🔒Man & Machine: Major CT industry sectors turn to automation, AI amid workforce shortage, high labor costs

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As several industries deal with workforce shortages and high labor costs, companies are increasingly investing in automation and artificial intelligence technologies to supplement their existing workforce.

Since the COVID-19 pandemic hit in March 2020, already existing employment challenges like a lack of skilled laborers and too many open positions have only been exacerbated.

With more than 100,000 jobs currently available in the state, investment in automation and AI — in industries ranging from manufacturing to insurance — has become more commonplace over the past several years, experts say, and will likely continue into the future.

Even restaurants, which have been among the hardest hit from pandemic-induced labor shortages, have focused on technology investment. For example, a New London-based eatery — Shaking Crab — gained statewide attention over the past year after it purchased robots that serve food to tables and return dirty dishes to the kitchen.

Experts said new workplace technology creates a shift in employees’ skill sets, not necessarily a loss in jobs, freeing up humans to do more complex tasks.

“It’s a pretty interesting moment in time — we have a strange, and hopefully once-in-a-century labor shortage associated with the pandemic and the outcomes of that, but we also have a demographic shift coming in the labor pool as Baby Boomers retire,” said John Bourdeaux, president of AdvanceCT, the state’s not-for-profit business recruitment arm. “Even prior to the pandemic and prior to the current labor shortage, I think there was a lot of thinking going on around automation.”

Manufacturing

Automation is nothing new in the manufacturing sector. Bourdeaux said aerospace and defense companies have implemented Industry 4.0 initiatives that aim to update factories. Manufacturers are at the forefront of adopting automation technologies, he said, including things like robots, cobots, 3D printing and design software.

Half of the 607 U.S. manufacturers recently surveyed by accounting firm Marcum said they have taken on new technology over the past 12 months, while 61% said they plan to launch a new automation or technology project in the coming year.

Mark Auletta, president and chief operating officer of Bristol-based manufacturer Bauer, said his company is finishing up a multimillion-dollar facility expansion. Part of the project includes adding new automated robots that can do tasks like cut metal to help the company’s existing workers be more efficient.

“This new equipment is light-years ahead of what our guys use now,” said Auletta, whose company makes aircraft component testing equipment for commercial and military aviation industries.

The 30,000-square-foot expansion will more than double Bauer’s existing manufacturing space and include about $1 million in new sheet metal fabrication and welding equipment that will make the plant more efficient.

“Two key pieces are a sheet metal laser cutter and a press break to break metals,” Auletta said. “It’s highly-automated equipment.”

Bauer workers currently cut metal “by hand,” Auletta said, and the company has had to historically outsource some fabrication work. The new machinery will help change that.

“The other significant thing is we can’t hire people to run our antiquated equipment because it’s so old school,” Auletta said. “When I think about the workforce, what advanced manufacturing programs are training students on today is how to use the new CNC machines and the new automated fabrication machines.”

Connecticut Center for Advanced Technology President & CEO Ron Angelo said technology advancements like automation and AI create new opportunities for workers. It could be a way industries deal with a challenging labor market.

“They could be taking high-value employees, upskilling them to a higher-value job and replacing that with an automated process,” Angelo said. “It does not matter what industry you’re in, that’s what every industry is looking at right now and it’s here to stay.”

Bourdeaux said he expects a continued shift from credential-based to skills-based hiring across manufacturing, life sciences and technology.

For example, rather than wanting to hire someone with a degree from a specific institution, companies want prospects who have a certification for the work they’ll be doing.

In his day job, Manufacture CT Executive Director Jamison “Jamie” Scott is executive vice president of Woodbridge-based manufacturer Air Handling Systems. He said smaller manufacturers have been investing hundreds of thousands of dollars in automation machines over the past several years.

“Years ago I started investing in automation more and more at my business,” Scott said. “What used to be done 100% by hand, like welding, is now two-thirds automation, and other manufacturers say the same thing.”

He said companies will continue to turn to automation as workers are harder to find. The state’s Manufacturing Innovation Fund offers loans and grants to companies that want to update their facilities, and Scott said almost every manufacturer he knows makes use of the program.

“Now every machine I buy, even the new machines that go to replace older machines, are completely automated today and the technology just didn’t exist before,” Scott said.

Auletta, who is also president of industry group Manufacture CT, said he’s seen companies such as Assa Abloy and Honeywell invest in automation.

Northford-based Honeywell and Assa Abloy’s Connecticut facilities, including one in Berlin, have installed fully automated machines on their assembly lines to crank out product parts at much higher speeds.

Connecticut Chief Manufacturing Officer Paul S. Lavoie said the labor shortage across the country means companies have to be creative. He also said automation provides “upskilling” opportunities to workers. As traditional toolmakers retire, new technologies mean workers will have different skills than in the past.

“We’re never going to solve the workforce problems with just people, we’re gonna have to use technology. So it’s never a job-replacement issue, it really is about taking the jobs that we can’t find people for and then trying to figure out how we can use automation to handle that workflow,” Lavoie said.

Insurtech

Bourdeaux said automation and AI technology in insurance has “supercharged” the natural growth in that industry. As a result, more insurers are adding mathematicians and computer scientists to their ranks.

“Some of the greatest quantum-computing thinkers are coming out of Yale right now — those things are going to fundamentally change the insurance industry,” Bourdeaux said. “That’s a huge shift in what it means to staff that entire industry.”

InsurTech Hartford Founder Stacey Brown said automation is being adopted in insurance to improve productivity and quality of work.

By teaching a robotic process automation software specific steps in an action, like helping a potential customer get quotes for insurance by reviewing their information, “mundane” and slow work can be sped up.

“When a human’s doing it there’s room for error, right? But when a computer does it, … you tend to get less errors in the process,” Brown said.

Automation is being used to help underwrite insurance policies by collecting client background data. Using tech to free up employees for other tasks that need human interaction can be a way to deal with labor shortages, he said.

“It’s part of how we are solving the problem, but it’s not a silver bullet,” Brown said.

Larson & Toubro Infotech (LTI) is a global technology consulting and digital services company with operations in 33 countries. In April, the firm announced it was opening a new engagement center in downtown Hartford’s Boat Building, where it will occupy 13,000 square feet that supports 300 hybrid workers.

LTI Insurance Chief Technology Officer Amit Unde said his firm provides automated and AI software services to many insurance companies. He said firms can’t compete without adding some sort of new technology to give them an edge.

“It’s so difficult to attract talent,” Unde said. “So the solution that every insurance company is thinking is ‘how do I make it easier for my workforce to do their job, help them achieve work-life balance, and make that work more fun and more interesting? One way to do that is to take away all this operational work.”

Automating processes, like data collection for underwriting, can “take all that grunt work away,” Unde said.

“You can retain the workforce that you have because you’re making their life easier. So automation solves a lot of problems,” Unde said.

Bourdeaux said the state has a history of innovation, and that can continue with the wider spread adoption of AI and automation.

“Connecticut is poised on all these fronts to be a leader,” Bourdeaux said. “Is it going to be driven because of a labor shortage, though? A labor shortage always produces some creativity, that’s for sure.”