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For business executives, adapting to emerging technologies is not a new challenge. Whether it’s cloud computing, smartphones and 5G, the Internet of Things or 3D printing, new innovations often force executives to reshape business strategies to account for the impact of introducing automation across the enterprise.
But experts say the arrival of the latest next-generation technologies presents unique and unprecedented challenges that will test even the most seasoned executives’ ability to respond in a way that maximizes the technology’s benefits and limits its risks.
Unlike other forms of automation, generative artificial intelligence (GenAI) won’t just impact blue-collar and entry-level jobs. It will redefine many high-skilled professional jobs across organizational disciplines.
The latest report from SHRM and the Combustion Glass Institute, titled Generating artificial intelligence and labor, Discovery accelerates adoption GenAI will trigger widespread changes in roles such as financial analysts, lawyers, software developers, marketers, and human resources professionals. While few of these jobs will be completely replaced by GenAI, the rapidly evolving technology will enhance and fundamentally reshape many jobs.
As GenAI becomes a mainstay in organizations’ technology platforms, senior executives will face tough decisions. For example, reports from SHRM and the Burning Glass Institute found that the surge in productivity and output created by GenAI is unlikely to meet corresponding increases in demand for goods and services over time. This will lead to overstaffing in many industries. Senior leaders need to develop mitigation strategies, such as hiring freezes, to minimize disruption.
The SHRM/Burning Glass report found that CEOs need to work more closely with CHROs, chief technology officers (CTOs), chief information security officers (CISOs) and legal counsel on GenAI-related issues. They will need to design talent management, governance, legal and cybersecurity strategies to take advantage of the massive productivity and efficiency benefits GenAI will create. At the same time, they need to overcome risks that remain significant.
Impact on business strategy
Technology analysts believe that organizations will increasingly adopt GenAI by 2024 as business leaders develop stricter governance plans, including OpenAI’s ChatGPT and DALL-E, Google’s Bard, and Microsoft Copilot. Additionally, the still-high cost of the technology will come down, and the results of the GenAI proof-of-concept program will encourage wider enterprise adoption.
Analysts also expect GenAI tools to become a standard feature of vendor technology platforms used in human resources, customer service, marketing, cybersecurity, supply chain management and other areas. Walmart is one of the latest organizations to increase investment in GenAI. The retailer recently announced that it will provide access to the company’s proprietary GenAI platform, My Assistant, to 25,000 employees in 10 additional countries this year.
Barriers to adoption of this technology remain, including the risks associated with using public large language models (LLMs) such as ChatGPT. These risks include violating copyright laws or making decisions based on inaccurate output. Still, CEOs will need to find ways to leverage GenAI or risk falling behind their competitors.
A 2023 global study from the IBM Institute for Business Value found that 75% of CEOs believe organizations with the most advanced forms of generative AI will have a competitive advantage. Half of the CEOs also said they have integrated GenAI into products and services, with 43% saying they are using GenAI to inform their strategic decisions.
The current generation of tools isn’t cheap. GenAI is by no means a free replacement for labor. “
Brian Ackerman
The technology is ubiquitous and will impact leadership decisions on multiple levels. “It affects every level, from establishing governance policies that ensure control but not blocking innovation, to employee value propositions, to how organizations train employees to use it effectively and responsibly,” said Bryan Ackermann, director of AI strategy and transformation at Scottsdale. Technology” Arizona for use by Korn Ferry Consultants. “Rarely do we see a technology evolve so quickly and become ubiquitous in its first year.”
But investments in this technology are not without warning signs. On the one hand, managers need to weigh the huge costs of developing, deploying and maintaining software. This includes costs associated with using application programming interfaces (APIs) to connect to GenAI tools like OpenAI or Google.
“The current generation of tools is not cheap,” Ackerman said. “GenAI is by no means a free replacement for labor. As enterprise vendors release more GenAI products, and a host of startups do the same, the tools remain quite expensive due to the cost of the underlying computing power.”
In this environment, small and medium-sized organizations are not without hope. Analysts say they can start getting in on the GenAI game by using new tools like artificial intelligence as a service (AIaaS) platforms, which allow organizations to license GenAI software without high upfront capital or labor costs.
GenAI’s impact on employment
The SHRM/Burning Glass Institute report found that the use of GenAI is more likely to augment rather than replace most existing jobs in the short term. However, jobs closely related to GenAI are still vulnerable to automation in the future. While workforce reductions due to the use of artificial intelligence are likely to be widespread over the next decade, many of these layoffs may not be because machines replace humans, but because economic growth lags behind big jumps in worker productivity.
“Despite the best efforts of savvy HR leaders, layoffs will become increasingly urgent as GenAI changes the macroeconomic landscape,” the SHRM/Burning Glass report states.
Gad Levanon, chief economist at the Burning Glass Institute in New York City, gave an example of how the growing popularity of GenAI in software engineering jobs will impact organizations in the future.
“For example, 10 software developers in a company may now be able to do the work of 15 software developers because of the efficiency gains made by GenAI,” Lvanon said. “But the organization that employs these developers may only see a 10% increase in demand for goods and services over a given period of time, rather than a 50% increase. So the organization may become overstaffed because it doesn’t need as many developers.”
IBM research found that 43% of CEOs surveyed said they had reduced or redeployed their workforce as a result of generative AI, and another 28% said they planned to do so in the coming year.
While the disruption caused by GenAI will in some cases come with a human cost, the SHRM/Burning Glass report found that these costs are likely to be short-lived.
“Corporate profits will increase as companies benefit from lower wage costs,” the report said. “In a competitive market, we expect prices to fall accordingly. Finally, price cuts and new jobs created by GenAI will drive demand. increase, employment will at least rebound.”
Despite the best efforts of savvy HR leaders, layoffs will become increasingly urgent as GenAI changes the macroeconomic landscape. “
Generating Artificial Intelligence and Workforce, SHRM and Burning Glass Institute
The report also found that, in the long term, research and development (R&D) will accelerate as GenAI enables researchers to process more data and make new discoveries faster.
Analysts in the HR practice at consulting firm Gartner said in their 2024 Workplace Predictions that artificial intelligence is likely to create rather than reduce workforce opportunities.
“Despite the anxiety and considerable discussion about how GenAI will impact employment, in the short to medium term, GenAI will completely displace a small number of jobs,” Gartner analysts wrote in the report. “GenAI will reduce the skills required for many positions. skill levels, thereby greatly increasing the positions candidates can be qualified for. Many jobs that are heavily impacted by GenAI will be redesigned and will have new responsibilities that include interacting with GenAI tools.”
Some experts believe GenAI will lead to more hiring, not less, because the technology can unleash more creativity and innovation in every employee. For example, IBM research found that 46% of CEOs have already hired more employees because of GenAI, and 26% of them said they plan to hire more employees in the future.
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