Cash Ecosystem
Automation & transformation: how retailers are adapting to today’s labor market
In a post-pandemic world driven by technological innovation, retailers are adapting to today's changing labor market in a number of pivotal ways. Leading the way is automation: a labor-saving force poised to define the future of retail, food service, and more.
Labor away? Understanding the changing labor market in the USA
In recent years, the United States labor market has undergone a series of pivotal changes—perhaps the most significant of which is a shift from a manufacturing-based economy to a service-based one.
Playing out slowly over decades, this change has impacted the types of jobs available and changed the skills that workers need to succeed. Generally speaking, it’s resulted in a sizeable growth within the service industries—but other factors have changed the specifics of which job markets have grown. Changing demographics have seen a rise in demand for healthcare jobs, while technological innovations continue to drive economic growth and bring with them an influx of jobs.
Within both manufacturing and service industries, technology has also led to a new labor restructuring. In short, many jobs once handled by humans are now performed by machines. The 2024 CFO Survey, a collaboration of Duke University and the Richmond and Atlanta Fed banks, interviewed companies to find out how they were using automation. More than 61% planned to use AI to automate tasks previously handled by humans. Many were already using automation in ways that directly impacted human labor, such as:
- Increasing product quality (58% of companies)
- Increase output (49% of companies)
- Reduce labor costs (47% of companies)
- Substitute for workers (33%).
While automation has undeniably thrown the labor market into flux, many consider it to be a reaction—and a welcome one—to reductions in labor availability largely due to the COVID-19 pandemic. It’s a collision of forces—a gradually shifting economy, an exploding technological sector, and an unforeseen global pandemic—that set the stage for the United States labor market today. Let’s take a look at some of these factors, how they’re affecting jobs, and how businesses are responding.
The pandemic’s effect on labor
Perhaps the most significant global event of the last decade, the COVID-19 pandemic has impacted the US labor market in countless ways—many of which are still being felt to this day.
In the early months of the pandemic, there was a sharp decrease in employment as businesses across the country closed their doors. Since then, there has been gradual recovery as businesses have reopened and more people have returned to work. Despite this gradual return to work, the pandemic has resulted in a lasting change in the types of jobs that are available. There has been an increase in demand for positions that involve providing care or assistance to others, such as home health aides and childcare workers.
At the same time, there has been a decrease in positions that involve close contact with customers, such as servers, bartenders, and in-store retail associates. Many workers have left to explore new career paths with higher pay and better benefits than what the restaurant and retail industries offer. In turn, these industries themselves have begun to change.
Retail stores are reducing hours
Since the pandemic, many retail stores have reduced work hours or closed altogether in response to slower business and lower worker availability. It’s a one-two punch. The first blow: less consumer demand largely due to the rise of online alternatives, which gained even more traction in post-pandemic years. The second: less available workers, those who could not work in person or no longer wanted to.
Restaurants are closing dining areas
Much like closing retailers, many restaurants have closed their dining areas because of the difficulty in finding wait staff to service them. The extended lockdowns and social distancing requirements from the COVID-19 pandemic made it difficult for many restaurants to offer in-dining experiences, resulting in layoffs and closures. Many former employees also no longer want to return to the positions they left behind.
Minimum wage is increasing
In response to decreasing worker availability (a trend many have called the Great Resignation; though detractors of this title will point to opposing forces, such as large-scale layoffs, to critique its broad strokes) minimum wages have begun to increase across the country.
Currently, the federal minimum wage sits at $7.25 per hour. However, many states have set higher rates, with some having multiple minimum wage rates (for example, one rate for workers in the retail sector and another for those in hospitality).
In 2019, the U.S. House of Representatives passed a bill to gradually increase the federal minimum wage to $15 per hour by 2025. And since the pandemic, there has been a stronger push by many workers in the retail and service industry to raise the minimum wage more quickly.
Automation is driving a new paradigm in labor
To cut costs and respond to labor shortages, many retailers and business owners are now exploring technology and automated solutions. Automation opens new possibilities, eliminating many unnecessary expenses for businesses and allowing staff to focus on improving customer service.
Self-service kiosks and self-checkout systems are one key example of game-changing automation for retailers and restaurants. These devices allow customers to handle the checkout process themselves while implementing a host of analytics and security features to help businesses better manage and understand customer behaviors.
Business owners and retailers are also implementing solutions that automate cash handling processes within their store. Smart safes and cash recyclers negate the need for employees to manually count cash and deal with the challenges that go along with it. In addition to providing better cash security, these devices also save managers and associates countless hours on cash-handling tasks—allowing them to focus on more complex responsibilities to improve operations and enable a better shopping experience for their clients.
Embrace technology, empower human labor
As the labor market in the U.S. and abroad continues to change, it’s clear that technology is driving the future. However, it’s people that are truly defining that future—as they hold the power as both decision-makers and consumers. For retailer and restaurants looking to succeed, a strategy that embraces technology and empowers to humans work, create, and consume is essential.
Sesami: your partner in cash
When labor is a continual challenge, automation offers a lasting solution. At Sesami, we can help. With over 350K devices deployed in over 90 countries—and a software platform that’s reimagining what’s possible for digital cash operations—we lead the industry in innovative cash-automation solutions for businesses at any scale. Delivering competitive strategic solutions tailored to our clients, our team has led numerous transformative projects in both financial and retail sectors worldwide. Our unwavering commitment to excellence, together with our drive to expand the possibilities of technology, makes us trusted partners in managing the complexities of today's digital world.
Sesami Solution Experts
The team at Sesami.io consists of innovative and skilled professionals with deep expertise in industry trends and technical knowledge. They have a proven track record of guiding businesses through numerous technology cycles, especially in the retail and financial sectors. Their work involves creating cutting-edge solutions that set new standards for how companies leverage digital technology. Renowned for their analytical skills and strategic insights, the team has led numerous transformative projects, positioning themselves as key influencers in the technology field. Their unwavering commitment to excellence and their drive to expand the possibilities of technology makes them trusted partners in managing the complexities of today's digital world.