3 Reasons Robots Will Steal Only Half of Service Industry Jobs

Robot Waitress

A guest column from Brent Skinner, principal in the Global Thought Leadership and Advisory Services division of Cornerstone OnDemand.

Employers in retail and similar industries may be tempted to automate customer-facing jobs and otherwise replace staff with increasingly capable robots. That’s their prerogative, but they must make sure they’re OK with the kind of company they’ll become and clientele they’ll attract. Meanwhile, they can expect natural pushback. Therein lies the rationale for retailers and the like to invest in a sound talent and learning strategy.

Brace yourself: The robots are coming, and they’re coming to take away some jobs. Under the guise of kiosks, in fact, some clever robots have already taken jobs away from cashiers. Other jobs will fall prey to robots’ unbridled ambition, too. But after the last battle of the coming robot wars is fought, robots will have taken away only about half of our jobs—in retail and similar industries, anyway.

Guest column: Many employers are tempted to automate customer-facing jobs. They must make sure they’re OK with the kind of company they’ll become. @CornerstoneInc @BrentSkinner @HR @HRTech Click To Tweet

Why? It’s all about human nature. A natural ceiling on robots’ “employability,” human nature is a factor that retailers and others must face in determining just what kind of “employers” they want to be as they face the prospect of automating jobs heretofore traditionally held by people. In the meantime, the people who buy their stuff aren’t going away, and not all of them will take kindly to the robots. Retailers and the like would do well to review and fine tune their learning and talent management strategies. This way, their people will be prepared to compete with robots for clientele. That’s because for at least three reasons it would be bad for business to bet on a rout in favor of the robots.

‘No one agrees….’

Brent Skinner
Cornerstone OnDemand’s
Brent Skinner

First, let’s give credit where credit’s due: It’s not even the future yet, yet the robots are already confusing our smartest people. In early 2018, MIT Technology Review looked at a smorgasbord of studies by the likes of Gartner, PwC, Forrester, World Economic Forum, the International Federation of Robotics and others all predicting the impact of automation, robotics and all-around artificial intelligence (AI) on jobs over the coming years. Even when excepting the outliers forecasting all doom and gloom, the publication encountered projections running the gamut and concluded that “no one agrees” how many jobs we’ll lose to automation—just that it’ll probably be a large number.

Reason #1: Market Segmentation

Given the facts on the ground and the research, it’s not hard to understand why our coming robot overlords aren’t exactly worried about us. But everyone—robots and people—will always have to answer to the invisible hand of the free market. And the market will have something to say about robots’ place in the law of supply and demand. Depending on the kind of company they want to become, the best play for many will therefore be to invest in their employees—their talent—to cater to consumers who’ll reject, with their dollars, the idea of interacting with robots instead of people.

There will be lots of these people, by the way—as well as lots who couldn’t care less. This is because of market segmentation. A bifurcation, at the least, is on the horizon.

Think about restaurants. Think about the hospitality industry, what it comprises and all its offshoots—leisure, amusement, tourism, basically any industry where many employees are in customer-facing roles. You have your low end and your high end and what’s in between. Not all customers will care about interacting with a human. Some will just continue to want the most they can get in exchange for the least amount of money. These customers will gladly operate a kiosk to complete their order. We already know this from the success of automats in the mid-twentieth century—and that was without robots. Or, take something perennial, like college students partying. In a galaxy not too far away, a bunch of co-eds of a legal age to drink in a university town will gladly accept a cocktail from a robot bartender.

In other words, in retail and similar industries there will be a market for making a profit without employing people. But plenty of consumers will balk at this as they seek something more… authentic. Take the man taking his wife out for dinner for their 30th anniversary. Where’s the romance, the visceral human experience, in ordering a glass of the house’s most expensive red from a machine? For that matter, when would anyone call a restaurant the “house” where everything is automated, bereft of the human touch robots can’t deliver?

The demand for human beings will evolve even as it proves stubborn. In these same industries we will see a commensurate availability of jobs for humans at companies that recognize the business value of becoming integral to their employees’ careers and train them at relatively low cost to provide high-touch work and attract customers who’d rather interact with real, live people.

Reason #2: The Service-Profit Chain

Really a subset of Reason #1, this nevertheless merits its own section. A long train of analysis and overall smart thinking in the service industries has identified and established a replicable, symbiotic, correlative relationship between your staff’s satisfaction with their employment and your customers’ satisfaction with you. Put differently, the happier your employees are in working at your store, hotel or restaurant, the more engaged they’re likely to be with your clientele. This positively affects whether your customers will like your store, buy and come back later. Analyzed and explained over many years by Harvard Business Review, the dynamic goes by the term Service-Profit Chain.

If you want to break this chain, then go for it—at your own risk. The Service-Profit Chain provides powerful rationale for the aforementioned, coming bifurcation. What’s the one ingredient common to all Service-Profit Chains? People. Not to be cute, but will a robot ever be satisfied with its job? No, it won’t, because a robot has no sentience and, therefore, no concept of the fact that it’s working, let alone that there just might be an alternative to the job it has.

At first blush, this might seem to be a welcome development, but a funny little twist on the Service-Profit Chain strongly suggests otherwise. All this employee satisfaction and its positive effect on the customer experience and, down the line, sales revenue—all detailed in the Service-Profit Chain—hinges on this satisfaction’s lifeblood: real, live human beings. Remove human beings from the mix, and you may save money operationally over the short term, but you’ll also lose customers who visit your locations not only for the product or service, but for the human experience that brings them back.

Yes, it’s a quaint little notion that a potentially large segment of retail consumers actually want to interact with people as they buy things. This isn’t the local fast food joint—an eventual, potential stronghold of the robots. But will robots rule the roost in fast-casual dining? Service industry players will learn that the demand in supply-and-demand is multidimensional. A self-checkout kiosk will suffice for some transactions and, for others, be a woefully inadequate substitute for a decidedly human experience for customers all the way to the point of purchase.

Reason #3: La Résistance

The Borg—half-human, half-robot beings from Star Trek—used to tell everyone they encountered, “Resistance is futile.” They meant it was useless for anyone—especially any human—to attempt to evade assimilation into their emotionless, robotic collective of frightening sameness.

Is resistance futile in the world of work as robots march inexorably to hegemony? Perhaps in the latest dystopic science fiction novel du jour it is, but again, we’re not in the future yet. Resistance is natural and, if you’ve read this far, you’ve learned it’s anything but futile.

The Luddites of the nineteenth century might have been on the wrong side of history—and just plain wrong, period—but their counterparts today have a good point. There are these things called unions and the basic human nature behind them which yearns and, more important, fights for the meaning that gainful employment brings. Say what you will about the soul-crushing tedium or other bad conditions some jobs bring. In the coming robot wars, we’ll cede the least valuable ground, the work that brings the least gratification to the soul. We’ll let the robots have those jobs. As for the rest of the jobs, the machines will pry them from our cold, dead fingers. Viva la résistance!

Surviving the Coming Robot Wars
as Employers Employing people

If you believe the AI experts, robots will one day think and feel. If they do, we’ll have concerns greater than whether they’ll take away our jobs. Read Robot Dreams by Isaac Asimov, for proof. Fortunately, we have time, and in this time employers in retail and related industries should exercise their agency in affirming that they continue to go by the very moniker of “employer”—by investing in their people. There’s plenty of rationale. The robot wars are coming, yes, and when they do, employers in these industries will have to pick a side. Upon us, finally, will be the urgency to address, once and for all, the existential question of what it means to be a company. The answer will be about much more than dollars and cents—as important as they are to employers and their employees.

Brent Skinner is a principal in the Global Thought Leadership and Advisory Services division at Cornerstone OnDemand. Previously, he was principal analyst at Nucleus Research, covering HCM technology. He also helped shape and support executive thought leadership for Dayforce and other lines of business at Ceridian. This guest column adheres to our editorial guidelines but does not necessarily reflect the opinions of the editors.

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