Is Gen AI Impacting Jobs Yet?

Two years after the launch of ChatGPT, the effects on the job market are mixed. Some creatives are finding less demand for their services, while others are still waiting for the other shoe to drop.

While companies like Swedish payment services provider Klarna are already reporting (rather provocatively ) that they are replacing human workers with AI, the full impact of this shift is yet to be seen. At the same time, a clearer picture is emerging of what occupations are already affected and which ones are likely to see disruption in the future.

A slow start - but cuts are coming

In the fourth quarter of 2024, a Challenger Report found that in the nearly year-and-a-half previous, fewer than 17,000 jobs in the U.S. were lost to AI. But a World Economic Forum (WEF) survey found that 40% of employers expect to reduce their workforce over the next five years in areas where AI can automate tasks.

Meanwhile, 62% of Gen Z think AI will replace them within a decade, according to a 2024 general Assembly survey. They may be right.

Low performance, high expectations

McKinsey reports find that leadership is still finding its footing when it comes to AI, but is moving forward. “Across all industries, surveyed C-level executives report limited returns on enterprise-wide AI investments. Only 19 percent say revenues have increased more than 5 percent, with another 39 percent seeing a moderate increase of 1 to 5 percent, and 36 percent reporting no change (Exhibit 15). And only 23 percent see AI delivering any favorable change in costs.”

Despite limited returns thus far, they remain bullish. McKinsey also reports that 87% of executives expect revenue growth from Gen AI within the next three years. So, this is only the beginning.

What jobs are the most AI-replaceable?

Given the initial hype around ChatGPT’s ability to write copy and create images, it’s probably no surprise that freelance writers have already taken a hit. Harvard Business Review reports that research shows a “...significant short-term job replacement after these tools were introduced, and that jobs prone to automation, like writing and coding, were the most affected by ChatGPT.” But the potential impacts are far-reaching.

The U.S. Bureau of Labor Statistics ranks financial advisors alongside software developers and database architects in terms of the potential impact of AI on their professions. Electrical engineers, database administrators, and even aerospace engineers all made the list as well.

Replacement - or empowerment

While personal financial advisors are already seeing competition from robo-advisors, the report continues to maintain that these occupations may expect to see support and increased productivity, rather than replacement: “AI can support many tasks involved in architecture and engineering occupations, potentially increasing worker productivity.”

Credit analysts, insurance claims adjusters, and insurance appraisers, on the other hand, can all expect to see very different results, as hiring for those jobs has already been negatively impacted.

Barriers to AI adoption at work

Still, Financial Times’ (FT) writer John Burn-Murdoch suggests that executive assistants and travel agents might also be more or less immune to the impacts of AI, for now, at least. Why? Because AI can’t do “messy” jobs. He writes:

“They struggle to keep track of multiple streams of information, respond to a dynamic environment, work with unclear or changing goals and multitask. These unstructured workflows are a far cry from coding tests and essay questions.” Burn-Murdoch doesn’t think this advantage will last forever. As LLMs improve, and “messiness” becomes less of an obstacle, even these positions will have to worry.

The hesitant manager

It’s not just the jobs themselves that are preventing more widespread adoption of AI as a replacement for employees. Reticence seems to come from the top down. McKinsey’s report finds, “The challenge of AI in the workplace is not a technology challenge. It is a business challenge that calls upon leaders to align teams, address AI headwinds, and rewire their companies for change.” Despite plans to invest, most people still don’t think their AI initiatives are mature.

Additionally, McKinsey’s report describes a lack of vision as part of the problem: “Pilots fail to scale for many reasons. Common culprits are poorly designed or executed strategies, but a lack of bold ambitions can be just as crippling.”

Misaligned investment

Healthcare, technology, media and telecom, advanced industries, and agriculture companies are leading the charge when it comes to investment. Less committed are financial services, energy and materials, consumer goods and retail, hardware engineering and construction, and travel, transport, and logistics. It's important to note that this doesn’t always match with what the potential experts see for realizing value in these industries.

The consumer industry, for instance, ranks second highest in terms of the potential value AI can bring to its business, but is slow to invest. McKinsey posits, “That hesitation may be explained by the industry’s low average net margins in mass-market categories and thus higher confidence thresholds for adopting costly organization-wide technology upgrades.”

Waiting for Armageddon - or Nirvanna?

For workers, it’s probably good news that some companies are hesitant to dive headfirst into the waters of Gen AI. Still, if the data shows us anything, it’s that companies are inching their way closer to full implementation.

As Gen AI improves and businesses finally begin to see the full economic impact, it 's clear that adoption will skyrocket. Whether this is the calm before a storm of layoffs or the precursor to supercharged human productivity, we still don’t know for sure.