Generative AI (Artificial Intelligence) is proving to be a transformative force across the labour market and the wider economy, offering the potential to revolutionise industries, boost productivity, and improve overall living standards. “Widespread AI adoption could drive a $7trn increase in global GDP over ten years” according to Goldman Sachs and result in an annual increase in labour productivity of 3% for firms that adopt AI, representing almost double the productivity gain attributed to the electric motor or personal computer. AI is on course to enable an altogether smarter way of working, eliminating mundane tasks and unleashing creativity.
Is AI a threat to your job?
However, as AI continues to advance and becomes more deeply integrated into the workforce, there is an increased risk of job displacements and redundancies across industries. Goldman Sachs in March 2023 forecast that AI could disrupt over 300 million jobs globally. Where previous technologies have typically impacted lower-skilled jobs, the rise of Generative AI poses a greater risk to the employment of higher-skilled workers, who represent almost 20% of global employment. Unlike traditional AI, which typically focuses on specific tasks based on predefined rules and patterns, Generative AI can think flexibly across multiple fields and rapidly analyse vast data sets to generate content indistinguishable from human work. Generative AI’s impact already has tangible applications across previously safeguarded industries, threatening jobs in healthcare, marketing, software engineering, and HR to name a few. Specifically, the recruitment process is a strong contender for significant automation. Intelligent candidate screening, automated interview assessments, and AI-driven chatbot communications are helping drive automation. AI can be used to rapidly identify the best candidates and their fit within an organisation without any human involvement. Whilst it is unlikely that AI will fully replace human intuition across the recruitment process, the technology will allow for a significantly reduced workload. In line with this, BT outlined plans to eliminate up to 55,000 jobs by the end of the decade as a result of AI, with a significant portion of these cuts occurring in the UK. Meanwhile, IBM has chosen to halt hiring for roles that AI could efficiently fulfil.
"85 million jobs will be lost as a result of AI by 2025"
Eliminate to regenerate.
Yet, history reminds us that AI-driven innovations do not just eliminate, they regenerate – over the past eight decades, technological advancements stemming from the Industrial Revolution and the rise of computers have been responsible for over 85% of employment growth. PwC's report for former BEIS suggests that while AI will not spark mass technological unemployment, it will orchestrate substantial changes in job landscapes across occupations, sectors, and regions over the next couple of decades. The World Economic Forum estimates that 85 million jobs will be lost as a result of AI by 2025, but critically, 97 million new jobs will be created. Net employment will still be positive, but it is the demand for roles that will noticeably change. There will be a reallocation of labour with inevitable winners and losers representing AI's dual nature: a potential disruptor of jobs and a catalyst for productivity gains, fresh opportunities, and the growth of new industries.
It seems AI is a threat to some jobs, but professions in AI research, data science, and machine learning engineering are in high demand, reflecting the evolving landscape of roles that facilitate AI's development and implementation. AI complements human labour across sectors, enhancing efficiency and precision, rather than replacing it. AI will free up time to allow professionals to focus on more meaningful, creative, and strategic work, with the elimination of more mundane repetitive tasks.
In conclusion
AI may not be destined to make workers obsolete but rather to redefine the nature of work itself. While some roles may become automated, others will evolve alongside AI, requiring human oversight and expertise. The extent of job displacement depends on industry dynamics and the pace of AI adoption. Successful navigation of these changes requires meticulous planning, government oversight, corporate responsibility, and workforce reskilling. As we embrace the opportunities offered by AI, we must also address its challenges, aiming for a future where AI and human potential coexist harmoniously in the workforce.
If you are thinking about adopting AI and would like to learn more about the impact and benefits it can have within HR and Finance functions, please get in touch and one of our AI team members will be happy to share their thoughts at contact@veranperformance.com
Sources
BBC Article about BT Layoffs: https://www.bbc.co.uk/news/business-65631168
BEIS Research Report (PwC): https://assets.publishing.service.gov.uk/media/615d9a1ad3bf7f55fa92694a/impact-of-ai-on-jobs.pdf
Goldman Sachs Article: https://www.goldmansachs.com/intelligence/pages/generative-ai-could-raise-global-gdp-by-7-percent.html
BBC Article about Apple AI hirings: https://www.bbc.co.uk/news/technology-66954267