'Sliding doors moment' | 8 million UK jobs at risk of AI replacement unless action taken, think tank warns

8 million UK jobs at risk of AI replacement unless action taken, think tank warns

Up to 8 million jobs in the UK are at risk of being replaced with AI unless action is taken, a think tank has warned.

First of its kind analysis from the Institute for Public Policy Research (IPPR) of the impact of generative AI on the UK labour market uncovers a distinct moment for the UK, with possibilities for huge job disruption in future or significant GDP gains, depending on government policy. 

The report identifies two key stages of generative AI adoption: the first wave, which is here and now, and a second wave in which companies will integrate existing AI technologies further and more deeply into their processes. 

IPPR analysis of 22,000 tasks in the UK economy, covering every type of job, found that 11% of tasks done by workers are already exposed to in the first wave. 

It identifies ‘routine cognitive’ tasks, such as database management, and ‘organisational and strategic’ tasks such as scheduling or inventory management, as most exposed to generative AI, which can both read and create text, software code and data.

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However, this could increase to AI doing 59% of tasks in the second wave. This would also impact non-routine cognitive tasks, such as creating and maintaining databases, and would affect increasingly higher earning jobs. 

The study says that back-office, entry level and part time jobs are at the highest risk of being disrupted during the first wave, including secretarial, customer service and administrative roles. 

Women are more likely to be in such jobs, which means they will be among the most affected, the report says. 

Young people are also at high risk as firms hire fewer people for entry-level jobs and introduce AI technologies instead. In addition, those on medium and low wages are most exposed to being replaced by AI. 

The IPPR modelled three scenarios for the potential impact of AI adoption on the labour market, depending on policy choices: 

  • Worst case scenario – full displacement: all jobs at risk are replaced by AI, with 7.9 million job losses and no GDP gains 

  • Central scenario: 4.4 million jobs disappear, but with economic gains of 6.3% of GDP (£144bn per year) 

  • Best case scenario – full augmentation: all jobs at risk are augmented to adapt to AI, instead of replaced, leading to no job losses and an economic boost of 13% to GDP (£306bn per year)

Additionally, wage gains for workers could be huge – more than 30% in some cases – but they could also be nil. 

Deployment of AI could also free up labour to fill gaps related to unaddressed social needs. For instance, workers could be re-allocated to social care and mental health services which are currently under-resourced.

The modelling shows that there is no single predetermined path for how AI implementation will play out in the labour market. It also urges intervention to ensure that the economic gains are widely spread, rather than accruing to only a few. 

Without government action and with companies left to their own devices, the worst-case scenario is a real possibility, IPPR says. 

The IPPR has recommended the government develop a job-centric industrial strategy for AI that encourages job transitions and ensures that the fruits of automation are shared widely across the economy, such as:

  1. Supporting green jobs, as green jobs are less exposed to automation than non-green jobs 

  2. Fiscal policy measures, such as tax incentives or subsidies to encourage job-augmentation over full displacement 

  3. Regulatory change, to ensure human responsibility of key issues, such as with health 

Carsten Jung, senior economist at IPPR, said: "Already existing generative AI could lead to big labour market disruption or it could hugely boost economic growth, either way it is set to be a game changer for millions of us. 

“Many firms are already investing in it, and it has potential to speed up many more tasks as more businesses adopt it. 

“Over the next five years it could transform knowledge work. The question now is less whether AI can be useful, but rather how fast and in what manner employers will use it. 

“History shows that technological transition can be a boon if well managed, or can end in disruption if left to unfold without controls. Indeed, some occupations could be hard hit by generative AI, starting with back office jobs. 

“But technology isn’t destiny and a jobs apocalypse is not inevitable – government, employers and unions have the opportunity to make crucial design decisions now that ensure we manage this new technology well. If they don’t act soon, it may be too late.” 

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Bhargav Srinivasa Desikan, senior research fellow at IPPR, also commented: “We could see jobs such as copywriters, graphic designers and personal assistants roles being heavily affected by AI. 

“The question is how we can steer technological change in a way that allows for novel job opportunities, increased productivity, and economic benefits for all.”

Desikan added: “We are at a sliding doors moment, and policy makers urgently need to develop a strategy to make sure our labour market adapts to the 21st century, without leaving millions behind.

“It is crucial that all workers benefit from these technological advancements, and not just the big tech corporations.”

‘Act now to ensure AI augments work without replacing staff’

The forecast for AI’s impact on the UK workplace will leave both employers and employees alike concerned. 

Matt Monette, UK&I country lead at Deel, says that while it’s inevitable that advancements in technology - specifically AI - will have an impact on the way we work, it “doesn’t have to be all doom and gloom.”

Monette explained: “According to data from Deel, the number of AI, Software Engineering and Data Science roles paid through Deel organisations grew 60% in the last year, globally. But more importantly – is that businesses are willing to pay big salaries for this talent. 

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“Our data shows that salaries for top AI and engineering roles are increasing in EMEA. From an average of £99K in Q3 2022 to £101K in Q3 2023. 

“Right now, we’re at a crossroads waiting to see which path AI takes us down. But we can act now to ensure AI tech supplements and augments our current work. 

“For employees, this means taking the time to work with your employer to ensure you’re upskilling in the right places. And for companies looking to close skills gaps, it’ll be important to broaden hiring pools and consider hiring from abroad - including from those talent pools we’re currently seeing impacted by layoffs.” 

‘Some human skills are irreplaceable’

Anton Roe, CEO at HR, payroll, and finance software provider MHR, was also quick to avoid doom mongering by outlining key reasons why real employees are still vital to the future of the workplace. 

“Despite incredible advancements in generative AI over the last couple of years, some human skills and qualities are simply irreplaceable”, Roe said. 

“AI should be viewed as a digital partner for employees, not a replacement, empowering individuals to fulfil their role more effectively and more efficiently.

“For instance, AI can be embedded to help automate routine, administrative aspects of an employee’s role in order to unlock resources for more complex, people-facing issues – such as conflict resolution, engagement, and talent development – that require a human touch. 

“AI will also create a huge number of new jobs, with humans needed to develop, maintain and use the software.”

Roe concluded: “Humans have always looked to find the most productive and efficient ways to work. AI and large language models are just the next step on this journey, and will enable us to increasingly use qualities such as creativity, persuasion and compassion to make the world of work – and the world as a whole – a better and brighter place.”

'Double down on what we can control'

Tom Cornell, Senior IO Psychology Consultant at HireVue, a leading AI recruitment company and the global leader in Human Potential Intelligence, offers a critical perspective on the transformative power of AI. He stresses the urgent need to invest in reskilling programmes to help navigate the challenges and opportunities AI presents for the workforce.

"The revolutionary potentials and perils of generative AI demand significant research such as the newly released findings from the Institute for Public Policy Research (IPPR). Findings like these will help us blunt potential negative consequences, but we would all do well not to get sidetracked by the worst-case or best-case scenarios, and instead double down on the meaty middle of what we can control.

We know without a doubt that we’re going to need substantial government programs and private sector investments to upskill and reskill workers for the green and AI revolutions. The good news is that workforce transformation is a part of our history and we’ve seen time and again how dramatically lives can be improved because of innovation. This latest revolution has the power to open previously unthought-of opportunities for people to learn and acquire new skills – the only thing stopping us will be a poverty of the imagination about how we can build institutions that simultaneously protect workers while also optimising business.”

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