals who have lost their jobs could still be left behind. A skills gap between displaced workers and workers in the new economy fuels economic and social inequality, research suggests.
Certain industries have fared better than others. In the October job report, the biggest gains were in the leisure and hospitality (+164K new jobs), personal and business services (+100K new jobs), and manufacturing (+60K new jobs) sectors, while the government sector lost 73,000 jobs.
Looking forward, employees in some of these industries may be challenged by emerging technologies capable of replacing workers. The HSBC report found that the mean probability of automation in the hospitality and retail management sector was over 30%.
Skills training will be crucial to economies looking to protect workers at risk for job displacement from automation, the report found. Current governments are investing “way, way too little” in education around the world, Pomeroy emphasized.
“It's definitely gonna vary a lot [depending on] the country,” he said. “But I think the number one thing that governments all over the world and apps think about is much, much more investment in training.”
Greater changes need to be made in education systems in order to cultivate creativity and human-specific skills instead of ones easily reproduced by machine learning, he added.
“The problem is we have a lot of education systems across the world where we essentially train kids to be robots,” Pomeroy said. “You pass an exam by repeating something, you don't pass an exam by being creative and coming up with an idea and generating something new. You succeed academically by doing the exact thing we don't want people to do when they're at threat of automation.”
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.