Companies investing in AI rather than employee upskilling

A new study has found that almost three in ten companies are more likely to invest in AI than upskill their employees. This raises questions about claims that the new technology will simply change jobs rather than eliminate them.

The new numbers, provided in a study by Clarify Capital, indicate that AI might already be killing entry-level jobs in various industries.

The survey of over 1,000 employed Americans, both employees and executive leaders, has revealed that 86% of executives plan to replace entry-level positions with the help of AI. Nearly one in six have already done so.

With AI entering the mass market, the tools are undoubtedly cheaper than hiring and training a human employee – no wonder most executives (51%) said they felt optimistic about the use of AI at work.

Nearly 10% have stopped hiring for entry-level roles due to AI’s advancements, and 14% openly said that their companies invest in AI to cut jobs internally.

On the other hand, over a third of employees (34%) feel threatened by the emerging reality. Some should worry more than others – the leading entry-level positions being replaced by AI are data entry clerks (59%), fact-checkers (46%), and copywriters (43%).

Customer service representatives, human resources assistants, graphic designers, and software developers and coders are also at risk, the study said.

Information technology (90%), retail (88%), and finance (86%) are the top industries integrating AI, with healthcare (84%) and marketing (75%) not far behind.

The surveyed executives said their companies were investing in AI to increase productivity, lower costs, gain a competitive edge, and innovate or develop better products. Only 15% said they implemented AI due to talent shortages.

Most employed Americans (73%) were planning on upskilling to stay competitive in this new AI-driven job market, Clarify Capital said.

In some industries, upskilling is vital. According to Gartner, a tech consulting firm, 80% of the software engineering workforce will need to upskill within the next three years to meet the growing demand for new roles created by the rise of generative AI.

Nevertheless, there might already be fewer job openings out there than we think. At the beginning of 2024, Clarify Capital also said that “ghost jobs” – fake job listings that lead nowhere – were on the rise, giving the impression that companies were still growing when, in fact, they weren’t anymore.