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05/21/2024

Could AI Trigger a White Collar Recession?

Source: Employee Benefit News, May 16, 2024

Artificial intelligence has started to facilitate many of the tasks in corporate workplaces. But is it doing its job too well?

Unemployment rates remain low, according to the Bureau of Labor Statistics, but so are hiring efforts for white collar jobs. Recent data from job search platform Indeed revealed that listings for technology roles are down 55% from a year ago, while banking industry vacancies are down more than 40% and insurance listings have fallen 18%.

"The highly-educated professions had a belief that they would not suffer from contraction due to new technology in the way that blue collar workers do," says Julia Hobsbawm, a former professor in workplace social health. "But the lines between work involving technology and knowledge work that technology can now do are blurring, making all jobs vulnerable, including white collar ones." 

As tech has evolved, it has taken over critical manual tasks of white collar jobs such as data analysis, reporting, onboarding and even writing emails and scheduling, effectively changing the nature of the position themselves. As a result, AI is expected to replace 2.4 million U.S. jobs by 2030, with an additional 12 million occupational shifts and an expected 400 to 800 million jobs lost entirely, according to a recent McKinsey report. While this is bound to cause lingering unrest and distrust towards AI among employees, the increase in tech isn't entirely bad. 

Improved tech tools can and will play an equally large role in making jobs more accessible in the future, according to Hobsbawm. For example, college degrees may stop being a requirement for white collar positions if AI can streamline the learning process for applicants regardless of background. 

"All new technology, when it arrives at scale, sheds jobs before it creates new ones," Hobsbawm says. "Fundamentally, that will be a good outcome that is going to improve the way the job market moves." 

To keep up with the changes, employees looking for successful careers in white collar industries will have to alter the way they approach the recruiting process in the aftermath of a digital revolution. 

"How do you future-proof yourself when the future is coming at you so fast?" Hobsbawm says. "The truth is everyone needs a reality check. They have to learn how to build networks across different disciplines and learn how to keep an eye out for change and adapt accordingly. And if you don't know how to do that, you are vulnerable." 

Employers aren't exempt from preservation efforts, either. Because while there is so much of an organization's workflow that AI can replace, human counterparts are still crucial to reaping the benefits of digital tools.  

"Take care of your people as people first," Hobsbawm says. "You get the best out of people when they feel settled. The biggest thing any boss or leader can do is remember that the people matter more than the machines."

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