AI is already showing signs of slashing job openings in the UK
Job vacancies have declined across the board in the UK as employers cut costs in the face of sluggish growth and high borrowing rates, with the overall number of online job postings down 31 per cent in the three months to May compared with the same period in 2022, a McKinsey analysis found.
But it has been the most acute for occupations expected to be significantly altered by AI: Postings for such jobs, such as white-collar ones in tech or finance, dropped 38 per cent, almost twice the decline seen elsewhere, according to the consulting firm.
'The anticipation of significant, albeit uncertain, future productivity gains, especially as the technology and its applications mature, is prompting companies to review their workforce strategies and pause aspects of their recruitment,' said Tera Allas, a senior adviser at McKinsey.
The trend appears to be exerting another drag on the UK job market, just as tax increases prompt cuts in lower-skilled sectors such as retail and hospitality and the pace of economic growth stalls.
Occupations considered to be highly exposed to AI, meaning the technology can replace at least some of the tasks involved, have recorded the sharpest contractions in vacancies, McKinsey's analysis showed. Demand for jobs such as programmers, management consultants or graphic designers fell by more than 50 per cent over the last three years.
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Some of that may also be due to industry-specific issues and a challenging macroeconomic backdrop. But McKinsey said in some sectors, such as professional services and information technology, the number of job openings dropped even as businesses reported healthy growth rates.
Data shared by job-search website Indeed also indicated early signs that AI is affecting hiring decisions. It showed that employers tend to cut hiring in fields that involve building or using AI tools, according to Pawel Adrjan, director of EMEA economic research at the Indeed Hiring Lab.
For example, vacancies in mathematics, which mainly consist of data science and analytics roles, had the highest share of AI mentions in job descriptions but are down almost 50 per cent from pre-pandemic levels, according to Indeed figures showed. At the other end of the spectrum, real estate or education jobs that barely mention the technology grew over the period.
Some entry-level jobs involving tasks such as summarising meetings or sifting through documents are particularly exposed to AI, accelerating a decline in such roles as companies streamline headcount costs. Entry-level postings, which include apprenticeships, internships or junior jobs with no degree requirements, have fallen by almost a third since ChatGPT came to market at the end of 2022, according to data from job-search website Adzuna.
'The rapid rise of artificial intelligence is adding pressure on young job seekers, who are still in the grip of the Covid-19 aftermath, marked by inflation, economic headwinds, and low business confidence,' said James Neave, head of data science at Adzuna. BLOOMBERG
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