AI Era: The Declining Premium on Human Skills & Competencies

The profound influence of AI on business landscapes is now an irrefutable fact, not a speculative topic. The pressing question that remains is not if, but when AI will achieve ubiquitous adoption across industries. As AI integrates into the workforce, it presents a double-edged sword: while it promises exciting advancements and opportunities, it also poses significant challenges. Of particular concern is its potential to adversely affect employee earnings and livelihoods, a consequence that demands careful consideration and proactive planning from business leaders and policymakers alike.

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While current discourse in business and management circles predominantly centers on adaptive management strategies/philosophies and potential productivity gains, a critical aspect often overlooked is AI's impact on the (de)valuation of human skills and competencies—a factor that directly influences the age-old 'effort-reward' work paradigms.

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The trajectory of technological advancement across decades reveals a disquieting pattern: job shifts precipitated by technological incursions have consistently and disproportionately affected employee wages and earnings. This disadvantageous situation for workers is currently unfolding in China, where the introduction of autonomous taxis has significantly impacted human taxi drivers' livelihoods, sparking widespread discontent.

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As full-fledged AI adoption becomes a reality in the near future, we can anticipate an exacerbation of this trend across a broad spectrum of what may be termed 'non-premium' human skills and competencies. The implications are far-reaching, potentially reshaping entire labor markets and challenging our traditional notions of work value. This scenario is not merely a localized phenomenon but a harbinger of a global shift.

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For businesses, effective management of this transition will be the difference between thriving and faltering in the AI-driven landscape. As with any technological revolution, employee buy-in is crucial for successful AI integration. Addressing workers' fears and misgivings, especially regarding the impact on their earnings, is a task that implementors and management cannot afford to underestimate.

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While AI promises to enhance organizational efficiencies and financial milestones, it simultaneously poses a potential threat to the premium placed on human skills and competencies. This paradoxical situation is poised to affect employee earnings and, consequently, their motivation. As AI capabilities expand to automate tasks across the spectrum—from unskilled to highly skilled—the premium on human skills and competencies is likely to diminish correspondingly.

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This impact will not be confined to a single sector of the workforce. Both white-collar and blue-collar job holders will feel the effects in a staggered manner. The concurrent advances in robotics and AI suggest that all forms of human skills are susceptible to devaluation over time. A recent survey among 3,000+ accomplished AI researchers and scientists, who regularly publish in reputable journals, corroborates this probability in the not-too-distant future.

Expected timeframe of AI capabilities to match humans:

Looking beyond the hype of quick-profit ‘AI makers’, and the pessimism of ‘AI-skeptics’, it's becoming increasingly clear that AI will profoundly affect humanity within the next decade (10-15 yrs). If the history of human perseverance and ingenuity are any indicators, the current technological challenges faced by nascent AI systems will likely be addressed over time. The collaborative and competitive efforts of numerous brilliant minds working both in tandem and in silos are bound to produce breakthroughs. Modern human history is replete with such instances of seemingly impossible and paradigm-shifting advancements in scientific and technological endeavors.

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Given this relatively short 10-15 yrs timeframe, businesses and management must proactively strategize and address the unfolding employee-affecting scenarios that AI technologies will inevitably pose. Especially the critical aspect of AI potentially adversely affecting employee remunerations. Basic economic principles dictate that anything in abundance loses its premium value, and human skills and competencies are not exempt from this rule.

Top AI researchers predict by 2045 almost all human jobs can be handled by machines:

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The rise of AI could fundamentally alter the hardwired human 'effort-reward' paradigm that has been the backbone of work motivation for centuries. In an increasingly competitive and expensive world, rewards are what motivate employees to forge ahead and excel. Any possibility of an adverse impact on this motivational structure is bound to backfire, regardless of how impressive the replacement technology may be.

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The potential devaluation of human skills raises profound questions about societal structures and economic systems. As AI capabilities grow, we may need to reconsider our notions of work, value, and compensation. This could necessitate radical shifts in education, training, and social safety nets to ensure that humans can coexist productively with AI systems.

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The challenge for businesses and policymakers will be to navigate this transition in a way that harnesses the productivity gains of AI while mitigating its potentially destabilizing effects on the workforce. This may involve reimagining job roles, creating new categories of human-AI collaborative work, or even considering unconventional solutions like Universal Basic Income (UBI) to address potential widespread displacement.

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While AI promises unprecedented advancements in the future, its impact on the probable devaluation of human skills and competencies cannot be underestimated. As we stand on the brink of this technological revolution, it is imperative that we proactively address these challenges. The future of work, employee motivation, and societal stability may well depend on our ability to successfully manage this transition and redefine the relationship between human skills, AI capabilities, and economic value.

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Author Profile: Writes about life. Authored the expert/academia-endorsed first-of-its-kind HR-Management hand-book "Future of Work - AI in HR" acclaimed for its research-backed insights and accessible writing style https://lnkd.in/gTP7u4Q5 . The book is available globally on Amazon for purchase (https://lnkd.in/gSmTWMsx ), and available for reference at multiple pre-eminent global academic libraries including Harvard Business School, Oxford University, Cambridge University, Princeton University, Peking University, & National University of Singapore.

Consults on human potential and workplace HR. A keen observer of emerging trends and technologies that enhance workplace productivity. AI and advanced technology and its effective and ethical usage at the workplace is the current preoccupation. Nearly three decades of broad experience developing Leadership/Human Resources in large global organizations and start-ups. Enjoy analyzing and going beyond the hype. Admire the word ‘holism’.