ai-pocalypse Business leaders are racing to jump aboard the AI bandwagon, and a new study from the British Standards Institution suggests young college grads are being hit hardest.
BSI published a report this week that surveyed business leaders from eight countries around the world – including the UK and US – that found 39 percent of business leaders have already reduced junior and entry-level headcount in favor of more AI adoption. And it’s not stopping there.
The study found that a further 43 percent of business leaders expect to further reduce entry-level roles (which includes both cutting existing roles and not hiring new people) in the next year in favor of AI. A full 50 percent “specifically” said AI is helping them reduce headcount.
Not that those initiatives are paying off, mind you. A recent study from MIT found that 95 percent of enterprises have seen zero ROI on their AI projects – and that’s hardly a new story. IT decision makers surveyed last year were saying the same thing back then, and IBM found this past May that 75 percent of CEOs it surveyed were still looking for those elusive AI gains.
According to IBM, those leaders were adopting AI more because they were worried about missing out rather than getting actual results. BSI believes much the same.
“Businesses are … framing AI primarily as a driver of innovation and competitive advantage,” the report noted. “This may be driven by a fear of being seen to be behind their competitors rather than necessarily reflective of actual dynamics.”
Angry, young, and nothing to lose
With many entry-level positions drying up in the face of AI, BSI warns that the business world isn’t just saving itself money by eliminating jobs for an entire generation of young professionals; it risks creating a generation of jaded, frustrated people, too.
“A cohort already impacted by disruption from Covid-19 to their schooling and adolescent development [is] now facing an uncertain employment future with potentially little opportunity to hone their skills or build industry knowledge,” BSI said.
What’s worse, survey respondents seem content to pull the foot-in-the-door ladder up behind them to save a few bucks on headcount.
“Business leaders may feel sanguine about the impact on junior workers, but … they also feel relieved to be past this point in their career,” BSI noted. That view “may not surprise younger generations convinced their predecessors have had it better.”
BSI found that 56 percent of business leaders feel lucky to have begun their careers before AI came on the scene, and 43 percent said that they probably wouldn’t have the skills they have now if AI tools were around when they started off.
In other words, yeah young people are screwed thanks to AI and business leaders are thrilled they’re not in the same position. 55 percent of them told BSI that “the benefits of implementing AI in organizations are worth the potential disruptions to workforces.”
ROI TBD, we suppose.
There are no short-term gains
Along with eliminating entry-level jobs, BSI found that companies seem increasingly willing to ditch workers who may need retraining for the AI era with bots.
“In the study of annual reports, the term ‘automation’ is nearly seven times more prominent than upskilling, training, or education,” BSI said. Annual reports from 123 companies were reviewed alongside the survey of business leaders.
“The relatively lower prominence of workforce-related topics suggests businesses may be underemphasizing the need to invest in human capital alongside technological advancement,” BSI added.
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None of this probably comes as a surprise to those following the impact of AI on jobs, which we’ve reported on extensively at The Register. In August, Stanford researchers noted a 13 percent decline in occupations most exposed to AI, like software development, compared to other professions.
Young people are definitely being hit the hardest, with the Bureau of Labor Statistics noting a 9.2 percent unemployment rate among people aged 20-24 in August – right around the typical age of a new college graduate – compared to 4.3 percent for the overall workforce, but, if businesses are prioritizing AI adoption over employee training, it may only be a matter of time before everyone’s swept up in the latest automation wave.
Business leaders seem to know that, too – at least some of them. 28 percent said their roles are likely to disappear by 2030. After all, why eliminate a low-paying, entry-level job and not consider the overpaid CEO’s responsibilities as ripe for automation, too?
While some research has found that AI hasn’t led to lost jobs, and some business leaders have argued that replacing junior workers with AI is a bad idea, the bosses themselves – at least the 800 or so BSI talked to – are asserting the contrary despite a lack of evidence that AI investments are paying off.
All of that, RSI said, points to a business culture of short-term thinking that could leave AI-centered businesses up the creek without a human to paddle their canoe if AI investments don’t pay off.
“An AI-enabled workforce will still need to be developed,” the Institute wrote, noting that prioritizing the elimination of entry-level jobs could leave organizations without a talent pipeline. Those who end up in senior roles may end up without necessary experience to occupy the next generation of leadership positions if they don’t have entry-level experience, BSI explained.
“The future belongs to skills that machines can’t replicate — for example creativity, empathy, collaboration,” BSI concluded. “Businesses must evolve to nurture these human strengths, alongside technical literacy.” ®
