Automation expected to cut workforce needs by 25% at IT services firms

That automation will take jobs is a well-established labor market truism. For instance, in 1949 there were 182,500 people employed as telephone operators. That was the peak year for that profession. By last year, the number of operators employed by wired telecommunications carriers had declined to 2,170, according to federal labor data.

A similar fate is about to befall people who do back-office IT services work. Thanks to automation improvements, dramatic cutbacks in IT services personnel are being forecast, according to a survey of representatives of about 170 global sourcing firms. This includes the IT services industry.

In a poll of attendees of the Sourcing Industry Conference (SIC) in late September, nearly one-third of the respondents said that they expect at least 25% of the jobs in their current workforces to be cut by 2020, according to SIC organizer Information Services Group (ISG), a research and advisory firm.

Meanwhile, 23% of the respondents predicted that 15% to 25% of their jobs would be cut, and about 28% said they expected cuts ranging from 5% to 15% of their head count. Only 5% of said that they expect employment levels to grow.

Rob Brindley, a director at ISG, said improvements in automation, as well as continuing improvements in the capabilities of people, are bringing higher reliability and stability to IT systems, reducing calls for support. "Automation is going to be working in the background, evaluating events and incidents and resolving them before there is a customer impact," said Brindley.

There also tools being developed, such as IPsoft's Amelia cognitive engine, that can also be used to either augment or replace workers as time goes on.

The decline in telephone operator jobs has been offset by employment growth in new industries. It's not clear whether the jobs replaced by automation in the years ahead will be offset by growth in new technology areas. While demand is expected to increase for higher-skill jobs, there could be fewer overall jobs.

In a 1955 Congressional hearing on "Automation and Technological Change" (PDF) lawmakers and experts discussed the impact of automation on the workforce, and the decline of some types of jobs.

"I see only benefits in the long run," said Vannevar Bush, president of the Carnegie Institution, regarding automation.

But "it is a different story when it comes to the individual," Bush told the Subcommittee on Economic Stabilization. "There may be an overall public benefit in a particular move, and at the same time distress and hardship for individuals."

Copyright © 2015 IDG Communications, Inc.

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