It’s hard to pick up a newspaper (or your tablet) at the moment without seeing an article discussing the concept of a living wage – paying all full time workers a salary high enough to enable life above the poverty line.
And of course with an election approaching here in Australia, the debate around this topic is heating up and I’m sure will only get hotter. In Australia our current minimum wage sits at 54% of the national median income. Some political and union groups are advocating for an increase in order to bring that figure up to 60% (which is where the OECD sets the relative poverty line).
Naturally the prospect of rising labour costs concerns many small and medium businesses, who wonder how they will protect slim profit margins. Do they have to absorb another cost? For many the immediate reaction might be to consider a reduction in staff or cutting back the hours of work offered.
But laying people off isn’t necessarily the answer. Let’s consider this...
In order to justify paying their workers more, businesses need their people performing higher value tasks. Higher value work boosts productivity, and therefore profitability. Higher profitability naturally means you can afford to pay your people more. As they say, ‘what goes around comes around’. But how to get there?
A practical way to achieve this reallocation of work is through automation.
Removing the burden of repetitive ‘grunt work’ allows staff to focus on high value activities. And not only that, this automation can typically perform these repetitive tasks at a fraction of the cost, more efficiently, and for longer hours than a human counterpart.
According to research from the London School of Economics and the University of California at Irvine, job automation is increasing ever faster as minimum wages rise. (http://www.lse.ac.uk/News/Latest-news-from-LSE/2018/05-May-2018/Minimum-wage-increases-lead-to-faster-job-automation)
This makes sense, not in the context of taking jobs away from the human workforce, but in setting that workforce free to do the kind of work that increases revenue and encourages growth.
Investing in automation now can help insulate businesses against rising overheads in the future, providing not only ROI, but an edge over the competition.
Automation is no longer the future. Automation is now.
See how automation is already driving productivity in a well-known Australian business - https://www.letlucy.com/kincrome-automates-order-entry-with-lucy