Hey guys, ROI isn’t everything. There. I said it. I hate to be the bearer of bad news, or different opinions as the case may be. However if you are only thinking about ROI when it comes to deciding whether or not an investment in automation is a good move you are doing yourself a disservice. ROI (return on investment) is a key metric, sure, but we must look deeper.
A big factor that impacts the value of automation investments that has been somewhat overlooked is the cost of downtime due to employee absenteeism and turnover. Absenteeism and turnover may not be directly factored into ROI calculations, but they have a significant impact on the value of automation. If you are experiencing high levels of absenteeism or turnover, you have to spend additional time and resources finding replacements or covering duties. Obviously this increases the value of an automated system. It isn’t just about how much you may make, but how much you stand to lose.
Remember that automation isn’t just about cutting or recouping costs either! It’s also about improving efficiency and freeing up human resources for more rewarding tasks. With all the chatter about rust-out (when employees feel underutilised and understimulated in their jobs) automation can help keep employees engaged. Why pay someone $12 an hour to sit for eight hours straight doing work that wears their body down and numbs their brain? You can invest in a robot to perform the same task and train that reliable person to maintain your automated systems.
Sure, the upfront cost of a robot or cobot can be high. But an automated solution is purchased once, not daily. Automated systems quickly move from the expense account to an asset account. A robot doesn’t need sick days. Conveyors aren’t late to work. A Cobot doesn’t complain (unless you count a stack light flashing to notify you of a problem). Palletizers don’t walk out for a break and not come back leaving you in a lurch. Plus, the maintenance costs of these are quite reasonable. Especially considering the cost of hiring new employees in a market that has extremely high turnover for entry-level jobs.
Automate those simple and repetitive tasks! That way you free up your human resources to focus on more complex and valuable jobs -Redeploying employees helps you to utilize their unique human abilities and increase the efficiency and productivity of your business. As I mentioned earlier, rust-out is a growing problem that we are going to have to address. Gallup’s global workplace report for 2022 found that only 21% of people feel engaged by their jobs, and a stunning 60% feel emotionally detached. Not to mention those that are in the 19% miserable category.
So, yeah, we need to work on this people! Automation doesn’t mean the end of human jobs. It creates new job opportunities for people needed to design, maintain, and operate automated systems. Additionally, by automating certain tasks, you can improve the overall safety of your workplace, reduce errors, improve product quality, AND have the potential to reverse some of the rust.
So, while ROI is an important factor to consider when evaluating the value of automation investments, it’s not the only factor that matters. When you are making your decisions factor in things like the cost of employee absenteeism and turnover. Also consider the other benefits of automating simple and repetitive tasks. That way you can make a more informed decision about whether an automated system is the right investment for your business.