Does Self-Service Technology Displace Workers?

Ann All

Much of the ire over American job losses is directed at U.S. companies that choose to outsource work to other countries or at companies that apparently use instruments like H-1B visas to employ foreign workers who are willing to work for less than their American counterparts.


In contrast, relatively few folks seem bothered by self-service technologies that can help retailers and other businesses trim their current work forces or avoid hiring additional workers. Maybe it's because such technology rarely results in big, splashy mass layoffs, or because the jobs are perceived as lower value in the first place.


And of course, many folks view devices such as self-scanners as a welcome convenience. I, for one, prefer self-service options over the poor customer service that has become all too common in checkout lanes and other places.


According to the Washington Post, the numbers of jobs at department stores and food and beverage stores have fallen fairly dramatically over the last seven years -- and experts attribute at least part of the decline to retail technology improvements.


Retailers like Home Depot insist that devices such as self-scanners help them move humans from checkout lanes to the sales floor and other areas where they can provide better service to customers.


Loss of workers tends to be "very gradual and subtle," a spokeswoman for the United Food and Commercial Workers International Union tells the Post. And, "... some advances in technology... has certainly made the working environment better for our members."


While investment in self-service checkout units is expected to grow from $380 million in 2006 to $457 million in 2007, according to IHL Consulting Group, such devices are not always a clear win for companies trying to cut costs. They cost about five times as much as a regular cash register and last about half as long. Retailers also worry about theft, and some have found that use of self-service devices means fewer sales of magazines, gum and other "impulse" items.


The Post article wraps with some expert predictions of stores where interactive mirrors, items embedded with RFID chips and other new technology will function as a kind of high-tech personal shopping assistant. I am not convinced that we'll see such enhancements in the relatively short time frames called for by the experts, as retailers tend to be pretty stingy. But I have no doubt that we will see more of them.

Add Comment      Leave a comment on this blog post
Dec 31, 2007 2:03 AM steve steve  says:
I don't use the self service checkouts for this reason, but I do work in IT and it seems 95% of the staffing are now Indian owned. In the specialized field I am in, almost all the workers are now Indian. It's not that the cost to the end company is all that cheaper. The rates to the end company are close to the same (80-150/hr). They bring over people on H1b and pay them to crap and the staffing companies send the profit back to India to train and send more people over. As a displaced employee I contracted for one of these companies. On paper the money was good but wound up chasing expenses for 8 months and just broke even after all the games. The bigger issue is that they now control a significant portion of the IT labor force and the money is not spent here so it's pure outflow. Reply
Dec 31, 2007 5:34 AM Scott Scott  says:
I do not use the kiosk for the following reasons: They are putting people (probably Americans) out of work and I feel that the development cost of these devices is most likely going over seas. I am a hugs advocate of customer service and take my trade to smaller stores where such is provided. Odds are good that if there is a MART in the name, I do not go there. I may not get the best prices but I feel that Americans should support America! It is tantamount to treason to do less!As a 23 year veteran of IT having been replaced by an H1b person for half the salary I can relate to the cries of my fellow compatriots now trying to eek out a living as a consultant or worse. I advise young people today looking for a career to stay away from anything that big business can exploit to offshore entities. While that leaves very little, it is a good bet that having a good command of the English Language will give them a leg up.The world economy is a zero sum gain, meaning, while the third world countries that we are exporting out jobs to increases, ours will surely decrease. The middle class will cease to exist and there will be the very rich and the poor as it currently is in those third world countries today. Reply
Jan 1, 2008 2:59 AM ben breeland ben breeland  says:
This is not a bad thing. Successful IT projects combine people, process, and technology in the right amounts. The only problem is many corporations choose to outsource (or introduce self-service scanners) with little or no regard to people or the actual processes that occur within the company. If these companies devoted a fraction of the time (and money) spent engaging a consulting company on talking to the staff and understanding the current processes and weaknesses, I believe the gains would far exceed those of any outsourcing or technology implementation. Unfortunately, most business interest rests in short term gains layoff people and the stock price increases; announce a major outsourcing deal and the stock price increases; announce the implementation of new technology and the stock price increase. We have all seen this (and the rehiring of the workers after the quarter ends). No. Technology is not a bad thing ignoring the people and the process is! Reply

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