Please ensure Javascript is enabled for purposes of website accessibility

Yes, Robots Are Coming for Your Jobs -- So You'd Better Have Skills

By Daniel B. Kline – Updated May 15, 2019 at 2:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Amazon and Walmart are among the most visible leaders of the trend, but the next wave of automation is underway all over.

Walmart (WMT 2.18%) is now using robots to help employees track and shelve inventory, among other things. And while the company says its machines won't cost any human workers their jobs, smaller crews at the company's stores would appear to be an inevitable -- and intentional -- result of automating more tasks.

The retailer's efforts have gained attention because customers can see real, autonomously operating robots working in stores as they shop. In reality, automation has been eliminating jobs in less flashy ways for years -- for instance, via self-checkout.

In-store robots may have their limits, but automation can, and will, take warehouse and distribution jobs in the near future. Amazon (AMZN 2.55%) has already been successfully testing those technologies.

An Amazon Prime tractor trailer.

Amazon is testing using robots to pack individual orders. Image source: Amazon.

The warehouse of the future

Amazon and other large e-commerce businesses have an enormous task when it comes to packing and shipping orders. Humans can only work so fast, and we make mistakes, need breaks, and call in sick.

That's why Amazon has begun testing automation that will pick and pack our orders, according to USA Today. The retailer explained its efforts in a statement sent to the newspaper.

"We are piloting this new technology with the goal of increasing safety, speeding up delivery times and adding efficiency across our network," read Amazon's statement. "We expect the efficiency savings will be reinvested in new services for customers, where new jobs will continue to be created."

The statement parallels those issued by other companies on this front. McDonald's has said that the digital ordering kiosks it's installing across the chain won't lead to lower headcounts in its stores. And Starbucks (SBUX 1.61%) has said as more people use its mobile order and payment app, reducing the need for cashiers and order-takers, its plan is to move more workers over to making drinks, rather than operating its coffee shops with fewer people.

That's more believable in the case of operations where square footage is limited. There's only so much room behind a Starbucks counter, so the space not occupied by the body of a person taking orders or processing payments could instead be filled by someone making the chain's often-complex beverages.

At an Amazon warehouse, that's a less plausible scenario (and a Reuters article estimated that 24 jobs would be eliminated in each facility by automation). While the e-commerce leader will certainly add staff in other areas, once these order-filling machines are deployed widely, it's unlikely to need nearly as many low-skilled workers as it does now.

That's a trend that's not unique to Amazon. Multiple companies now sell off-the-shelf warehouse automation solutions -- and a number showed them off at the recent Shoptalk conference.

You need skills to pay the bills

Automation has been replacing manual labor since the dawn of the Industrial Revolution. When it became cheaper to haul goods using trains compared to wagons, some wagon-driving teamsters lost their jobs. Forklifts have replaced strong people in countless moving-things-around roles, and self-checkout machines have certainly lessened demand for cashiers.

It's a simple cost-benefit analysis. If a company can afford the upfront investment in machines to do any set of tasks, and the payoff in terms of lower workforce expenses will outweigh the costs, those tasks will become automated.

Nobody questions why retailers use a point-of-sale systems to track sales and inventory instead of physical ledger books. Eventually, nobody will question the use of automation in warehouses, or on the shopping floor.

It may take a while -- smaller companies with fewer resources won't move as quickly -- but eventually, automation spreads. That makes it essential for workers to continue to grow their skill sets. And the soft skills and flexibility that are hardest to automate will doubtless be the attributes that employers will need most. 

Cool robots or no cool robots, for the foreseeable future, the human element will not be replaceable.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Starbucks. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned, Inc. Stock Quote, Inc.
$115.88 (2.55%) $2.88
Walmart Stock Quote
$132.53 (2.18%) $2.83
McDonald's Corporation Stock Quote
McDonald's Corporation
$235.34 (1.99%) $4.60
Starbucks Corporation Stock Quote
Starbucks Corporation
$85.62 (1.61%) $1.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.