How RPA Contributes to a Future-proof Labor Market

Recently, McKinsey released a report on the Dutch labor market. The Netherlands currently has an active labor force of 9.6 million people, but is facing increasing challenges such as an aging population and tight labor markets. McKinsey argues that the Netherlands cannot meet its housing, health and environmental goals without addressing these labor market issues. This can be done through higher productivity growth, technology and a "train of job transitions" (continuous retraining and development into more productive jobs). A critical area for transforming the labor market is increasing labor productivity through technology. Robotic Process Automation (RPA) plays a key role here. According to McKinsey, the acceleration of innovative technologies such as RPA can quadruple productivity growth, largely solving the shortage. But how exactly does this work, and how can it make our labor market more future-proof? In this blog, we explain the challenges of the Dutch labor market and how RPA can help solve them (Read more about what RPA is here).

The Challenges of the Dutch Labor Market

According to McKinsey's recently released report, there are several trends that are putting pressure on the labor market:

• Increasing labor market tightness: The rising number of job openings per unemployed person is making it increasingly difficult for companies to find qualified staff.
• Population aging: An aging population is leading to a decrease in the number of people working and an increasing demand for care.
• Declining productivity growth: Declining productivity hinders economic growth and the ability to meet future labor demand, which will only increase.

In addition, factors such as increasing income inequality, declining educational quality and health problems are exacerbating the situation and causing increased pressure on the labor market.

RPA as a Solution to Labor Market Challenges

Labor market challenges consist mainly of increasing tightness and declining productivity. McKinsey argues that accelerating the adoption of innovative technologies can quadruple productivity growth, largely solving the tightness problem. RPA is an example of one such innovative technology that helps companies increase productivity without hiring more staff. By implementing RPA, companies can better meet the challenges of a tight labor market and an aging workforce while strengthening their competitive position.

Increasing Labor Productivity:

RPA can automate routine and repetitive tasks, allowing employees to focus on more complex and valuable work. This leads not only to higher productivity, but also to more efficient use of the available workforce. According to McKinsey, technological innovation, including RPA, can quadruple productivity growth in the Netherlands from 0.4% to 1.8% per year.

Alleviating Labor Market Shortages:

RPA reduces reliance on human capital for repetitive tasks, allowing companies to operate more efficiently with fewer staff. This helps relieve labor market tightness and reduce pressure on workers.

Supporting the "Train of Job Transitions.

McKinsey expects the number of people needing retraining each year to increase by a factor of 1.4. The demand for higher productivity jobs will increase significantly in the future. RPA allows existing workers to be retrained and moved on to more advanced positions. This promotes mobility in the labor market and helps fill vacancies that require advanced skills. McKinsey emphasizes the importance of a "train of job transitions" in which workers move laterally or upward into jobs with higher productivity.

Conclusion

The future resilience of the Dutch labor market depends heavily on the extent to which technological innovations, such as RPA, are embraced and integrated into business. By investing in RPA, the Netherlands can increase productivity, reduce labor market tightness and prepare workers for a future centered on more complex skills. Many companies today face problems such as understaffing, declining productivity and difficulty retraining. RPA can play a key role in addressing these challenges by automating repetitive tasks. Future-proofing the labor market is a joint responsibility of government, businesses and workers, and this responsibility will become increasingly important in the coming years.

Wondering how RPA can help in future-proofing your business? Then schedule a no-obligation consultation with us to see what RPA can do for your business.

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