HR dilemma: Should companies increase automation or invest in people?

When planning a business strategy for the year, companies often face the dilemma of how to dispose of the budget to ensure the greatest possible efficiency and achievement of their business goals. Then the question may arise in their minds whether better results will come from replacing employees with machines and software, or whether invest in people is the key to success.

Such a conundrum poses a great challenge for both HR and management. Below, we point out the benefits each of these decisions can bring and consider which approach is more optimal for today’s enterprise.

Why invest in people?

Invest in people, on the other hand, includes a variety of activities aimed at supporting employees in their development – that is, improving competencies by increasing knowledge and enhancing skills. This type of process takes various types of internal or external training, soft skills training, mentoring programs, participation in conferences and other industry events, access to e-learning platforms, etc. This approach usually translates into numerous benefits for the organization – in line with the idea that an engaged, experienced and talented employee is the greatest resource one can have. The key gains are:

• competency development – through training, workshops, personal and professional development programs, employees improve their hard and soft skills, which translates into better results of daily work and greater efficiency,
• greater motivation – an employee whose development is taken care of feels appreciated and more motivated to make his work produce the results expected by the organization. Moreover, in such a situation, he or she is more willing to bind himself or herself to the organization for the long term (greater retention),
• and better adaptation to change – invest in people allows a company to respond faster to market changes without losing competitiveness,
• greater creativity and innovation – employees who are supported in their development (and thus also encouraged to share ideas, experiment and take new initiatives, etc.) can contribute to the design of new solutions, processes and products, which will give the company a competitive advantage in the market.

Why automate work?

Work automation involves applying advanced technologies (computer systems, software, machines, robots, artificial intelligence, etc.) to replace (or provide support for) an employee in performing some assigned tasks. The implementation of such improvements focuses on eliminating the need to perform repetitive, monotonous activities and redeploying the resources thus gained to other areas (more developmental and innovative). Such an approach translates into such benefits for the organization as:

• increased productivity and efficiency – because machines, systems, and programs work faster than humans (acceleration of the implemented processes),
• less risk of error – human errors are natural and unavoidable, but can lead to costly consequences, while automation reduces this risk (machines and computer systems are more precise in performing tasks),
• savings – when fewer employees are needed to perform routine and time-consuming tasks, an organization can save both time and money (e.g., in the area of hiring and training new employees),
• greater scalability and flexibility – automated tools and solutions can be adapted to perform more tasks (without the need to hire new employees), enabling companies to respond efficiently to changing market conditions and demand, and to implement their business plans faster.

The HR dilemma – which approach should you choose?

One may wonder whether companies should increase automation or whether they should, however, invest in people they employ. This, however, is not a well-posed question. After all, it is mandatory to emphasize that automation is a solution that supports organizations in daily processes as much as possible – but it will not work in all areas at work, unfortunately.

You can automate the process of sending messages to customers, but not solving their problem when empathy and understanding should be demonstrated. Artificial intelligence will help you develop the content of your social media posts, but it won’t create an effective business or marketing strategy for you, which requires, first, creativity and, second, excellent knowledge of the company, its situation, needs and so on. Because of such dilemmas, in many areas, the importance of employees – with their knowledge, experience and skills – will not change.

Automation or invest in people – summary

All in all, we should point out that some tasks get performed better (more accurately and faster) through automation, while others require human interaction and a variety of soft skills. Thus, the optimal approach that organizations should implement in this regard is to find a balance between automation and invest in people – to reap the full benefits of both.

The final decision, however, will always depend on the nature of the company, its needs, its stated business goals and the industry in which it operates (which determines what tasks are performed). Also of significance will be the capabilities of the technology (which are also not unlimited, but are sure to increase year by year) and the potential of the current workforce.

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