Automation is a game changer that is altering the industrial landscape. A Committee for Economic Development of Australia publication estimates that over the next 10 to 20 years, 40% of jobs in Australia have a high probability of being susceptible to computerisation and automation.

Smart businesses will approach the automation process from the front end and engage with their workforce in a manner that ensures the business is able to harness all of the productivity benefits from automation, without suffering the industrial dissention and dislocation which so often coincides with dramatic workplace change.

Planning and practical implementation is critical

McKinsey recently published “A CEO action plan for workplace automation”, highlighting the benefits of business harnessing automation processes within their workforces. However, it cautions the need for an appropriate plan of action.

From an industrial relations standpoint, preparing for automation sooner rather than later can provide a business with payoffs down the track.

Where the opportunity presents itself for a business to enter into a carefully tailored enterprise (or greenfields) agreement prior to implementing automation measures, such an opportunity should be seriously considered. If timed properly, this will minimise the impact on the business from workplace change, and maximise workplace flexibility to allow the business to easily transition, saving time, cost and mitigating the risk of workplace disputes arising.

Left to the last minute, an enterprise may face pitfalls in implementing technological change. For instance, should a round of enterprise bargaining be imminent, employees and their representatives will push for greater job security during bargaining through superior redundancy and retention type arrangements. These could slow change, and add cost and complexity. Late engagement and consultation may also create resentment and cause further disputes and delays.

Where workforce engagement occurs early, these issues may not be so prevalent, and a business can ensure that it has the appropriate flexibility mechanisms in place to easily transition. As reported in The Australian recently, NAB’s Andrew Thorburn reflects on the importance of planning for NAB to “retrain and redeploy” workers post-automation. Clearly, planning can deliver the best outcomes for all stakeholders.

Enterprise bargaining in the post-automation world

There are implications on an employer bargaining for a new enterprise agreement (or for a greenfields agreement over a new enterprise) that will cover the business post-automation.

For example, the ability to influence new roles that will be required from technological advances comes with the ability for an employer to:

  • effectively bargain for terms and conditions off a fresh slate as post-automation roles may result in coverage of employees with vastly different terms and conditions
  • use a different modern award (if any) as a base for terms and conditions
  • provide an employer with greater leverage in bargaining through dealing with a smaller, more specialised workforce
  • bargain in circumstances where the agreement’s coverage will dictate which union (if any) has a right to represent employees.

Of course, the need to engage workers with a different skill set may also provide a business with an opportunity for workers to grow in their careers, and present an environment in which cultural change might be effectively promoted and achieved. Viewed through this lens, technical change need not be seen as a negative from an employee relations perspective.

Implementation of process

‘Redundancy’ is the word that comes to most employees minds when they catch wind of an employer taking steps to automate elements of their work.

However, despite many claims made to the contrary, major technological change does not necessarily result in a workforce being decimated. Opportunities are inevitably presented from change for employees to upskill in order to fulfil different roles in the business (or elsewhere).

Unfortunately downsizing a workforce is, in a number of cases, a necessary step in achieving the full productivity benefits that are so attractive in implementing technological change. Again, early and effective planning can minimise forced job losses, and maximise opportunities to upskill.

Transparency and appropriate engagement with employees is critical during the process, as is implementing an appropriate consultation plan.

In a world where so many businesses are moving to automation, failure to take these steps may result in your business falling behind its competitors, change (and its benefits) being seriously delayed, or the often significant capital costs required blowing out.

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