Britain’s AI Experiment: Down in Jobs So Far

Becoming a global AI hub is a clear goal for the UK. And with private firms investing £78 billion in the sector last year, the country has indeed become a world leader in the once-in-a-generation technology. But the ensuing workforce changes may not be what anyone had in mind.

According to a new study, AI use has lifted productivity at firms by 11%, but has also resulted in an 8% rate of job loss over the past 12 months. That’s more than the AI-driven job loss in Japan (7%), Germany (4%), and Australia (4%), according to the report. The study also found that AI has caused a 2% net gain of jobs in the US, while boosting productivity 11%.

To be sure, the AI impact on jobs may be overstated somewhat, says Drew Hill, a Korn Ferry senior client partner in London. In the UK, jobs weakness has been concentrated in roles that are exposed to computer automation. “That’s where AI substitutes show up first,” Hill says. Plus, the decline in hiring in the UK has many causes. Economic growth in Britain is slowing, down to 1.3% in September from 1.9% a year before, according to government data; increased corporate-labor taxes and some political instability have made executives reluctant to spend on hiring. 

Still, the heavy investment wasn’t intended to make finding roles more difficult, experts say, especially for younger employees. Indeed, many thought that AI would create opportunities for these tech-savvy workers. Instead, even highly educated recent graduates are struggling to find their initial footing on the corporate ladder. “Companies have to make a fundamental decision: It’s a short-term cost savings in hiring versus a long-term need for educated talent,” says Fiona Vickers, Korn Ferry’s senior client partner and managing director, digital. 

The level of youth unemployment (i.e., workers age 15 to 24) is at 13.7%, already the highest rate since late 2020. For November, the overall jobless rate was 5.1%. That means it’s tough for young people to start their careers. “We need to engage young people, or else they will feel disenfranchised,” Hill says. If those young people do not find suitable work, they could conceivably turn cynical and perceive themselves as victims, denying the British economy a critical mass of talented people.

Some experts are hoping the job loss may only be a short-term phenomenon, says Ben Frost, Korn Ferry’s senior client partner, EMEA. From the industrial revolution that began in the 1700s to the computer revolution of the 1970s and the dot-com surge in the 1990s, innovations have always created new jobs. And typically, these are jobs that the vast majority of people never imagined, such as making apps for smartphones. “The challenge is that it’s hard to see what it is going to manifest in the future,” he says.

Indeed, many experts believe that the corporate teams of the future will include both humans and AI agents working side by side. "The infrastructure for human-AI teams is being built right now,” says Bryan Ackermann, Korn Ferry's Head of AI Strategy and Transformation.

Learn more about Korn Ferry’s AI in the Workplace capabilities.

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