The intersection of artificial intelligence (AI) and the future of work is crowded and a bit confusing these days.
On one hand, companies like Google and Duolingo have cut staff recently with the implication that AI was the underlying cause. On the other hand, the prevailing wisdom among CEOs and various analysts indicate that AI is not coming for your job. But it will be a major factor in how your work gets done.
“The business landscape will undergo a series of macroeconomic shifts as GenAI adoption increases,” HR think tank The Burning Glass Institute wrote in a report. “Early adopters will experience a leap in worker productivity as AI automates, augments or transforms various job roles. However, the surge in output is unlikely to meet a corresponding growth in demand for goods and services, leading to overstaffing in many industries. In a competitive market characterized by an oversupply of labor, company leaders will feel compelled to make difficult decisions, the most widespread of which are likely to be workforce reductions.”
The report’s main thesis is that productivity and overall revenue will spike in the short term as employees learn to use AI in their day-to-day work life. However, this productivity will hit a wall that will force some tough decisions, much like the ones faced at Google and Duolingo.
The Burning Glass Institute ranked dozens of industries and specific job functions by what it called an “exposure to AI” index. At the top of the list: Mortgage brokers, investment banking, commercial banking, accounting and investment advice.
The reason: these job functions are centered around data analytics, market analysis and creating predictive models — all tasks that generative AI can streamline.
But not scenario is as pessimistic as Burning Glass makes it out to be, and recent banking layoffs have been tied more to economic uncertainty than the AI effect.
It identified three potential outcomes of AI’s influence on work. The first is job creation, especially in the automotive and aerospace industry, where 73% of companies expect employment gains. The research, design and business management services, information and technology services, and electronics sectors follow closely behind.
The second one centers around the kinds of jobs that it will create. AI and big data are the number one skills priority, the WEF said, for companies with more than 50,000 employees.
The third scenario is that tasks will be augmented, not completely automated, by AI. This finding is rooted in data that shows only an additional 9% of operational tasks will be automated in the next five years – a reduction of five percentage points compared to expectations in 2020.
Those findings were underscored by several CEOs who spoke at The WEF Forum in Davos.
“Short term, [AI is] a job creator,” said L’Oreal CEO Nicolas Hieronimus. “Half of the hirings we’ve been doing over the last three years has been either related to data or to AI. So right now, it’s creating jobs. Mid-term, I see my teams, they’re all working too much, and they’re desperately hoping to have some sort of solution that helps them crunch the data … There may be some industries or some type of jobs where it’s going to be a bit more radical, but I see this as a real way to free time and probably get our employees to have a better work-life balance.”
As Hieronimus implied, training and education are critical to the deployment of AI. But are companies investing enough in it?
A research survey from global insurance brokerage Arthur J. Gallagher said they’re not. It found that only 10% of the corporate communications professionals it surveyed were familiar with AI usage within their organization. The report came with a warning from one of Gallagher’s senior executives.
“For many organizations, it’s the Wild West with regard to how they are adopting and implementing AI,” Ben Reynolds, global managing director of Gallagher’s Communication Consulting Practice, said.
“Because so few organizations have an AI plan, we can connect the dots to better understand why half of the respondents (50%) are skeptical or even fearful about the impact of AI,” he added. “That said, with an AI plan in place, the technologies may help communicators overcome what they’ve identified as two of the top three barriers in 2024, which are the lack of time and lack of financial resources.”