Labor Shortages: Why Automation Is a Necessity in Today's Economy
few years ago, we witnessed the death and resurrection of the Twinkie. In 2012, Hostess Brands filed for bankruptcy and stopped production. They could no longer make a profit with their snacks. Then another company picked up the name and returned the Twinkie to store shelves the following year.
Why did one company succeed where another folded? While 19,000 employees who belonged to several different unions made the original Twinkie, a highly automated process that reduced the workforce by 95 percent was behind the resurrected version. The Twinkie was reborn through automation.
Facing rising labor costs and a growing shortage of skilled workers, companies that can’t automate may go the way of the Twinkie.
Over the next 30 years, the gap between retiring baby boomers and new workers will continue to widen, creating labor shortages across industries. The United States could be short 35 million college-educated workers by 2030.
At the same time, wages are on the rise. Factory wages in China increased 19 percent from 2005 to 2010, and new U.S. laws are raising the minimum wages in some states to $15 per hour.
Like many other trades, the cleaning industry is feeling the heat. About 80 percent of the costs for cleaning goes to labor, so shortages and prices have a substantial impact on businesses.
Not many find cleaning jobs very satisfying. When girls dream about being Cinderella, they speak of fairy Godmothers and glass slippers, not wet mops and wooden buckets of soapy water. My grandmother who raised me in Morocco was a cleaning lady and wanted more for me. So it’s not surprising that turnover rates are as high as 70 percent, which in turn requires companies to spend money recruiting and training new employees.
If companies are having trouble keeping the workers and being profitable, they must explore automation to survive in today’s economy. No matter the industry, robots are becoming a bigger part of our economy. Researchers believe 47 percent of occupations could possibly be automated within 20 years.
The automation revolution is already happening. Tablets are now taking our food orders at our airports instead of waiters. While you think Uber was innovative in providing on-demand transportation, they’re already experimenting with driverless cars.
Automation will improve labor efficiency and provide additional savings in other categories of resource usage. In the cleaning industry, automated floor cleaners will eliminate the need for keeping the lights on for night cleaning crews, reducing energy usage and costs.
Another benefit is fewer mistakes and improved safety. Instead of relying on humans to dilute concentrated cleaning solutions, ready-to-dispense products can do the job right every time. This low-tech automation protects workers from exposure to hazardous products and ensures the safety of our environments.
Labor-intensive jobs will continue to evolve with advances in automation. Bank tellers have not gone away because of the automated teller machine, and toll booth attendants have not become extinct because of E-ZPass. It’s not about replacing people but providing employees with tools that eliminate some of the repetitive tasks so they can instead focus on problems that are truly essential for the business — those that require their talent and ingenuity to solve.
At Sealed Air, we believe automation is essential to creating a sustainable future. We have helped a multinational discount department store chain save over $7.5 million annually by improving its operational efficiency and automating its cleaning process.
And it’s not just in the cleaning industry. Our Product Care division has helped a major consumer electronics manufacturers reduce packaging labor costs by 35 percent with automated packing systems, and our Food Care division has helped a leading South American food processor convert to an automated process for deli meat packaging and decreased labor by 94 percent.
Businesses that leverage automation will have an advantage as we face rising labor shortage and costs. Automation allows us to become more sustainable, improve our operational efficiency and, ultimately, improve the standard of lives for many around the world.
To learn more about how automation can help your business, read “This Multinational Department Store Chain Saved $7.5M by Improving Labor Productivity in Its Cleaning Processes.”