Robots don’t need middle managers, StatsCan finds

It’s the middle managers who suffer when companies introduce robots to their workforces, suggests new research from Statistics Canada.

The national statistical agency published a pair of studies looking at the effects of automation on employment. Overall, it found firms that invested in robots ended up employing more workers after controlling for company size, unionization, outsourcing and other characteristics.

On average, firms that use robots had 15% more workers than companies without robots in the same industry.

“The studies found that firms expanded both their high- and low-skilled workforce, although not their middle-skilled workforce after investing in robots,” StatsCan said, noting that companies with robots also use fewer managers.

“One possible explanation is that robots can repeat multiple tasks with a precision and consistency that humans cannot, and greater consistency may mean firms need fewer managers to monitor workers to ensure quality,” StatsCan said.

In the absence of managerial oversight, workers get more decision-making authority and greater individual performance incentives, StatsCan said.

“Robots are associated with firms focusing more on increasing product and service quality, and not on reducing labour costs,” it said, and “robots allow firms to increase productivity.”

On average, companies that invested in robots increased output by 0.8% per year, it noted.

While the auto industry accounted for about half of company investment in automation back in 2008, by 2017 it was down to less than one-third, with robots increasingly in use in agriculture, mining, construction and certain service industries such as health care and waste management, StatsCan reported.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.