"Generative AI is reshaping the
conversation around hiring at many companies as they realize that one way the
pricey technology will pay off is if it helps them employ fewer people to do
more work.
While early wins from using
generative AI don't necessarily portend future layoffs, they hint at the need
for companies to hire less, chief information officers say. This observation
comes as business technology leaders seek returns for their increased spending
on AI.
"We're looking at a lot of
interesting tools and they have a lot of promise -- but then when you look at
the cost of the tool you say, 'Am I really going to realize that productivity
internally or am I just going to increase my technology cost?'" said
KeyBank CIO Amy Brady.
Brady said she sees AI playing a
role in workforce size to the extent that if it does make workers more
efficient, companies will ultimately save money by doing more with smaller
workforces.
KeyBank deployed a conversational AI
tool that is helping reduce the volume of calls coming to the customer service
contact center, said Brady. "We probably hired less because we have less
call volume," she said.
Anupam Khare, senior vice president
and CIO of specialty vehicle maker Oshkosh Corp., also sees generative AI
changing the workforce conversation, with employee productivity gains reducing
the need to hire, even in the case of backfilling as people are promoted up in
the organization.
"Three years ago we were a $7
billion company and now we are a $10 billion company -- much larger, but our
number of people are not increasing in that proportion," said Khare, who
added that Oshkosh has identified 40 potential generative AI use cases and
already has a couple in pilot, including code generation.
It is too early to see expectations
of reduced hiring materialize nationally. U.S. job growth has remained strong,
with employers adding a seasonally adjusted 303,000 jobs in March, more than
the 200,000 economists expected.
Separately the IT job market is expected to
shrink, driven in part by declining demand for non-AI skills.
At insurance company Nationwide
Chief Technology Officer Jim Fowler has guided the creation of a tool that
analyzes the cost of a given generative AI use case across several different
available proprietary large language models.
The tool has been helpful, he said,
in determining the cost efficiency of each AI model, based on parameters such
as the number of requests and the length of inputs and outputs. It has also
helped Nationwide determine whether it was more cost effective to stick with a
traditional process. For example, in its property and casualty business, Fowler
said the company decided not to move forward with a use case that looked for
answers on specific customer questions related to claims.
But even those results didn't sway
him from a belief that the company will be able to grow without having to hire
proportionally more clerical workers.
"Our goal is really to allow
our associates to do the higher-order thinking work and to take the clerical
work away so that we don't have to add more people as the company grows,"
Fowler said." [1]
When artificial
intelligence starts to do the work of higher-level thinking, we will stop
hiring those co-workers who are still thinking at a higher level. Nothing
personal. Musk said it would be soon.
The real question here is how to share those savings that show up in activities without
having to hire additional people. Amazon takes half of the profits from
businesses that use Amazon IT services. If, say, OpenAI becomes a monopoly like
Amazon is now, OpenAI would probably also take half of the earnings in AI
services. Now everything is not settled yet, so we don't know the prices.
1. EXCHANGE --- Generative AI Is Changing the Way Some Companies Think About Hiring. Bousquette, Isabelle. Wall Street Journal, Eastern edition; New York, N.Y.. 13 Apr 2024: B.9.
