Australia has a bit of a problem. Wage rates are very high. The government, via Fairwork, likes to increase wages every year by inflation. This makes sense if sales and income increase by at least inflation, but there is no guarantee that will happen.

There’s more.

Increasing wages every year makes sense only if productivity increases. However, over the last few years, productivity has gone down.

And that really is a big problem. Now, add a skills shortage, and employers will become more creative.

You can see where this is going.

So, you will not find it surprising that when I have discussions with clients, I tell them that automation and offshoring are something that is not just considered but actively undertaken.

It seems I am not alone because the World Economic Forum is saying the same thing. This is because many businesses will boost the adoption of technologies such as AI.

According to a survey by the World Economic Forum of more than 800 companies, 69 million new jobs will be created by 2027.

This all sounds marvelous until you read that they will also eliminate 83 million positions.

That’s a lot. Because that is a net loss of 14 million jobs, equivalent to 2 per cent of current employment.

The survey suggests that companies will need new workers to help them implement and manage AI tools. Employment of data analysts and scientists, machine learning specialists and cybersecurity experts is forecast to grow 30 per cent on average by 2027, according to WEF.

But the widespread use of artificial intelligence will put many roles at risk because robots will replace humans in some cases. And jobs that take 30 minutes or an hour can now take minutes using AI.

Recently, I asked my team to generate a recruitment advert. This would normally take anywhere between 20 minutes to 30 minutes to draft. My guys used ChatGPT, and within about 45 seconds, the bare bones were done, and we spent another 10 minutes making it relevant and personal. You do not need to be Einstein to work out. We will need less people in the future.

The Accounting industry is in for a shock. I have been telling my team for a while that in about 10 years’ time, there will be few manual bookkeepers. In fact, according to the report, there could be 26 million fewer record-keeping and administrative jobs by 2027. That is only in 4 years’ time.

Data entry clerks and executive secretaries are expected to see the steepest losses with AI taking over most of those jobs.

Automation has expanded slowly in the early part of this decade, but over the next few years, it will become as essential as the internet is today. But many say we are overstating things because organisations polled in the survey estimated that 34 per cent of all business-related tasks are currently performed by machines.

That’s not much different from 2020. But in 2020, employers thought 47 per cent of tasks would be automated by 2025.

They now expect that number to reach 42 per cent by 2027. We will have to wait and see what happens.

But in the meantime, if you are a progressive business, you should be rethinking what skills your employees need and what can be automated. Because automation may have the odd electronic bug, but they always turn up on time, are never sick, don’t go on holiday, don’t demand public holidays and are generally not toxic.

And I also think our government, like all governments, are not progressive. That is why, instead of concentrating on how to reskill and preserve those jobs that will remain, they are trying to keep the status quo of wages rises, awards and ignoring productivity. That means businesses must do it themselves. Because if you don’t your competitors will, and you will find yourself automated out of your industry.

Making a business more efficient and ready for the future is step 3 and 6 of our 9 steps to working less, earning more and creating wealth. If you want to know more, contact Hitesh@wowadvisors.com.au or Ros at ros@wowadvisors.com.au or 07 3161 9548.