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Stronger Cash Flow Will Prepare Firms for Robot Takeover

Citigroup has suggested that it will cut up to half of its 20,000-strong technology and operations staff in the next five years and replace them with machines, according to a report last night.

While wage growth is slowing, employment remains record-high, with large numbers of people secured in employment. Unfortunately, as technology and automation play larger roles in our working lives, certain employees could see themselves replaced by robotic counterparts.

Jamie Forese, Citigroup president and chief executive of its institutional clients group, warned the Financial Times that technology and operations jobs are the most vulnerable as they involve a lot of menial and repetitive tasks that do not demand human sensibility. Other institutions from Barclays to Goldman Sachs have also expressed a similar prospect for their staff.

While this progression may worry some, it should not necessarily account for a fall in (human) employment in the next half-decade. While accounting and administrative tasks may be relegated to automation, their involvement could open doors to new jobs such as invention, operation and repair. Nonetheless, business owners should prepare their workforce for any shift in concept, and not be tempted to resist technology altogether.

British businesses should storm through the digital age, helping the economy to keep pace with international rivals. At the Credit Protection Association, our debt recovery services free up cash flow that our Members can use to invest in new technology and training schemes to improve the skills of the staff already present.

Separately, latest data from Manpower, the employment agency, suggested that job cuts could be on the way in the business and financial services sector this summer amid a slump in hiring confidence. A survey by Manpower showed a net employment outlook for the third quarter of -1 percent, the first negative outcome in almost a decade.

The Manpower findings, which suggest that more business and financial employers plan to cut staffing levels than increase them, helped to drag down the overall outlook for the quarter to +4 percent, its lowest since 2012.

James Hick, managing director at Manpower Group Enterprise, put part of the blame on structural changes in the sector, including more automation in banking, leading to branch closures and job cuts. “Credit Suisse is planning to automate a large number of compliance jobs, contributing to a reduction of up to 45 percent of its total compliance and control headcount,” he said.

Citigroup is a US-based banking group that offers every type of financial service for personal and business customers, from bank accounts to advice on proposed corporate takeovers. Banking is viewed as the ripest sector to take advantage of the rapid development of technology that can carry out basic tasks as well as humans, including processing and administrative work.

The growing influence of technology is a two-sided sword, with any improvement to productivity dampened by increased competition to traditional employment. There is little doubt that the business landscape will have altered in the next five years, and those who resist it will be left behind. Particularly within the finance sector, where new inventions such as online and mobile banking, have already made such a difference in how consumers conduct their day-to-day lives.

Business owners should ensure they have the financial strength to honour new technology, ensuring staff are either adequately trained or new staff are hired.

At the Credit Protection Association, our debt recovery and credit management services are utilised by our Members to invest in new opportunities as well as maintain the old. Until automation takes over completely, employers should ensure their cash flow can sustain new technology and equipment, as well as the right working environment to springboard employees into new work concepts.