Riddell: Technology is coming and your job may be going
January 11, 2017
Ask many small business owners, managers, or their employees what is their definition of technology and you'll likely get the answer "my smart phone."
That's sort of like asking someone to define baking and their response is "a cake." Just so there is no misunderstanding, technology is commonly defined as the application of scientific knowledge for practical purposes. The reason that I am bringing this up now is that a confluence of events will force technology to have a significantly larger impact on businesses and employees in Grand County.
Most people will agree that Grand County will continue to be a service-oriented economy. Inherent in this service orientation is the recognition that the single largest line item currently in a service business's budget is labor. Whether a restaurant, a ski area, a bakery, or a plumbing service, right now the "make or break" factor is the cost and availability of labor. Based on the most recent vote in Colorado, the minimum cost for this labor must go up. As many of these service businesses operate on thin margins, this increase in labor costs has to be dealt with. One way is to pass on the increase to customers through price increases. Another approach might be to simply reduce the number of employees. A compromise approach might be a combination of higher prices and reduced employees or reduced hours for the same quantity of employees. In any case, something has to give if the business is going to survive.
Most areas of manufacturing have been and must continue to be actively involved in aggressively pursuing technology as a strategic component of survivability. What sometimes get lost in the public's review of technological advancements is that these improvements almost always result in fewer jobs, although the remaining jobs may very well be at a higher pay scale. But the net result has to be a decrease in overall labor costs.
From an employee perspective, you have to be brutally honest with yourself and ask “Can I (my function) be replaced?”
Now let's take a look at this opportunity from both an employer and an employee perspective. As a business owner/manager, my commitment to survival has me stay focused on my margin. So I have to start thinking about, looking around for technological solutions to my increasing cost of labor while balancing both service and quality. Tableside computer tablets for customer controlled ordering are already appearing in many fast food chains. Some are even experimenting with robotic delivery. But more efficient back office supply ordering and billing are also in play. Smart phone apps will surely continue to play a role. The key managerial challenge will be to try to stay up on these developments and be vigilant in cost/benefit analysis. It matters not the nature of your service business, if you have competitors and employees, the moment the cost curve shifts in favor of technology, you have to be prepared to take advantage of it.
From an employee perspective, you have to be brutally honest with yourself and ask "Can I (my function) be replaced?"
The simple answer today is "Maybe and probably," so your task becomes one of acquiring the skills where the answer is "Maybe, but not easily."
Now if your employment career horizon does not extend beyond next week, then don't even waste your precious ski time bothering to think about this future. But if Grand County is a place where you want to put down stakes and enjoy for a long time the many amenities it has to offer, then you are going to have to be gainfully employed to afford to take advantage of them.
By far, the easiest approach for both employers and employees is the buggy whip approach and assume that technology currently does not have and will not in the future have any appreciable impact on my business or my employment. This would be a very serious and costly mistake for county business leaders and employees. In the next column, we'll address securing future employment security from the employee perspective.
Following a successful international business career, John Riddell turned his attention to small business/entrepreneurial pursuits that included corporate turn-arounds, start-ups, teaching, authoring business and sports columns and serving as VP for the Chattanooga Chamber of Commerce directing its Center for Entrepreneurial Growth. He can be reach at firstname.lastname@example.org.