How Much Technological Unemployment Will UiPath and RPA Cause?

Robotic Process Automation (RPA) is the use of software robots to automate repetitive, rules-based processes that are typically executed by humans using one or more existing software applications. RPA, the fastest growing enterprise software segment, has gained traction due to its ability to save customers money and increase operational resiliency during the pandemic.

For enterprises, implementing RPA is a clear win. However, from the employee perspective, the value of RPA is less certain. Unlike other software that creates value by helping organizations grow, RPA has the potential to cause significant technological unemployment.

UiPath and other leading vendors claim that RPA frees up employee time to focus on higher-value tasks. However, this perspective is not consistent with the primary business case for RPA – cost-savings.

At $500 million of annual recurring revenue, UiPath's robots are already doing the work of an estimated 100,000 employees. This does not mean that UiPath has led to the unemployment of 100,000 people – companies still need humans to oversee the execution of processes, and do repurpose employees to create value in other ways. At the same time, it is certain that RPA and UiPath will be a significant driver of technological unemployment.

Key Takeaways

Table of Contents

• UiPath Robots Already Do the Work of 100,000 Full-time Employees
• At $20 Billion, RPA Robots Could Do the Work of 4 Million Employees by 2030
• Which Jobs Are Most Likely To Be Disrupted?

UiPath Robots Already Do the Work of 100,000 Full-time Employees

According to Bloomberg, UiPath currently has $500 million in annual recurring revenue. UiPath has shared that the annual cost of a robot is 2 to 15 times lower than that of a full-time employee. At an average cost of $50,000 per employee, this means that UiPath's robots are currently doing the work of 20,000 to 150,000 full-time employees.

Put differently, UiPath customers replace the work of one human employee for every $5,000 spent on RPA robots. UiPath has approximately 7,000 customers today. This means that its average customer spends roughly $70,000 per year to automate the work of 14 full-time employees.

This estimate is consistent with case studies that have been published on the impact of RPA at large enterprises:

At $20 Billion, RPA Robots Could Do the Work of 4 Million Employees by 2030

Robotic process automation is a new market. Therefore, it's difficult to know exactly how large it will become. Multiple analysts believe that the RPA market could grow to well over $20 billion by 2030. Reports from Grand View Research and Allied Market Research indicate that the RPA market could hit $20 billion as early as 2027.

If it costs $5,000 to replace the work of a single employee, this means that RPA robots could do the work of 4 million employees by 2030. We can actually expect the cost of replacing an employee's work to decline as the robots become more intelligent, and competition causes RPA vendors to reduce their prices.

As mentioned above, this does not mean that RPA will immediately force four million individuals into unemployment. In most cases, RPA robots are only able to automate a portion of an employee's tasks. Until the robots can automate entire processes, these individuals are likely to remain employed to work alongside the robots.

In the short-term, it's more likely that RPA customers will reduce headcount by hiring less new employees. However, significant advancements in artificial intelligence and machine learning mean that an increasing amount of processes will become fully automatable over the next decade. RPA vendors and experts refer to this unification of RPA, AI, machine learning, and process mining as hyperautomation, or the fully automated enterprise.

Which Jobs Are Most Likely To Be Disrupted?

RPA will impact all industries. In fact, 80% of the Fortune 10 companies are already UiPath customers. However, there are certain types of jobs that are more susceptible to RPA disruption.

According to a white paper from the Federal Government's Chief Information Officer Council, jobs that possess some or all of the following characteristics are likely RPA targets:

The Council identified specific business functions and processes that fit these criteria and are most likely to be disrupted by RPA. To understand the depth of disruption these functions are likely to face, consider that Gartner research recently found that the average amount of avoidable rework in accounting departments can take up to 30% of a full-time employee’s overall time. This equates to savings of 25,000 hours per year for an organization with 40 full-time accounting staff.