Polish companies turn to robots as labour shortage bites
The Amica warehouse on the outskirts of Wronki, a small town in western Poland, towers over the surrounding countryside, houses up to 230,000 items, and can process 1,600 of them in an hour. But perhaps the most striking thing about the cavernous grey facility is that it can be run by just one person.
Instead of workers, huge orange robots driven by algorithms glide between 46m-high bays packed with washing machines and ovens, shuffling them around so they can be dispatched as quickly as possible to customers around the world.
Opened two years ago, the futuristic warehouse is central to Amica’s expansion plans. But it is also part of the Polish white goods group’s battle against the labour shortages that are constraining one of Europe’s fastest-growing economies.
“The lack of workers is one of the main problems in Poland today,” said Marcin Bilik, Amica’s chief operating officer. “Nobody can find people to work . . . and every year we lose about 100 [to retirement]. In future, there will be fewer Poles in our production, not more. This is our future. So we have to think about new technologies, and how to change our factory to use fewer people.”
The challenges facing Amica are a microcosm of those confronting much of central Europe. Across the region, rapid growth, unfavourable demographics and the legacy of a wave of emigration in the 2000s have driven unemployment to record lows — and businesses are locked in a ferocious battle for staff.
According to Eurostat, 49 per cent of Polish industrial companies say labour constraints will limit production in the coming quarter. In Hungary, the figure is also 49 per cent; in the Czech Republic, 39 per cent. In sectors such as construction, the pressure on margins has been so intense that business leaders have warned that weaker groups could go out of business.
To ease the pressure and boost its efficiency Amica has also invested in a bevy of robots for the factory next to its warehouse, where its ovens and washing machines are made. Mr Bilik said it would spend another 250m zlotys on automation over the next five years.
But overall Poland has some catching up to do. A recent report by the Polish Economic Institute (PIE), a government-funded think-tank, found the country had 42 robots per 10,000 workers. That lags behind not only Europe’s economic titan Germany (338), but Poland’s regional peers Hungary (84) and the Czech Republic (135).
“[Robots] can play a huge role,” said Piotr Arak, head of PIE. “This is the future of Polish industry if it is going to maintain its competitiveness in coming years.”
While Poland’s more forward-thinking companies are increasing spending on automation, many still also rely on migrants to plug gaps in the labour force. In 2018, Poland issued 635,000 residence permits to foreigners, more than any EU country.
The vast majority were Ukrainians, whose country shares close linguistic ties — and a complex history — with Poland. However, Polish business leaders fret that if Germany opens its market, many Ukrainians could head west. And so, albeit in far smaller numbers, businesses have begun looking for workers from elsewhere, such as Asia.
Amica is one of them. Around 400 of its 2,400 staff in Wronki are Ukrainians and this year, for the first time, it hired 15 people from Indonesia.
“It gives us some stabilisation because they come for at least one, or normally two years,” said Mr Bilik. “With Ukrainians, we have a high rotation because they tend to get permission to work in our factory for three or six months . . . and if they get a better salary, they go immediately.”
However in a region that is one of Europe’s most ethnically homogenous, immigration is a contentious topic. One far-right politician said last year that any government including immigration in its plans would be “a government of national treason”. And Poland’s deputy development minister was fired after saying the country needed migrants to maintain its growth.
As a result, analysts expect non-European migration to remain limited. But they see other ways for Poland to boost its workforce.
Iga Magda, from the Institute for Structural Research, believes the country could find 1m extra workers by making it easier for the young, over-50s and disabled to participate.
“The rate of ageing [of the workforce in Poland] will be the fastest in the EU in the next three or four decades so, given the rate of decline in the labour supply, it’s very important to look at all potential reservoirs of labour,” she said.
Amica has found another, less obvious source. It hosts 70 inmates from the adjoining prison whose crimes were minor enough for them to work outside, and it is building a workshop inside the prison to take another 200 who are not allowed out.
“Who knows, maybe in two or three years 500 prisoners will be working for us,” said Mr Bilik.
In the longer term, however, automation offers a more profitable solution to Poland’s labour problems. Not only will it ease the shortages, but it will also help shift the economy away from its reliance on cheap labour and towards more value-added activities — something to which the country’s politicians and citizens have long aspired.
“Obviously it is not possible to robotise everywhere . . . but Poland still has so much room to increase productivity that I think by automation you will be able to free up hundreds of thousands of people for other jobs,” said Witold Orlowski, chief economic adviser to PwC in Poland. “[It can have] a huge impact.”