These firms are "well positioned" to benefit from potential workforce changes - GS

Investing.com - The risk of labor dislocations is likely to receive greater attention next year, as artificial intelligence threatens to supplant roles, according to analysts at Goldman Sachs Research.

In a note, the analysts including Evan Tylenda added that aging populations and lower fertility rates in developed markets are also shrinking productive labor pools, weighing on the availability of workers in certain industries.

"A demographic dilemma, in which developed market working populations are in decline and a shrinking productive labor pool is tasked with supporting an aging population, is presenting challenges for labor availability for certain industries, even as AI may reduce pockets of labor demand or labor force participation for women and older workers increases," the analysts wrote.

"There remain labor mismatches and growing labor gaps in many key technical sectors, such as Healthcare, Construction, Manufacturing, and Mining, along with low-skilled industries facing high employee turnover including warehouse workers, fast-food workers, and janitors/cleaners."

Against this backdrop, the analysts highlighted a range of companies they argue are working to find "key solutions" to these trends.

These strategies aim to improve worker quality and employee turnover, while maintaining productivity and keeping a lid on hiring expenses, the Goldman analysts said.

With these goals in mind, companies such as e-commerce giant Amazon, logistics group UPS, fast-casual dining chain Chipotle, construction engineering company Quanta Services, contractor Installed Building Products, and France’s Vinci could "see upside" from these solutions, they argued.

Amazon, for example, is exploring automation by using over 1 million robots across its global network of fulfilment centers to assist with 75% of all orders worldwide, the analysts noted. Chipotle has also invested in automating its avocado cutting and salad-building operations.

UPS, meanwhile, has launched an onsite emergency childcare program, which has helped to avoid more than 120 unplanned worker absences. Installed Building Products has moved to spend on retention efforts, offering longevity stock compensation plans, savings matching and financial wellness training to its employees.

Quanta Services has focused on providing education and training efforts to give its workers new skills, and Vinci has maintained specialized programs across various business lines, the Goldman analysts said.

All of these stocks are "buy" rated and "well positioned to benefit from improved operational efficiencies or revenue tailwinds from customers facing demographic challenge," the analysts said.