During the pandemic (2019–22), a 50% increase in the number of occupational shifts took place, in particular people leaving food services, in-person sales and office support for other occupations.
Covid-19 had a major influence on the nature of work, such as the introducing of remote or hybrid models of work. It also contributed to the “Great Resignation” of 2021, when record numbers of employees voluntarily quit their jobs.
What is interesting is that accommodation, food services, in-person sales, office support, leisure and hospitality had the highest resignation rates, while retail trade and non-durable manufacturing experienced the greatest growth in employees who joined the company. The increased turnover have not been limited to low-wage workers only, but included professional and business service employees.
The influence of artificial intelligence (AI)
The launch of ChatGPT has seen the fastest adoption rate in history and is widely used for a variety of tasks in business. The rapid development of generative AI has therefore extended the possibilities of automation to numerous occupations. The work environment will probably never be the same again.
In June 2023, McKinsey published an extensive report on generative AI and the future of work. Although the study is mainly about America, many of the trends are an indication for the rest of the world of what the future of work entails.
Automation is reshaping the market
McKinsey predicts that due to the influence of generative AI about 30% of work hours will be automated in the next decade. Millions of occupational transitions will happen due to the introduction of generative AI and accelerated automation.
Generative AI is in its early stages, but the potential applications are numerous and wide-ranging. One of the most impressive developments in AI is in natural language capabilities. Generative AI can be used to write code, design products, create marketing content and strategies, make operations more efficient, analyse legal documents and contracts, provide customer service and support via chatbots, and even speed up scientific discovery. Generative AI thus accelerated automation adoption.
The biggest effect of AI and automation on work will probably be in:
– Office support due to the increased number of people working remotely, for example, office clerks, secretaries, administrative assistants, and first-line supervisors of office and administrative workers. Numerous software apps are available to fulfil the tasks.
– Customer sales and service due to the shift to e-commerce, thus impacting retail salespersons and cashiers.
– Food services such as fast food and counter workers, waiters and waitresses that are impacted by the use of intelligent robots.
– Production work such as manufacturing where robots will have an impact on labourers; freight, stock and material movers; production helpers, and machinists.
The popular assumption today is that the deployment of automation technologies tends to mostly affect workers with the lowest levels of skills. This means that automation is “skill biased”. Generative AI turns the assumption on its head by automating some of the activities of knowledge workers at the higher end of the income spectrum.
Although lower wage workers may be the hardest hit by automation, it will increasingly spread to higher-earning knowledge workers and will possibly affect people such as computer programmers, scientific researchers, market researchers, translators and financial advisers.
Although generative AI will accelerate automation, it will enhance, rather than eliminate, the way science, technology, engineering and mathematics (Stem), health care, business, legal, education, and workforce training professionals work in the medium term.
Job transitions are usually needed when workers are involuntarily displaced from their job by automation, a shift to e-commerce, the phase-out of a high-emissions activity, or some other trend, and they are unable to find a new job in the same occupation because of declining demand.
Unfortunately, people earning lower wages – disproportionately represented by less education and women – are 10 to 14 times more likely than the highest earners to be forced to change occupations by 2029.
Changing occupations often requires new skills and is more challenging than finding a new job within the same occupation. People in the declining job categories such as office support and customer service will thus need access to training programmes with an emphasis on social-emotional and digital skills. Less emphasis should be placed on cognitive skills since most routine tasks will be handled by AI such as in the case of warehouses and assembly lines.
Workforce development and reskilling will become an imperative since employees will be hired for their skills and competencies rather than their credentials. Training will have to keep up with the evolving needs of business. Perhaps the relatively new trend of micro-credentials, including digital learning and employment records of kills acquired across companies, is one way of approaching this opportunity.
The future of work
Generative AI will certainly lead to job losses in certain occupations, at least in the short and transitional term, until workers have been retrained in new skills and the educational curricula have been adapted.
The mix of jobs will probably also change. As people leave shrinking occupations, a large number of lower-wage workers will change positions. They will need to be re-skilled to transition successfully. Interesting is that McKinsey found that women are 1.5 times more likely to be forced to move into new occupations than men.
All over the world, employers are experiencing difficulties in the hiring of employees for roles that do not require university degrees. Employers will have to consider improvements in job quality, pay, benefits and a stronger promise of career advancement. The alternative, is a higher level of automation – a popular solution in South Africa due to the high incidence of labour unrest and strikes.
However, some lower wage occupations (such as home health-care aides due to the ageing population in many countries) will remain in high demand in the coming years. Over time, even some of these workers may be replaced by AI-driven robots.
Technological disruption brings growth
Technological advances often cause disruption but, eventually, they fuel economic and employment growth. Generative AI could thus add many jobs in the coming years and will surely and significantly change the mix of work activities for knowledge workers.
Due to the fast pace of developments in technology and AI, employers will probably have to change their hiring strategy and focus on the ability of candidates to learn, their intrinsic capabilities and their transferable skills, rather than an emphasis on experience.
There is thus a necessity to ready ourselves for ongoing and significant changes in the job landscape over the next few decades. Millions of jobs may be phased out while new jobs will be created. Ensuring the readiness of employees for impending job demands stands as a primary concern for leaders spanning the business, governmental, and societal domains.
If managed effectively, this era of work transformation has the potential to foster a more inclusive economy with a higher growth in productivity. The future of work is no longer a distant prospect, but a reality we are immersed in.
Professor Louis C H Fourie is an Extraordinary Professor in Information Systems at the University of the Western Cape.