Young people entering the workforce are facing a “job-pocalypse”, as business leaders invest in artificial intelligence (AI) rather than new hires, according to a study of global business leaders.
Bosses are prioritising automation through AI to plug skills gaps and allow them to reduce headcount, instead of training up junior members of staff, a report by the British Standards Institution (BSI) found.
Four in 10 (41%) of bosses said AI was allowing them to cut the number of employees in a survey of more than 850 business leaders across seven countries: the UK, US, France, Germany, Australia, China and Japan.
Nearly a third (31%) of those surveyed said their organisation was looking at AI solutions before considering hiring a person, with two-fifths expecting this to be the case within five years.
In a sign of the challenges facing workers belonging to gen Z – born between 1997 and 2012 – at a time when the labour market is cooling, a quarter of bosses said they believed that all or most tasks carried out by entry-level colleagues could be performed by AI.
Susan Taylor Martin, chief executive of BSI, said: “AI represents an enormous opportunity for businesses globally, but as they chase greater productivity and efficiency, we must not lose sight of the fact that it is ultimately people who power progress.
“Our research makes clear that the tension between making the most of AI and enabling a flourishing workforce is the defining challenge of our time. There is an urgent need for long-term thinking and workforce investment, alongside investment in AI tools, to ensure sustainable and productive employment.”
In addition, two-fifths (39%) of leaders said entry-level roles had already been reduced or cut as a result of efficiencies made by using AI tools to conduct research or carry out administrative and briefing tasks.
While more than half of respondents said they felt lucky to have started their career before the use of AI became widespread, just over half (53%) also said they believed that the benefits of AI implementation in companies would outweigh the disruption to the workforce.
AI is being rapidly adopted by UK businesses, according to the business leaders surveyed, and three-quarters (76%) said they expect new tools to deliver tangible benefits to their organisations within the next 12 months.
Businesses said they were mainly investing in AI to improve productivity and efficiency, as well as cutting costs and filling skills gaps.
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BSI analysis of company annual reports found that the word “automation” appeared almost seven times more frequently than “upskilling” or “retraining”.
A separate survey revealed recently that half of UK adults are concerned about the impact of AI on their job, fearing it could take or alter their employment, according to a poll by the Trades Union Congress.
Britain’s jobs market has been cooling in recent months, and wage growth has slowed, with the UK’s official jobless rate at a four-year high of 4.7%. However, most economists do not believe this is linked to an acceleration in investment in AI.
Meanwhile, concerns are being raised that a stock market bubble has been created by high valuations of AI companies, which could lead to a market crash.
