Why Companies Are Replacing Human Employees With Robot Employees
For years, the idea of robots replacing human workers sounded like science fiction. Today, it is becoming a business strategy.
Companies aren’t simply adopting robots and artificial intelligence because the technology is exciting. They are looking at the numbers.
For many corporations, employees represent one of their largest ongoing expenses. When a company hires a human being, it isn’t just paying a salary. It is paying for the entire cost of employing that person.
The True Cost of a Human Employee
Here are some of the biggest employee-related expenses corporations have to consider:
1. Wages and salaries — Usually the largest direct expense.
2. Health insurance and benefits — Medical, dental, vision, retirement contributions and other benefits.
3. Payroll taxes — Employers pay Social Security, Medicare, unemployment taxes, workers’ compensation and other employment-related costs.
4. Employee turnover — Recruiting, interviewing, hiring, onboarding, training and lost productivity can become expensive when employees leave.
5. Overtime and premium pay — Companies may have to pay significantly more when employees work beyond their regular schedules.
6. Training and development — Employees have to be trained, retrained and sometimes certified as their responsibilities change.
7. Paid time off — Vacation, holidays, sick leave and other forms of paid leave are additional costs.
8. Technology and equipment — Companies may have to provide employees with computers, phones, software, workstations and other equipment.
9. Facilities — Employees require physical workspaces, utilities, supplies, security and other infrastructure.
10. Employee relations and compliance — HR administration, investigations, legal expenses, accommodations and compliance programs can also add to the cost of maintaining a workforce.
Now compare that with a machine.
A robot doesn’t need health insurance. It doesn’t take vacation. It doesn’t call in sick. It doesn’t ask for a raise. It doesn’t quit. It doesn’t need a performance review.
It does, however, need maintenance, electricity, software, repairs and sometimes human oversight.
That distinction is becoming increasingly important to corporations.
The Robot Employee Doesn’t Collect a Paycheck
Imagine a company spends $80,000 a year when an employee’s salary, benefits and other employment costs are combined.
Now imagine the company can invest in an automated system that can perform a significant portion of that person’s work.
The machine isn’t free. The company may have to spend hundreds of thousands of dollars on equipment, installation, programming and maintenance.
But if that investment can reduce labor costs over several years, the company may ultimately save money.
That’s where the business case for automation becomes difficult to ignore.
The question isn’t necessarily:
“Can a robot replace this employee?”
The question is:
“Can this technology perform the work at a lower total cost?”
Robots Don’t Need Overtime
One of the biggest advantages for corporations is availability.
A human employee has a limited workday. Working additional hours may require overtime pay. Employees also need breaks, days off, vacations and sick leave.
A machine can potentially operate for extended periods with minimal interruption.
That means a company could potentially get more production from the same investment without paying overtime.
Robots Don’t Have Turnover
Employee turnover is another major expense.
When someone leaves, the company has to advertise the position, interview candidates, conduct background checks, onboard the new employee and train them.
During that transition, productivity can suffer.
A robot doesn’t submit a resignation letter.
Once installed and properly maintained, it can continue performing its assigned task without the company having to recruit its replacement.
The “Employee” May Not Even Look Like a Robot
When people hear about robot employees, they often imagine machines working on an assembly line.
But automation is moving into the office as well.
Artificial intelligence and software can perform tasks involving data entry, scheduling, document processing, customer service, information analysis and other repetitive administrative functions.
So the next generation of “robot employees” may not have arms, legs or a face.
Some may simply be software operating inside a company’s systems.
Why Companies Are Paying Attention
Corporations are constantly looking for ways to reduce expenses while increasing productivity.
If technology can perform a task faster, continuously and at a lower long-term cost than a human employee, companies have a financial incentive to use it.
That doesn’t mean every human job will disappear.
Instead, the workforce could change dramatically.
Some jobs may disappear. Others may require fewer employees. And entirely new positions could emerge in robotics, artificial intelligence, maintenance, programming, cybersecurity and technology management.
But the fundamental calculation remains the same:
Human employees cost companies money every day.
Technology costs money too.
The difference is that companies increasingly have the ability to make a direct comparison between the two.
And as robots and artificial intelligence become more capable, corporations may increasingly ask themselves one uncomfortable question:
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