AI is already disrupting the job market
Recruiters value soft skills as a way for employees to prove their worth to the company.
Companies that invested heavily in artificial intelligence employ more workers than those that invested little, according to a new study, challenging the theory that large-scale adoption of artificial intelligence will lead to job losses.
A Reuters/Ipsos poll released in June found that most Americans, 53%, are worried that they or someone in their household will lose their job due to AI. To see if their concerns were valid, researchers from financial technology company Ramp and workforce intelligence company Revelio Labs compared AI spending and employee data from 21,559 U.S. companies.
They found that over two years, “low-intensity” adopters, or those who spent an average of $2.78 per employee on AI, saw little change in their employee numbers. Meanwhile, “active” hiring companies that spent an average of $33.67 per employee grew their headcount by 10.2%.
Over the same period, the number of new employees at high-intensity companies increased by 12%. This is contrary to predictions and concerns that younger or less experienced workers are most at risk of losing their jobs to AI.
range
The survey sample is not nationally representative, as it focuses on technology-advanced companies and white collar workers. The study does not include drivers who could lose their jobs to self-driving cars or who could lose their roles to manufacturing automation, said Ara Karajian, chief economist at Lamp Economics Lab.
But Karazian said their findings are important because previous studies focused on industries exposed to AI but failed to compare AI spending with staffing levels at the same companies.
Still, the researchers haven’t ruled out the possibility that numbers may change after the two-year follow-up period. They plan to update the results regularly as more data becomes available.
What it means for workers
Americans’ fear of AI didn’t suddenly come out of nowhere. Several major companies, including Amazon, Meta, and Salesforce, have announced layoffs related to AI implementation. However, an October study from the Yale Institute for Budget Research found that the broader labor market has not experienced “any measurable disruption” since the release of ChatGPT, noting that broad technological impacts are typically felt over decades rather than months or years.
Harajian said the unknown long-term effects of AI leave today’s job seekers in a confusing position.
“If you’re an entry-level employee in the job market or just graduated from college, it’s very difficult to know what to do,” says Karazian. “Would I join a company that uses AI and worry about getting fired because that’s the folklore? Or would I join a company that doesn’t use AI at all and risk not learning this new technology that everyone is telling me to use?”
After crunching the numbers himself, he said he would tell the job seeker to join a company committed to AI.
“What we do know for sure is that work is changing,” said Nicole Bashaw, an economist at ZipRecruiter, adding that people are looking for flexible, adaptable and good learners. “Clerical and administrative clerks probably need more technical literacy today than they did five years ago, while software developers probably need more interpersonal skills than they did five years ago.”
So, will AI take away people’s jobs?
Although one research paper can’t definitively answer this question, economists seem to feel more optimistic about the impact of AI on jobs than American workers.
A World Economic Forum report in January estimated that new technologies, along with other economic and demographic trends, will create 170 million new roles and replace 92 million in other roles by 2030.
Cory Cantenga, head of Americas economics at LinkedIn, said it makes sense for companies that are investing heavily in AI to increase their headcount for several reasons.
First, if companies can spend more money on new technology, they are likely to be able to spend more money on labor costs. Second, if your AI startup is doing well, you’ll naturally need to hire talent, marketing, and sales staff as you grow. Third, if AI adoption goes as planned and creates new growth opportunities for existing companies, they will need to hire more employees to pursue that growth.
Kantenga gave examples of companies using AI to research and identify potential customers. Once the AI agent spits out a list of new prospects, “you need a business development person who can call them and actually close the deal,” he said.
Kantenga added that concerns about workforce reskilling and development should still be taken seriously given the speed at which AI is changing workflows.
“Having said that, do you think there is any prospect of unemployment reaching 50% within two years?” he said. “No, it’s not.”
What it means for business
The widespread adoption of AI holds great promise, especially when it comes to productivity. Bashaw says promises made without hard data to back them up are a reason to pause.
“Many of these companies still haven’t been able to really measure what impact AI is having and how it’s actually leading to this massive productivity increase that people are expecting,” Bashaw said. “We have this excitement. We have the capability. What is it actually doing and how can we measure it and actually determine, is this all worth it?”
Harajian said business owners shouldn’t be surprised if they haven’t seen positive results yet.
“Our research shows that the vast majority of companies using AI are not seeing results today,” Karazian said. “What we found is that you only see results if you use AI at a certain intensity. Perhaps there is a threshold requirement where you have to use a certain amount of AI, and you have to use AI consistently before you start to see results.”
He added that successful AI implementation will likely require organizational transformation and employee-level learning to understand how to use AI effectively.
“But if you’ve tried it and you’re not getting those benefits and you’re wondering if you’re doing it wrong, I can tell you that it’s quantitatively supported,” Karazian said. “But there is still room for growth.”
Contact Rachel Barber rbarber@usatoday.comFollow her on X @rachelbarber_and subscribe to her newsletter Making More of Your Money here.
