Britian’s AI Experiment: Down in Jobs So Far

It is a clear goal for the UK, to become a global AI hub. And with private firms investing 78 billion pounds alone in the sector year, it has indeed become a world leader in the once-in-a-generation technology. But workforce changes may not be the country had in mind.

According to a new study, productivity has risen 11% percent from the use of AI at firms, but the technology has resulted in an 8 percent loss of job in the past 12 months. That’s more than the AI job loss in Japan (7 percent), Germany (4 percent) and Australia (4 percent) that the report followed. The study also found that AI has caused a net gain of jobs in the US (2 percent), while boosting productivity 11 percent as well.

To be sure, the AI impact on job may be overstated some, says Drew Hill, a Korn Ferry senior client partner in London. UK weakness is concentrated in roles that are exposed to computer automation.  “That’s where AI substitutes show up first,” he says. Plus, the lack of hiring in the UK is due to many reasons. 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, experts say, wasn’t intended to create a more difficult job market, especially for younger forces. Indeed, many thought that tech-savvy younger works would benefit from Ai injections, yet even recent highly educated graduates in Britain are finding it hard to get on the corporate ladder. “Companies have to make a fundamental decision: It’s short-term cost saving of hiring versus a long-term need for educated talent,” says Fiona Vickers, Korn Ferry’s senior client partner and managing director, digital.

Already, there is a high level of youth unemployment (15 to 24 years), currently at 13.7%, the highest rate since late 2020. That compares with an overall jobless rate of 5.1% in November. That means it’s tough for young people to take the first step on the corporate ladder. And that includes recent graduates from top universities. “We need to engage young people, or else they will feel disenfranchised,” Hill says. That could mean those young people do not find suitable work, turn to cynicism, and perceive victimization. That isn’t ideal for the British economy because it doesn’t benefit from many talented people.

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

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

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