Aotearoa’s changing workforce

As automation becomes increasingly more common in businesses across New Zealand, we are starting to see the ‘redefinition’ of roles in the workplace. This change is happening at a rapid pace and demands a deliberate and strategic approach from New Zealand HR leaders to ensure that this change enriches, rather than undermines, the workforce.

Reshaping roles and rethinking processes

Automation is a catch-all phrase for the technologies that shape how we work and how work gets done. It includes generative AI (Gen AI), process automation, machine learning and advanced analytics. Combined, these technologies reduce repetitive tasks, provide real-time insights for smarter decisions, streamline workflows, and give businesses the ability to shift focus from day-to-day operations to innovation and growth.

In the United States, companies like Amazon are heavily investing in automation, which has significant implications for its workforce of 1.6 million - roughly the population of Auckland. The company employs over 750,000 robots in its fulfilment centers to handle tasks such as moving shelves, picking items, and sorting packages. AI models predict demand, optimise inventory placement, and streamline supply chain management, ensuring items are stored in optimal locations to reduce shipping times and costs. Additionally, AI and computer vision are used to detect damaged products before they are shipped, while autonomous technologies like drones and self-driving vehicles are being developed to automate last-mile deliveries, further boosting speed and efficiency.

It’s easy to see how automation could make a big difference in New Zealand too. Despite being at a nascent stage, our country has traditionally been seen as an early adopter of automation technologies and we are already starting to see this in action. In farming, for example, AI is being used to scan kiwifruit orchards, checking on vine health, spotting diseases, and predicting yields more accurately. In logistics, shipping companies are using AI to streamline their operations, cutting down on manual work and boosting route efficiency. And let’s not forget the chatbots many of us have interacted with - they’ve come a long way from being frustratingly basic to increasingly helpful in handling routine queries and responding to more difficult, nuanced questions.

How does automation impact the workforce?

While these advancements are encouraging, it is important to consider their consequences for our workforce. To do this, we need to step back and look at the bigger picture. For years, we have had persistently low productivity in New Zealand that has refused to grow. This means that each unit of work produced by workers in New Zealand has relatively low output compared to our OECD peers and continues to decline. In parallel, New Zealand is grappling with a "brain drain" as skilled workers across all sectors leave for better opportunities abroad. This exodus, exacerbated by events like COVID-19 and sluggish economic growth (GDP reducing 0.2% in the June 2024 quarter¹), has resulted in a shrinking talent pool with fewer people to handle an increasing volume of work. Given these challenges, improving productivity, and bridging the skills gap through automation is more important than ever.

While automation can be used to increase productivity and help address labour shortages, its impact on the workforce will be multifaceted. According to the Treasury report on automation technologies in New Zealand², there are three primary ways in which these technologies will shape the workforce:

1. Displacement effect: automation will replace certain manual and routine tasks, potentially leading to job losses or a shift in employment opportunities. For instance, roles that involve repetitive tasks, such as data entry or basic customer service, are likely to be automated, affecting those currently employed in these positions.
2. Reinstatement effect: as new technologies emerge; they create demand for new skills and roles that didn’t exist before. This includes jobs in AI development, data science, and machine learning, which can offset some of the displacement by creating new employment opportunities that require more advanced skills.
3. Productivity effect: automation can enhance the productivity of existing roles, enabling workers to focus on higher-value tasks. This means that employees can move away from repetitive or time-consuming activities and focus on strategic, creative, or problem-solving aspects of their jobs, potentially leading to higher wages and better job satisfaction.

Employees will experience the impact of automation differently based on their roles. Businesses have a responsibility to help employees adapt, as the nature of work is evolving rapidly. As automation and AI make certain tasks redundant, workers must acquire new skills to stay relevant and avoid being left behind. While jobs will remain, they’ll evolve, requiring fresh skills and adaptability. This transition is crucial, particularly for vulnerable groups like low-skilled or older workers, who disproportionately occupy roles that will experience automation in the first instance. New Zealand’s remote location and relatively small population prevent us from relying on cross-border talent to meet workforce demands. Developing and keeping employees in work will be a key focus to avoid adverse outcomes like high social dependency and a reducing skilled workforce. HR leaders will be key in responding to this change workforce dynamic supporting the alignment of the C-suite around these challenges.

How can HR leaders prepare for the impact of automation?

Job reskilling is a concept you may have heard of or even experienced before. It’s the process of learning new skills to move into different roles as technology changes how we work. This isn’t new - think back to when computers first became a workplace staple, or when the internet transformed communication. Today, AI and automation are driving another wave of transformation.

Whether it’s training a factory worker to manage automated systems, or teaching a marketer how to leverage data analytics, reskilling helps workers stay relevant in their careers and adapt to new opportunities. For HR leaders, this means focusing on proactive workforce planning and creating development programs that align with future needs. Investing in reskilling now ensures that employees can navigate this new landscape confidently and continue to add value in the roles³.

1. Identify what skills you will need for the future:

Begin by assessing the skills that will be in demand in the coming years. Start by engaging with business unit leaders, consulting with leadership, and understanding the broader business direction. Understanding which roles are likely to change or emerge due to automation and technological advancements is important.

2. Compare the skills you have vs. the skills you will need:

Begin by using employee surveys, assessments, and performance reviews to gather insights into your workforce's current skills. These tools help identify existing strengths and areas where further development is needed. To get a more detailed picture, consider conducting ‘strategic workforce planning’, which maps out how roles may change in the future and highlights opportunities for automation. This process provides a strong foundation for creating a targeted reskilling plan that aligns with both business needs and employee growth.

3. Create a plan to help employees adjust to the changes impacting their roles:

Create a reskilling plan tailored to your workforce’s specific needs - remember, there's no one-size-fits-all approach. Focus first on the most critical skills needed and start small. Consider piloting the program in one area to identify and fix any issues before expanding it further. Starting with small, manageable steps helps ensure success and smoother adoption. Remember, gradual progress builds momentum.

Embracing automation isn't about replacing people—it's about enhancing the potential of our workforce. By focusing on reskilling and proactive planning, we can ensure that Kiwi workers remain skilled and confident as automation technology matures. This approach not only benefits employees but also strengthens organisations across Aotearoa, making them more agile and competitive in a rapidly changing world.

As Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, noted⁴:

"The biggest challenge in the future of work will not be a lack of jobs, but a lack of skilled workers to fill them."

By investing in workforce development today, we can address this challenge head-on, ensuring that New Zealand has the skilled workers needed to meet the demands of an automated future.

Endnotes:

1.  https://www.stats.govt.nz/indicators/gross-domestic-product-gdp/
2. https://www.treasury.govt.nz/publications/media-advisory/new-economic-analysis-impact-artificial-intelligence
3. https://www.deloitte.com/content/dam/assets-zone1/nz/en/docs/services/consulting/2024/workforce-transformation-strategic-workforce-planning-placement.pdf
4. Schwab, K. (2017). The Fourth Industrial Revolution