Research conducted by the Inter-American Development Bank concludes that up to 43 million jobs will be affected by the introduction of AI in the next year. However, this is not an estimate of job losses. Instead, it’s an indication of the vulnerability of certain occupations – an early warning that planning for AI’s impact on the job market is needed. 

AI is a game-changing technology, and its impact on the way we work has been equated to the changes brought about by the Industrial Revolution. Just like its precursor, the AI revolution is controversial. Some believe that the rise of AI is a threat we should all be concerned about. Jobs, particularly lower-skilled jobs, will be lost, and there are fears that this might lead to increased unemployment and greater social inequality. 

To others, AI represents an opportunity for all. It can channel people away from repetitive, routine tasks and towards far more interesting and varied work. The vision is that a positive partnership between workers and AI will result in higher levels of efficiency and more opportunities for enrichment. 

The truth about AI is that there are both pitfalls to avoid and advantages to be realized. We are certainly in the midst of a technological transformation. Like all changes, it triggers both hopes and fears, pessimism and optimism. A look at our changing understanding of AI over the decades illustrates this. 

How has our understanding of AI’s impact on the job market changed over time?

Many people will remember 20th-century science fiction featuring intelligent robots. They were often benign, helping people to enjoy a more leisurely lifestyle. Today, some people adhere to the belief that AI will do just that. At the same time, it’s clear that AI will reduce the need for people in certain industries. This has sparked debates about AI’s impact on society, raising questions on how it can be leveraged in a way that benefits everyone.   

These conversations are still ongoing, and many of the points raised remain valid as we stand poised on the brink of an AI revolution. For almost every negative statement, there is a positive counterstatement, and vice versa. For example, while some authorities fear that AI’s impact on jobs will impoverish vulnerable members of society, others believe that it will lead to greater prosperity for all.  A 2023 survey of working-age US adults published by Pew Research Centre provides food for thought. 19% of US adults believe that AI’s impact on jobs would positively affect their personal welfare. 34% expressed that AI would have both positive and negative effects on their professional lives. 17% believed that it would have purely negative consequences for them. 

Potential impacts of AI on employment

The International Monetary Fund (IMF) indicates that 40% of jobs worldwide are exposed to AI. Its findings indicate an imbalance between potential impacts in advanced economies compared to developing economies. In advanced economies, up to 60% of jobs could be impacted by AI, while in developing economies, the figure falls to 40%.  

The organization concludes that roughly half of AI-impacted jobs will be enhanced by AI, while the other half may be replaced by AI, resulting in job losses. Based on these considerations, the IMF fears rising unemployment and therefore has urged governments to strengthen social safety nets and fund training programmes for affected workers. However, there is not a full consensus regarding these findings. For instance, PWC predicts a decrease in employment opportunities of around 27% while underlining that the total number of jobs available will continue to rise. 

The slowdown in demand for employees in the United States must be viewed against the background of a society where labor shortages have become increasingly common. An aging population leads to a lower workforce participation rate, posing challenges for recruiters. PWC’s employment forecast offers a reassuring perspective on AI’s impact on the workforce. However, people will need to become accustomed to working with AI, and some may need to reskill since there will be a reduced need for people in certain roles. 

What jobs and sectors are most at risk and which are not?

Jobs at risk

Data analysts and underwriters

AI is already impacting data analysis jobs. AI’s ability to rapidly process large data sets means that the demand for human input will continue to fall. Underwriters are data analysts of a different kind. They’re trained to evaluate risks, but once again, AI algorithms can replicate many of the activities they traditionally performed. 

Customer service representatives

Repetitive processes that can be learned by rote will be affected, with reduced demand for human workers. This can be seen in current trends in customer service. It’s increasingly AI-first, with humans intervening when it is unable to serve customers effectively. Because many customer enquiries are routine, AI is able to field them with ease. Humans are only needed for more complex interactions and fewer people are required to fulfill customer service roles.

Professional writers across industries

Large language models allow AI to perform complex language-based tasks like drafting legal documents, creating marketing copy, or writing media reports. Human intervention may still be needed to verify that texts are fit for purpose, but AI will do the bulk of the work. Once again, fewer people are required. 

Accountants and bookkeepers

Accountants and bookkeepers will be familiar with automation. However, AI will automate additional aspects of their work and be sufficiently competent to verify accuracy. For example, there will be less need for employees to ensure that all necessary data is collected and analyzed correctly.

Warehouse workers

Large-scale automation in warehouses isn’t new. However, AI has the ability to manage automation intelligently, plan delivery routes and loading schedules, and locate missing items, reducing the need for human personnel.  

Clerical jobs

Clerical support jobs are increasingly affected by automation and AI. Processing and storing documents, information-gathering tasks, and even acting as personal assistants are all activities that are within the scope of AI. 

Jobs not currently at risk

AI is at its best when working with facts and figures in standardized environments. This makes it unable to replace people who work in professions that require adaptability, interpersonal skills, emotional intelligence, and the ability to evaluate unique situations. Examples include:

CEOs and upper management

No matter how intelligent AI may become, people will still be needed to provide leadership, make decisions and formulate strategies. Managers will be assisted by AI and analytics, and AI may even offer suggestions, but people must still decide which courses of action are the most appropriate. And, since people are able to think creatively, their uniquely human ideas may result in strategies that exceed AI’s capabilities.  

Skilled artisans

Although AI may be able to help them with information, it would be unable to replace skilled artisans like plumbers and electricians. Their work requires manual dexterity, problem-solving skills and flexibility since every context in which they work is unique. 

Teachers, psychotherapists, and healthcare professionals

Tasks that require interpersonal rapport are beyond AI’s capabilities. Besides the need for the “human touch,” the daily work of these professionals is very varied, making it impossible to standardize and automate to any meaningful or impactful level. 

Creative professionals

AI is able to write and it can create artworks, films and music. However, everything it does is based on prior learning. Although combinations of existing works can produce a unique result, only humans can create fresh, new ideas. In addition, AI lacks emotional intelligence, a key component of creativity. 

Personal services professionals

Hairdressers, personal trainers, business consultants, and life coaches must all be able to deal with unique scenarios, using creative thinking to satisfy their clients’ needs. In addition, their clients are not always able to express their needs clearly, requiring human ability to determine customer requirements. 

Which groups of people are most likely to be affected, and how can they be protected?

In general, workers with lower levels of education who perform routine tasks will be at higher risk. However, it’s worth mentioning that women stand to be disproportionately impacted by the rise of AI. It’s projected that 40% of working women will be affected compared to 38% of men. Women have greater representation in clerical, service, and support roles, making their jobs vulnerable to AI.

The primary concern is that the rise of AI will have the greatest effect on those who are already lower-scale earners. Wealth inequality and a shrinking middle class are of concern in today’s America, and it is feared that AI may widen the wealth gap even further. The Stanford Social Innovation Review (SSIR) suggests three important changes to mitigate the social impact of AI in the workplace.

1. Recognize workers as a key resource

Technology should be used to augment workers’ productivity rather than as a means of replacing them. A workforce should be seen as a resource rather than a cost, and with training in new methods and tech tools to help them, both employers and employees stand to benefit. Workers, argues the SSIR, are important to the long-term health of companies and reducing workforces counteracts AI’s capacity to increase productivity. 

2. The tech sector should re-prioritize people

Human equivalence has been stated as a goal in AI. This would mean that the current focus is on automating as many jobs as possible, replacing workers instead of helping them to do more. However, there have been calls for the tech sector to adopt a more measured, socially responsible approach to disruption. For instance, the SSRI says the tech industry should devote greater consideration to how it can assist workers. This would mean augmenting worker capabilities and making their jobs easier, serving as a useful tool that helps them to achieve more.

3. Give labor a voice

Determining how AI impacts jobs is invariably a high-level decision. However, the workers themselves know where automation would be efficient and where it may be less satisfactory. For example, receptionists and customer service agents would be justified in saying that most customers dislike talking to robots. However, they will concede that a chatbot is perfectly capable of providing a client’s latest account statement. The takeaway is that giving labor a voice in how technology is deployed will enhance task quality outcomes and productivity. 

How can AI’s impact on jobs be leveraged to benefit companies and employees?

The International Organization of Employers (IOE) sums up AI’s impact on jobs as job displacement, job augmentation, and job creation. It refers to a report from the World Economic Forum that predicts an overall net gain in jobs in the wake of AI deployment. The new jobs will require people who are trained to interact with, supervise or train AI. 

Employers should therefore equip existing workers with new skills. In augmented jobs where AI does the heavy lifting but humans are needed for oversight, existing skills must be enriched so that employees can use AI effectively. Training needs will include re-skilling for people whose jobs will be automated. By deploying and optimizing existing workforces, employer organizations will be able to maximize growth opportunities instead of using AI as nothing more than a means of cutting costs through layoffs.

At the same time, there are still opportunities to save costs. Employers and organizations will be able to achieve more than ever before. They can save by using AI for automatable tasks, while their people perform work that only humans can do. In doing so, they will augment outputs and reduce costs.

Employees will benefit from upskilling. They will undertake more interesting, varied tasks and enjoy greater recognition for purely human qualities such as their interpersonal skills. When organizations take an active role in empowering employees so that they can work effectively in an AI-enabled workplace, they can expect gains in employee loyalty, job satisfaction and workplace engagement.  

How can employers address people’s concerns about the impact of AI on the labor market?

Employees are justifiably worried about AI jeopardizing their jobs and careers. Employers can help in several ways. 

Communication

Discuss the ways in which AI will be used in the organization with employees and explain its benefits. Provide clear information about what will be done to enhance job security and how AI-driven changes will affect employees. Invite discussion and collaboration to help employees feel invested in AI-driven workplace optimizations. 

Emphasize augmentation over replacement

Demonstrate how AI will enhance human capabilities and add interest to employees’ daily routines. Commit to a policy of augmentation over replacement, providing examples of how AI will streamline tasks so that workers can focus on higher-value activities. 

Provide training and upskilling opportunities

Training programs will help employees develop skills that will complement AI. Besides equipping them to adopt new work methods, it will help them to gain greater confidence in their continued value within the organization and in the wider jobs market. 

Develop reskilling opportunities for affected workers

Certain roles may be affected by AI to the point where replacement is inevitable. Identify transferable skills that can be used in redeployments and seek out opportunities for internal mobility. For example, a streamlined, AI-assisted customer service team may not need as many staff on hand. However, excess capacity may be redeployed in other customer-faced roles such as PR.

Monitor impact and adjust strategies

Monitor the impact of AI on employees and the organization, adjusting strategies as needed and addressing emerging concerns. For example, AI bias has presented challenges in the past. AI learns from humans, and if training data is skewed, AI will reflect that. For instance, self-driving car software was found to be biased against children and people with darker skin because of gaps in its training data. When AI has negative impacts, it will be crucial to have personnel on hand to strategize and implement corrective action. 

Offer confidential HR support and counseling

Encourage employees who are concerned about their job security to seek support and career planning services from HR. This will reassure employees who are feeling anxious about their roles and pave the way for career development. 

Encourage innovation

Employees may offer fresh ideas and notice new opportunities that have come to light thanks to the increased capacity that AI allows. This not only fosters business growth, but may create fresh work opportunities for employees that might otherwise have been displaced.  

Emerging technologies bring change: adjusting can be difficult, but outcomes are positive

Adopting new technologies brings change. Even beneficial change can be uncomfortable, but job markets and employees adjust, and the results can be extremely positive. 

Humanity is not new to dealing with the consequences of radical tech-driven change. History shows that time-consuming, labor-intensive tasks are the first to be replaced when new technologies are introduced. This occurred in industry and agriculture with the advent of mechanization. Many breadline jobs were affected and initial societal impacts were particularly uncomfortable for workers that were replaced. Over time, workers moved to higher-level, better-paid tasks, ultimately enjoying enhanced opportunities and a better lifestyle. 

The rise of AI presents us with a similar situation, and we are well-positioned to manage transitions and minimize negative impacts on society better than our forebears did. By facilitating and fast-tracking the process of upskilling and reskilling, employers can achieve outcomes that not only benefit their businesses but the people who work for them.