Employers, it’s time to ask this daunting question: “How much does it cost to replace my workers with robots?”
It may seem unpopular and rather cold, but it’s a valid question that needs answering – and fast. There are countless futurists that will tell you this isn’t a question of morals, it’s simply economic.
Economists estimate that by 2025, the average manufacturing employer will pay 16% less for a robot than for an employee.
A tipping point is approaching where machines will become more efficient than humans within workforce niches. This is happening to jobs across markets, and not just in industrial settings. The biggest roadblock to this automation is learning how to customize and scale the technology to meet the needs of various corporations and industries.
One 2013 Oxford study had the goal to calculate the probability of which jobs will become fully automated, asking: How Susceptible are Jobs to Automation? Since then, there’s been a steady ramp up to meet these expectations.
Using information from the Oxford study, we’ve estimated the costs for “employing” a robot, including upfront and overtime expenses, along with the percent chance researchers found that these jobs will become fully automated. The following seven jobs are listed by how soon they will make the change, starting with those already affected.
1. Restaurant Order-Taker
Employees that take orders at restaurants will soon be replaced, as McDonald’s, Wendy’s and Wawa have shown. Waiters and waitresses in non-fast food restaurants are also likely to be impacted by the use of self-serve tabletop kiosks such as at Applebee’s. Customers order food on a touchscreen, eliminating the need to communicate their order. This increases the accuracy of the order and reduces the time it takes to provide service.
Employees are also notoriously paid little in this field, and their public fight for higher pay may accelerate restaurant automation. As the former McDonald’s CEO recently pointed out, “It’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries.”
- 93.7% chance to be fully automated
Cost of employee: The national average salary for a full time order-taker is $18,000/year. This doesn’t include the $15 minimum wage, already happening across the country.
Cost of machinery: The best estimate for an order-taking kiosk is a grand total of $10,540 over three years, broken down into $300/month. This is using the median price of a single kiosk at $3,440. One key consideration with this purchase, though, is the need for custom software to include branding and other unique features. A custom kiosk could run upward of $20,000 dependent on the software.
As the McDonald’s CEO has claimed, automation may reach jobs in other parts of the restaurant as well. Burger flippers and fry baggers could now be replaced by machines, and likely even runners and presenters, the employees who assemble and carry orders to the drive-thru window, could be replaced by present technology at a cheaper cost than minimum wage.
2. Meter Reader
Meter readers are required to be continuously on the go for checking the status of machines. The replacement for these jobs involves what is referred to as the Internet of Things (IoT) technology. Instead of having employees manually check the condition of equipment, micro-sensors automatically communicate what’s happening to the machinery so maintenance teams can access everything they need via mobile devices. This also allows for predictive technology to assign work orders just before something breaks rather than afterward, avoiding downtime.
We’ve covered a niche of this technology called Computerized Maintenance Management Software, which specializes in automating maintenance roles in a wide range of businesses.
- 86% chance to be fully automated
Cost of employee: The average national salary for a meter reader employee is $32,430/year.
Cost of machinery: One IoT vendor, Jasper, found each embedded device costs an average of $1.25/device/month including the price of data usage. But, additional charges include the upfront cost of new hardware and ongoing administrative fees for IT support, which depends on the number of embedded devices. One small town in New Hampshire invested in IoT water meters and spent $750,000 on installations.
3. Retail Salesperson
Target has gotten the most attention for automating retail sales jobs through its partnership with Techstars, a startup accelerator company designing robots for use throughout Target stores. By examining customer buying habits and supply chain data, the robots are poised to replace entry-level retail positions. On the ground, they’ll likely be able to direct customers to what they’re looking for, stock shelves and check prices. Other capabilities may include analyzing that data to upsell products and balance inventories. This same concept can be applied in any shopping environment. It’s best demonstrated in e-commerce by user interface advancements for guiding visitors to what they want as quickly as possible.
We’ve featured this technology through AllRecipes and its partnership with Tableau Business Intelligence (BI) software. The cooking recipe site is designed to respond to a user’s interests in real-time for suggesting recipes the user will like.
- 92.3% chance to be fully automated
Cost of employee: Using Target as an example, employees are paid $9/hour, adding up to $18,720/year for a full time entry-level worker.
Cost of machine: The cost savings on using robotic retail workers includes eliminating overtime and holiday pay, as well as the challenge of hiring seasonal workers. While the total price of creating these robots remains a mystery, one has been released named Tally whose purpose is to replace up to 30 man hours per week in a medium sized store.
4. Property Manager and Real Estate Agent
Technology is making property managers and real estate agents obsolete. When a great deal of real estate is owned by one entity, it often needs a service to manage the properties and tenant relationships. This helps staff easily address issues with maintenance, lease arrangements and vacancies. But now, Web-based software is becoming a hub for residents to directly access what they need online without relying on staff. Maintenance requests no longer require a middleman to coordinate a contract with a plumber, lease agreements are automatically generated when the time comes to renew and real estate agents are no longer needed when the buyer has done research ahead of time.
Real estate and property-related agencies are investing in better software to increase their own administrative efficiencies and remain viable as some owners are finding it easy and cheap enough to do themselves. Another result is that common solutions used in the past, such as QuickBooks, are becoming less popular due to the financial tools included within Property Management Software.
- 86.4% chance to be fully automated
Cost of employee: The national average salary for a property manager is $45,082/year.
Cost of machine: The technology replacing this job largely exists in the cloud and is offered through a subscription service. Prices depend on the number of property units and can be as low as $1.25/unit/month.
5. Library Technician and Archivist
The way modern businesses store their content has quickly evolved, thanks to the digital archiving systems libraries use. And many of these systems will likely lead to certain library jobs becoming obsolete, including technicians and archivists.
Digital archiving isn’t just happening in public libraries, but also in hospitals, banks, and corporations everywhere. Similar software helps eliminate various paper-pushing roles in jobs all across industries where Document Management Software (DMS) is relevant. This development started with libraries because that’s where the need for the software originated. DMS solutions mirror how books are stored in libraries by genre, author, abstract and other metadata within MODS, the code that most DMS solutions are built on.
As these archiving systems have become more sophisticated and widespread, having digital versions of key documents has become a necessity for companies everywhere. It’s now common to open up office space by destroying physical documents, then encrypting and backing up entirely digital libraries.
- 75.9% chance to be fully automated
Cost of employee: The national average salary for a library technician is $32,760/year.
Cost of machine: Document Management Software can either be paid for as a subscription service where documents are maintained and stored in the cloud, or through a licensing contract where the documents are hosted and secured on-premise by your company’s own IT team. The costs between the two options varies, but can be as low as $400/user/year for cloud-based services or $5,000 upfront and $300/user/year in licensing fees for on-premise.
Auto-dialers have existed for a number of years, already automating part of a telemarketer’s job, and speech recognition has advanced beyond your smartphone’s capabilities.
More recently, there’s been an emerging type of technology focused on replicating human speech called natural language processing. Google has just released and open sourced SyntaxNet, its natural language understanding (NLU) software, allowing the technology to be free to use. Expect voice-generated services to explode in the near future so that robocalls will rival the quality of human calls.
- 99% chance to be fully automated
Cost of employee: The national average for a telemarketer’s salary is $19,600/year.
Cost of machinery: The best present example we have of an existing bot with these capabilities is IBM Watson. Telemarketing is typically offered as a service, so there will be a shift from paying employees an hourly fee to paying a service fee for using a tech company’s mature artificial intelligence (AI) bot. To build your own Watson, though, takes approximately $32 million. We’ll see how this market evolves.
7. Writer and Journalist
Nearly the same technology automating telemarketing jobs is affecting writing jobs. Human language is transforming into the output of carefully crafted algorithms.
Baseball journalism was the first to automate writing through game stories, reporting on the statistics and narrative with a formula. The increasing intelligence of natural language processing will only amplify the use of automated writing. In fact, machines are being taught to write an array of pieces, such as fairy tale stories and essays. There’s an ongoing debate as to whether this will stifle human creativity or enhance it.
- 88.8% chance to be fully automated
Cost of employee: To have an in-house editor full time costs a national average of $49,679/year. Freelancing is another form of employing writers that has a wide price range between $10 and $45+ for 500 words, depending on the reputation of the author, how long it takes to write an article and the topic.
Cost of machinery: Expect the technology to first compete with freelancers across solicitation sites at a low of $1.25 for 500 words. The price will rise for higher-quality writing, but it’ll still likely be cheaper than most freelancers’ work, costing closer to $10 or less for 500 words. The cost of owning your own editorial bot that perfectly mirrors human-quality work, though, is likely closer to the price of IBM’s Watson.
The Bottom Line:
These jobs are poised as the first to replace human workers because the scales are tipping toward lower costs for maintaining machines than for hiring people.
There may always be an administrative level that requires a human touch, but in time, many of the entry-level positions that most affect customers will largely be replaced with machines for efficiency.
The challenge for this technology will be to find a balance between custom-built and out-of-the-box products. Considering how sophisticated these machines must be, most businesses are building what they want from the ground up, which increases costs and slows development. But it’s only a matter of time before this process becomes cheaper and easier, causing automation to rapidly occur for jobs everywhere.