Connect with us

Mergers & Acquisitions

Whose job is safe from AI?

Published

on


Stay informed with free updates

As artificial intelligence becomes ever more capable, is any job secure? “I’ve sort of convinced myself that the safest job in the world is probably gardener,” the FT’s chief economics commentator Martin Wolf recently confessed. That seemed right. There are some things the computers just can’t do.

The next morning the FT published “The gardens that AI grew”, describing intelligently automated drip irrigation, pest detectors, laser scarecrow systems and a solar-powered weeding robot. Oof.

It’s not entirely clear how much the laser scarecrow and the robot weeder really will threaten the jobs of human gardeners, but the prospect reminds us that there is a distinction between a job and a task. Most jobs are bundles of interconnected tasks.

A gardener needs to do everything from mowing and weeding to diagnosing a pest infestation, designing an outdoor space, or — hardest of all — communicating with a difficult client. Different AI systems could well help with most of these tasks, although the likely outcome is not that the job of gardener disappears, but that it changes shape.

The question is, how will each new AI application change the shape of what we do? And will we like the reworked jobs available to us on the other side of this transformation?

Generative AI may be new but these questions are not. They run all the way back to the Luddite protests of the early 1800s, when highly skilled textile workers saw machines doing the hardest parts of their job, allowing them to be replaced by low-paid labourers with far less expertise.

And the answers to those long-standing questions? They depend both on the technology and on the job. There’s a lesson to be drawn from two contrasting precedents: the digital spreadsheet, and warehouse guidance earpieces such as the “Jennifer unit”. The digital spreadsheet, which hit the market in 1979, instantly and flawlessly performed work previously done by accounting clerks, but the accounting profession simply moved on to more strategic and creative problems, modelling different scenarios and risks. Who doesn’t want a creative accountant?

The Jennifer unit is a headset to guide warehouse pickers as they scurry around grabbing merchandise off shelves, whispering in their ears as it tracks their last move and guides their next one. The unit removes the last vestige of cognitive load from a physically demanding job that was already mind-numbing. It is a stark contrast to the digital spreadsheet, which excised the most tedious part of a varied and highly skilled job. The lesson: AI can make a boring job even more boring and an interesting job even more interesting.

New data and a new perspective on these questions come from MIT researchers David Autor and Neil Thompson. Autor and Thompson begin a new research paper titled “Expertise” by posing a question: would we expect accounting clerks and inventory clerks to be similarly affected by automation?

There are several well-established approaches to analysing this question, and all of them suggest that the answer is “yes”. Back in the day, both types of clerk spent a lot of time performing routine intellectual tasks such as spotting discrepancies, compiling inventories or tables of data, and doing simple arithmetic on a large scale. All of these tasks were the kind of things that computers could do, and as computers became cheap enough they took over. Given the same tasks faced the same sort of automation, it seems logical that both jobs would change in similar ways.

But that is not what happened. In particular, say Autor and Thompson, wages for accounting clerks rose, while wages for inventory clerks fell.

This is because most jobs are not random collections of unrelated tasks. They are bundles of tasks that are most efficiently done by the same person for a variety of unmysterious reasons. Remove some tasks from the bundle and the rest of the job changes.

Inventory clerks lost the bit of the job requiring most education and training (the arithmetic) and became more like shelf-stackers. Accounting clerks also lost the arithmetic, but what remained required judgment, analysis and sophisticated problem solving.

Although the same kind of tasks had been automated away, the effect was to make inventory clerking a job requiring less training and less expertise, while accounting clerks needed to be more expert than before.

The natural worry for anyone hoping to have a job in five years’ time is what AI might do to that job. And while there are few certainties, Autor and Thompson’s framework does suggest a clarifying question: does AI look like it is going to do the most highly skilled part of your job or the low-skill rump that you’ve not been able to get rid of? The answer to that question may help to predict whether your job is about to get more fun or more annoying — and whether your salary is likely to rise, or fall as your expert work is devalued like the expert work of the Luddites.

For example, generative AI systems are great brainstormers. They make unexpected connections and produce lots of varied ideas. When I’m running a role-playing game, that’s great. They accelerate the preparation and let me get straight to the good stuff, which is sitting around the table with my friends pretending to be wizards.

For someone whose job offers occasional oases of creative brainstorming in a desert of menial administration, the emergence of industrial brainstorming engines might be rather less liberating.

Or consider that gardener. Perhaps the worst part of their job is trying to compose emails to desk-based clients who seem far more fluent in the medium than someone who spends most of their time outside. Laser scarecrows and robot weeders be damned. What the gardener needs is an AI secretary, scribe and editor. And the technology for that is already here.

Find out about our latest stories first — follow FT Weekend Magazine on X and FT Weekend on Instagram





Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Mergers & Acquisitions

US stocks: rally or overcorrection?

Published

on



The S&P 500 is up more than 20 per cent since mid-April



Source link

Continue Reading

Mergers & Acquisitions

On-the-job learning upended by AI and hybrid work

Published

on


Jamie Dimon is unequivocal about the impact of remote working on training new bankers. “It doesn’t work in our business,” the chief executive of JPMorgan Chase told Stanford’s Graduate School of Business this year. “Younger people [are] left behind.”

He has previously spoken of the importance of “the apprenticeship model . . . which is almost impossible to replicate in the Zoom world”.

In many workplaces, that apprenticeship model is as simple as sitting near a more experienced colleague or joining a client meeting to watch how it is done, while also learning the ropes by taking on often more repetitive and basic tasks.

But on-the-job learning is now facing the double threat of hybrid working, which means junior staff spend less time observing and listening to more senior colleagues, and generative AI, which is making obsolete many of the routine tasks that have long been building blocks of professional knowledge.

The effect has been noted across professional industries, from auditors and law firms to the big investment banks. Last year, the Public Company Accounting Oversight Board reported that the pandemic and remote and hybrid work had affected audit firms’ “apprenticeship model for on-the-job training, dissemination of culture, and professional scepticism”.

Others see the format as ripe for reform, anticipating that greater changes will come from generative AI.

Employers are investing heavily in AI to assist with working practices. Tools such as those rolled out by law firm A&O Shearman to deal with antitrust and contracts or Goldman Sachs to summarise complex documents and analyse data, are designed to enhance productivity. AI start-up Rogo aims to automate some of the laborious tasks done by junior investment bankers. However, some argue that by eliminating repetitive tasks, junior recruits will fail to develop muscle memory, which is essential for critical analysis, as well as the ability to identify mistakes in AI.

The changes may mean employers have to be more structured and deliberate in the training opportunities they offer junior staff, while working out how to get the best out of generative AI to free up time for their employees to do more valuable work.

Yolanda Seals-Coffield, chief people and inclusion officer at PwC’s US division, says hybrid working means that there needs to be a much more proactive approach to on-the-job training

Navid Mahmoodzadegan, the newly appointed chief executive of boutique investment bank Moelis & Co, says he hopes junior bankers will be rewarded with more “intellectually stimulating” work. Patrick Curtis, chief executive and founder of Wall Street Oasis, an online community catering to the financial services industry, predicts “this shifting more dramatically in the next 24 months as these [junior] roles start leveraging AI more, with some getting displaced outright”.

To maintain the apprenticeship model, leaders at some companies have followed Dimon in mandating five days of office attendance a week. Others, including Citigroup, are continuing with various hybrid working arrangements. Clare Francis, a partner at Pinsent Masons, a law firm that does not mandate days, says that while “junior lawyers benefit from office attendance,” some work, such as research, can be more effectively done at home. She adds that “everyone learns in different ways” and the reality is that many meetings are held on Teams so juniors “can see how they work” just as easily outside the office.

Yolanda Seals-Coffield, chief people and inclusion officer at PwC’s US division, believes hybrid working means “we have lost a little bit of that” tacit knowledge. She sees the solution in junior and senior staff being “far more intentional” about mentoring and debriefing. “We have to be [in] a world post-Covid where people are hybrid, you’re no longer sitting next to someone in an office or on a client side or at a meeting.” Staff, including trainees, at PwC US are required to be on-site half of the time. The arrangement means new recruits need to be clear about saying, “I want to actually shadow this particular behaviour”, she says. This might mean a junior associate sits in on a virtual client meeting or reviews a recorded walk-through of a technical process, followed by structured debriefs to reinforce the learning.

Rather than “a passive experience”, says Seals-Coffield, it requires bosses to think about modelling behaviour such as through guided questioning and peer feedback. AI could start to help with this by, for example, flagging to a team leader that a scheduled interview might provide a shadowing opportunity for a graduate employee who has indicated they are looking for this skill.

I’m optimistic that the tools will enable juniors to think about the material critically

New graduates might also be more fluent in AI than their supervisors, potentially opening up new responsibilities for them to take on. Patrick Grant, project director of legal tech and innovation at the University of Law, says they have developed courses to encourage students to use tools such as ChatGPT critically and ethically in assisting with research, organisation and editing, and to spot “errors or hallucinated references”. They encourage students, for example, to compare drafts of clauses with AI outputs to understand the tools’ lack of nuance.

Francis points out that junior lawyers using generative AI for research is not that different from past generations switching from books to the internet. “Today, the workflow of junior lawyers is not yet fundamentally different [from] how it was before AI was a tool at the disposal of legal teams. Lawyers at the outset of their training continue to learn by verifying results.” The role will “adapt and evolve” alongside AI.

Some argue that by eliminating repetitive tasks, juniors can progress more quickly by taking on more sophisticated and creative work earlier. Francisco Morales Barrón, a partner at Vinson & Elkins law firm in New York, is sceptical about the traditional model. “A lot of older generations will say you learn so much from reviewing thousands of contracts . . . somehow magically you learn through the process of repeating it hundreds of times. I’m optimistic that the tools will enable juniors to think about the material critically.” Francis agrees: “How much do you learn from a monotonous task?”

Seals-Coffield says employers need to get to grips with the desired outcomes of graduate training by separating the task from the skill: “If they’re not [going to] have the opportunity to do that task 50 times, they still need to be able to evaluate it, they still need to be able to provide the critical judgment and independent thinking that is important to evaluate the work that AI might be producing.”

This could include simulations in training, says Francis, “to develop, test and challenge the lawyer both on legal expertise as well as on soft skills such as communication and negotiation”.

Others suggest that any freed-up time will not be spent on more creative tasks, but on additional grunt work — or cutting the number of junior jobs.

According to Oxford Economics, a consultancy, “there are signs that entry-level positions are being displaced by artificial intelligence at higher rates”.

But in some organisations this could be a while off. “Analysts in my class are in a relatively favourable position in which we will have the aid of AI without it replacing us just yet,” reports one investment banking analyst.

Additional reporting by Anjli Raval and Sujeet Indap



Source link

Continue Reading

Mergers & Acquisitions

It’s a bad time to be a graduate

Published

on


Unlock the Editor’s Digest for free

As they trade the campus for the job market, fresh-faced graduates are quickly turning glum. From North America to Europe, university leavers are struggling to find suitable work. The unemployment rate for recent college graduates in the US has for the first time been consistently above the national level since the Covid-19 pandemic. In the EU, the employment rate of 15- to 25-year-olds has fallen over the past two years. Even the crème de la crème are struggling. The percentage of MBA students from Harvard Business School and MIT Sloan without a job offer three months after graduation has risen sharply since 2021.

The rise of artificial intelligence is a factor. In the US, entry-level tech jobs are coming under pressure as coding tasks are automated. The unemployment rate for computer engineering graduates is 7.5 per cent; the national rate is 4.1 per cent. In Britain, the Big Four accountancy firms have cut back on early-career hires in recent years. Economists and recruiters reckon higher costs are encouraging UK professional services firms to experiment with AI in more administrative tasks usually conducted by juniors.

But the plight of graduates predates the emergence of large language models in the workplace. Other structural developments are at play. As more young people around the world are choosing to go to university, competition for jobs has picked up. In Canada, a popular destination for young graduates, the unemployment rate for those under 25 with post-secondary education was 11.2 per cent in the first quarter. Last year in the UK there were an average of 140 applications per graduate job — the highest in three decades, according to the Institute of Student Employers.

As the supply of learned graduates has risen, demand has come under pressure. Research by Indeed, a job search site, finds that the share of US job postings requiring at least a bachelor’s degree has fallen over the past five years. As for the public sector, civil services are being squeezed across cash-strapped advanced economies. Multinationals with big graduate programmes have also been developing global capability centres in low-cost hubs such as India, where they are outsourcing more skilled roles such as data analytics, rather than just back-office functions.

The recent economic cycle has not been kind to recent graduates either. Many professional services and tech firms overhired in the post-pandemic years, assuming activity would bounce back faster than it did. Recruitment rounds have been subdued since. Demand for investment banking analysts and newly qualified lawyers has also been stunted by subdued global mergers and acquisitions activity. Global economic uncertainty makes it difficult for businesses to plan investments and hiring cycles.

Even if the economic environment improves, graduates will still be contending with the rise of AI in the workplace and competition for entry-level jobs. Ensuring students have a better understanding of post-graduation prospects would help them make wiser course choices. Universities and the private sector will need to collaborate more closely if courses are to evolve with the changing demands of work. Even so, businesses and governments will need to raise support for adult training and life-long learning; three-year degrees can quickly become obsolete. The travails of university graduates should also encourage more investment in non-degree vocational training and apprenticeship opportunities, as businesses have long been calling for.

A surfeit of underemployed elites is bad for society and the economy. To ensure it does not become a feature, education must evolve from being a ticket to a job to a toolkit of skills for a changing world.



Source link

Continue Reading

Trending