Automation: Benefits for Worcester companies, but real concern about possible job losses

Experts agree that automation is here to stay, and is good for business in many ways. But one Worcester business owner is concerned about societal impacts, including potential massive job losses.

WORCESTER — Carl Sjogren is concerned.

Sjogren is the fourth generation in his family to own Sjogren Industries, a company on Southbridge Street that makes tools for the wire industry.

To survive in the global economy, Sjogren turned to automation. It accounts for 70% of his operation, and Sjogren doesn’t regret his decision because it makes his business run more efficiently and remain profitable.

However, Sjogren worries what the future holds. Automation could displace millions of workers worldwide, a scenario that is bad for business.

As Sjogren sees it, we live in an interconnected economy. If there is massive job loss and economic instability, the companies that buy Sjogren’s products will cut their orders.

“Me as a business owner, I have a big concern about what’s going to happen. I see the problem (of automation) coming, but I don’t know how to fix it,” he said.

Benefits and drawbacks

Automation has its benefits, according to business owners, labor groups and academicians who spoke with the Telegram & Gazette. It frees up workers from mundane, repetitive tasks so they can perform highly-skilled functions that provide an increased sense of satisfaction.

One example is a robot in the pharmacy at the Edward M. Kennedy Community Health Center in Worcester. It helps process prescription orders so staff can focus on other tasks.

“It saves time instead of a hand count (of drugs),” said Pharmacy Director Kim Seigler of the robot that has assisted staff for the past 2o years. ”Its accuracy isn’t perfect, but it’s pretty close.”

Seigler noted safety measures are in place to catch infrequent errors.

These same experts interviewed by the T&G acknowledge drawbacks to automation, namely displacement of workers in some industries. And those workers will have to be “reskilled” in order to remain employed.

“Reskilling” is a word that appears prominently in a state report released last year by the Baker administration titled, “Preparing for the Future of Work in the Commonwealth of Massachusetts.”

It stated COVID-i9 accelerated automation, e-commerce and digitization.

If these trends continue, up to 400,000 Massachusetts workers will need to be reskilled for new types of employment by 2030. Of that total number. 75,000 will need to jump multiple wage levels over the next decade to remain employable, primarily due to faster adoption of automation.

Industries named in the report that stand to benefit from automation include health care, professional, scientific and technical services.

Losers in terms of the greatest number of jobs lost include retail, finance, insurance, hospitality and food services.

“Automation is good when it’s used to help workers and help build communities,” said Steven Tolman, president of the Massachusetts AFL-CIO, a major labor organization. “But when it’s used as an avenue to cut costs, lay off workers and depress wages, then we have a problem.

“It comes down to how automation is utilized. Is it to reskill or retrain, or more to line the profits of business owners?” he said.

The 4,000 members of the Retailers Association of Massachusetts believe automation is a “good option,” Jon Hurst, RAM president, said.

But it comes with a caveat, Hurst cautioned.

“It serves the consumer in good ways, but there are implications, and it could have some impacts on jobs going forward,” Hurst said.

Time to slow down

It might be time to take a hard look at the quick pace that companies adopt automation, said Bryant Richards, associate professor of accounting and finance at Nichols College and director of the school’s Center for Intelligent Process Automation.

Last month, the college announced a collaboration with an Israeli company called NICE to establish the CIPA, where students will learn automation tools provided by NICE as they work to become the next generation of leaders in robotics.

While Richards sees the benefits of automation, he also recognizes potential downsides.

Based on his research, Richards said 5o% to 75% of entry-level jobs in accounting and finance could be eliminated by automation in the years to come. What worries Richards is how those workers will acquire new skills to remain employed.

To get a handle on this challenge, Richards believes all the players in the automation game — government officials, lawmakers and industry executives — need to slow down the pace of automation and develop a plan to protect workers.

“There are pros and cons to this,” Richards said. “The pros are to create better value for the stakeholder. Higher (corporate) margins, better jobs that are valued, better value for the customer.

“However, I see clearly there is going be a possibility of a very disruptive and damaging time. If we quickly move, and we’re not prepared as a society, lots of folks will be looking around for work, asking ‘What is my vocation? What is the next job?’

“My concern is there’s not a clear map of where we’re going to go. That we can’t prepare and reskill folks into roles. The speed of this is the biggest challenge.”

Too fast out of necessity

One business owner who doesn’t entirely agree with Richards’ take on the pace of automation is Liora Stone.

Owner and president of Precision Engineering LLC. in Uxbridge, Stone relies on automation to keep her business running.

“I don’t agree that automation is going too fast. It’s going fast out of necessity,” said Stone.

The high cost of doing business is a primary reason for investing in automation, said Stone. Without it, Stone worries she can’t stay competitive as an advanced metalworking contract manufacturer.

“I have automation to stay competitive and keep jobs here, to keep them from going elsewhere,” she said.

Fifteen years ago, Stone had 50 employees, compared to 35 today. Automation cut her ranks, but it doesn’t explain the whole picture of why she has fewer workers.

Stone has a hard time finding workers with the necessary advanced manufacturing skills to oversee her machines.

That is a big irony in automation. While some worry about job losses, business owners like Stone and Sjogren want to hire more workers, but hit roadblocks because it’s a tough sled to find candidates who can competently program and run the machines.

“It’s what keeps us up late at night,” Sjogren said as he described spending $1 million on a new machine while having trouble finding the “$100,000 guy” to run it.

“They’re not easy to find,” he said.

Next generation

Worcester Technical High School is training the next generation of workers to run these million-dollar investments.

Roughly 1oo students enroll in the school’s robotics and automation technology department each year, said Michael Meagher, who heads the department.

If students stick on the automation track, Meagher said they will make a very good living. One former student who attended WPI is in line to start a job that pays $16o,ooo annually.

And while the days of good paying jobs as a machine operator with limited skills are largely over, Meagher said, there are other lines of work to fill the void. They include plumbers, electricians, carpenters and bricklayers. But many students don’t want those jobs, Meagher said, even though there is a great need for them.

“Is automation for everybody? No,” Meagher said. “But if they accept (the education path) and see it to fruition, they do very well (financially).”

Another academic perspective is offered by Walter Towner, WPI associate teaching professor of industrial/manufacturing engineering and operations management.

Towner noted the high cost of doing business in New England, and corporate concerns about protecting intellectual property as driving forces behind automation.

Ultimately, Towner sees automation as the vehicle for generating sales, making profits and putting highly-skilled workers in the driver’s seat.

“Someone has to program the automation and maintain it. There’s a tremendous advantage for the employee who manages that.

“The old days of automation and letting people go, it’s not like that. The head counts are the same. It’s about how much more we get out of the head count. I can’t imagine a downside to this,” he said.

Sjogren imagines one, while embracing automation.

It saves him money because the cost of making one tool equals the expense of making 100 if he didn’t automate his factory.

Secondly, Sjogren expects to hire four additional staffers this year to program and run his ever-growing stable of machines. That point is an example of how automation is growing jobs, not cutting them.

Lingering concern

But unlike Towner, Sjogren said he does see a negative consequence to automation, and it’s a concern.

“My concern is the social and economic upheaval this can create.

“If people lose their jobs, where does this ultimately take us? What am I doing to protect my business against these things?”

Contact Henry Schwan at henry.schwan@telegram.com. Follow him on Twitter @henrytelegram