AI's role in transforming productivity & redefining knowledge work

The application of Artificial Intelligence (AI) in global industries, especially among knowledge workers, could transform productivity and redefine jobs, according to insights from Angus Bauer, Head of Sustainable Research, Schroders. Discussing the future of AI in human resources, Bauer underlines the transformative potential of AI integration while also highlighting concerns over job displacement due to automation.

Bauer points out, "There are over one billion knowledge workers in the global economy today." Such work contributes approximately 50% of GDP in leading economies. However, the advent of AI in these sectors has fuelled debates over the job market and changes in work patterns.

Reflecting on historical examples of automation, Bauer emphasises AI's potential to redefine jobs rather than eliminate them entirely. "Every time we go through a wave of automation, whole classes of tasks go away but new classes of task – and new jobs – are created," he explains. Despite the "friction, pain and disruption" in the transition process, Bauer argues that historically, overall job numbers remain consistent with societal benefits.

However, the introduction of AI in knowledge work is complex. The automation of diverse, multitudinous tasks found in a typical knowledge worker's day promises to be challenging, particularly given multiple technology systems within companies.

A shift towards the positive role of AI in enhancing productivity and addressing skills gaps is anticipated. Citing academic research on ChatGPT use in desk work, Bauer highlights scoped potential for 40% time-saving and improved output quality in some contexts. Extrapolating these figures, knowledge workers could deliver a standard week's work in just three days - significantly boosting productivity and modifying work-life balance.

The world may face a shortfall of as many as 85 million jobs, leading to approximated GDP losses of US $8.5 trillion. Bauer suggests AI could help companies and countries manage such demographic or skill-related shortages.

In terms of maximising human resources, AI could enhance talent development, workforce planning and company culture. As industries become increasingly automated, human capital management will play a key role in determining returns. The integration of AI might well create digital assets and, coupled with effective human capital management, yield more valuable outputs.

American survey results indicate a majority of office workers - 82% - would improve their skills to maintain their relevance in an AI-saturated job market. As represented in PwC's 2023 Global Workforce Hopes and Fears Survey, over half the workers view AI-powered new skills and opportunities positively, reducing negative inclinations to a third.

Bauer concludes that AI could greatly enhance strategic workforce planning, thus increasing capability, competitiveness and delivery. For HR departments, AI could provide superior data about the workforce, helping identify the workforce mood, high-potential assessments and performance appraisal analyse.