Millennials advised to improve skills
Think tank projects savings impact
Millennials should quickly improve their skill set to adapt to the age of automation and technology 4.0, while increased savings for retirement are anticipated as income growth could be affected by automation, says Krungthai Macro Research.
According to the think tank's report, "Automation and Adjustment of Millennial Salarymen," automation is poised to affect career advancement in certain professions, especially routine work, and automated technology is anticipated to affect income growth and future living conditions, said Patcharaphot Nuntramas, senior vice-president of the global business development and strategy group.
"This issue is important for millennials, or those born during 1980-97, because they are still of working age and will be in the labour market for another 20 years. Use of automation will increase over the next two decades and new automation technologies can replace office employees or white-collar jobs as well as high-paying professions," said Mr Patcharaphot.
Some 50% of surveyed companies worldwide expect automation to have a full effect on full-time employment by 2022, he said, citing a 2018 survey by the World Economic Forum.
Despite having no plan to reduce the number of employees, many large Thai corporations have plans to adopt automation more extensively and makes changes in corporate structure, said Mr Patcharaphot.
"If millennials still do routine work, income growth will reduce in line with lower demand for such skills. This will affect savings during working years and eventually have an impact on retirement savings," he said.
"[Millennials] have to ponder whether they should continue doing routine works or embark on further study to make a career change into jobs that use creativity or management skills, which are difficult to automate."
Corporations have to improve technology for greater work efficiency and reduce operation costs, he said, adding that the travel agencies seem to have shouldered the most impact so far amid changes in technology.
About 137 million workers, or 56% of the salaried workforce in Thailand, Cambodia, Indonesia, the Philippines and Vietnam, fall under the high-risk category of losing their jobs to automation over the next two decades, an International Labour Organisation study found.
In the automotive and auto parts industry, more than 60% of salaried workers in Indonesia, and over 70% of those in Thailand risk being displaced.
If income growth decreases by 1%, this may have to be compensated by a 4% increase in savings of income in order to maintain a steady ratio of retirement savings, said Kittipong Rueanthip, vice-president of the global business development and strategy.
If automation causes employees' income to be on par with inflation, savings for retirement could rise to 35% of income from the usual 25%, said Mr Kittipong, noting that such savings rate is not easy to achieve.
Salaried workers can also opt to increase savings by diversifying their investments in insurance products and equity instruments at an early age in order to have sufficient retirement savings and reduce unexpected costs in the future, he said.
Krungthai Macro Research has maintained its economic growth outlook for this year at 4.5% because of slower export growth as well as lower than expected public expenditure.