How AI will transform the job market

Artificial intelligence is about to disrupt the job market, but labor experts say some workers are getting more attention than others.

Roughly one in four (or 26%) jobs posted on the career site Indeed in the past year are poised to be “fundamentally transformed” by generative AI (also known as Gen AI), according to a September report from Indeed.

Gen AI (such as OpenAI’s Chat GPT and Google’s Gemini) mimics the power of the human brain by creating original content such as text, images, video, audio, and software code from user prompts.

Laura Ulrich, director of North American economic research at Indeed, said industries where artificial intelligence could replace human cognitive reasoning skills, such as certain jobs in technology and finance, are most at risk.

“White-collar jobs are likely to see a high degree of transformation,” Ulrich said.

In contrast, certain roles, such as nursing and blue-collar jobs in manufacturing and construction, are more isolated, Ulrich said.

That’s because jobs that rely heavily on manual labor and human interaction remain, at least for now, outside the scope of current generative AI, according to the Indeed report.

A 2023 Pew Research Center study found that jobs in “high-paying fields where a college education and analytical skills are a plus” are most exposed to artificial intelligence. Budget analysts, data entry keystrokers, tax clerks, technical writers, and web developers were found to be examples of such jobs.

Overall, 19% of American workers in 2022 will have jobs that are “most exposed to AI,” with the most important activities likely to be replaced or assisted by AI, the Pew study found.

Some companies are already hinting at job cuts due to AI.

For example, the CEO of Accenture, a global professional services firm, recently outlined plans to lay off staff who cannot be retrained in artificial intelligence. sales force CEO Marc Benioff announced in late August that the company was cutting 4,000 customer support roles because of AI.

“We needed fewer animals, so we went from 9,000 to about 5,000,” Benioff said at the time.

However, economists say the extent of the change is currently minimal.

Despite widespread anxiety about the impact of AI on today’s labor markets, an October 1 report from the Yale Institute for Budget Studies says such concerns remain “largely speculative.”

“Overall, our indicators indicate that the broader labor market has not experienced any measurable disruption since the release of ChatGPT 33 months ago, allaying concerns that AI automation is currently eroding demand for cognitive labor across the economy,” the researchers wrote.

Experts say the technology also has some flaws. For example, AI can still produce hallucinations or inaccurate tasks.

So far, Gen AI has had limited impact in completely replacing certain skills, Indeed’s research found.

The technology is “very likely” to completely replace just 19 job-related skills, or 0.7% of the nearly 2,900 skills analyzed by Indeed. These include, for example, basic mathematics, prompt engineering, and image classification.

According to Indeed, this analysis only measures the technology’s “transformative potential,” meaning if all businesses fully integrate the technology into their workflows.

However, many companies say they are not yet there.

The big debate about AI’s impact on the job market comes down to expansion and automation, Tubia said. “Will AI automate jobs and make them obsolete, or will it augment jobs and increase productivity?”

The answer may vary depending on your industry. For example, some companies may decide to use agent AI to fully automate their customer service or call centers. On the other hand, human programmers can use AI to create and generate lines of code, increasing their productivity.

Indeed’s Ulrich said that so far, most industries are using AI in this kind of “hybrid” capacity, where humans and AI coexist.

According to Indeed, nearly half (46%) of the skills listed in typical U.S. jobs are ready for hybrid transformation with Gen AI. In this state, human supervision is essential, and AI can perform a significant portion of daily tasks.

According to a survey of 828 decision makers conducted by Homebase in May and June, about 64% of small and medium-sized businesses are using or piloting AI tools to varying degrees.

Indeed’s report says that in the future, most jobs (54%) are likely to be “moderately” transformed by generative AI, depending on how quickly companies adopt the technology.

While experts agree it’s difficult to predict what the future will hold, Toubia said a potential long-term impact of AI could be the creation of new jobs and industries that don’t yet exist.

Overall, he said, it’s important to start finding ways to interact with AI in productive ways. If you ignore this technology completely, Tubia says, “it can become obsolete very quickly.”