Traditionally, when a company hired a fresh school leaver or graduate, they were paid to draft emails, summarize long reports, gather data for various tasks, or write basic code. In other words, they were paid to do the ‘grunt work’.
This approach benefitted both parties: the employer had people to get tedious work done, while the new employee learned how the business or organization operated. It was a win-win situation.
Today, however, artificial intelligence (AI) can do a lot of that grunt work, and faster and better than any human. Moreover, AI does not charge a salary, take vacations, occupy office space, etc. As a growing number of companies embrace AI, the demand for entry-level employees has fallen. Consequently, entry-level workers today earn lower salaries while senior managers, those who know how to use and direct the AI, get the big paychecks.
According to the IESE Business School at the University of Navarra in Spain, starting salaries for junior positions have fallen by 6.3%, and those in mid-level positions are being paid 5.9% less. Upper-management employees, on the other hand, have either maintained or increased their salaries.
Employment changes and corporate priorities
As AI spreads throughout the corporate world, both the salaries for junior white-collar positions and the number of entry-level job vacancies are declining. The number of software developers in the United States has dropped by nearly 20%, according to Stanford’s Digital Economy Lab, as reported by Quasa.io. The number of entry-level job vacancies has plummeted by 73% in one year.
Installing AI infrastructure is expensive. Most companies reduce the number of junior roles to help pay for this. A recent survey found that 43% of CEOs plan to reduce the number of junior jobs in their organization, according to Inc. Magazine.
Human Resources managers and employment agencies today say that they are shifting their focus almost entirely toward mid-level professionals. In this context, the term ‘mid-level professionals’ refers to experienced employees who do not yet work in upper management—they are not senior managers or executives yet.
The long-term problem for business
The advent of AI is giving more advantages to experienced employees than to people who only have academic knowledge but very little or no working experience.
In the past, junior employees would learn about corporate operations, that is, what happens and how things are done in the business world, by doing the grunt work. As this is not occurring any more, directors and CEOs worry that junior candidates who do get hired will not acquire the corporate skills that their predecessors developed.
Senior executives and HR managers need to rethink how young professionals acquire the corporate skills of their predecessors and develop in their careers.
Public concern
A recent study by King’s College London found that 70% of British people are concerned about the economic impacts of AI. Sixty percent believe it will destroy more jobs than it creates, and 50% think it will have a worse impact than an economic recession. Some people (20%) think that AI will eventually lead to civil unrest.
The study also found that most people are not convinced by the World Economic Forum’s prediction that AI will create twice as many jobs as it destroys. Two-thirds of Britons say that AI companies need to be closely regulated, even if it comes at the cost of slower economic growth.
