AI: The Polar Jet Effect

There is little doubt that #AI represents the transformative force of our lifetime. This is why 9 of 10 are accelerating spend in AI with a majority declaring it their #1 investment priority. Collectively, they envision double-digit gains in productivity beyond the current 3% gain reported by the BLS in 2023*.

However, the most critical imperative of all is sitting somewhere up in the stratosphere within most organizations, lacking the critical attention it needs. It’s the imperative to win the battle for the best PEOPLE.?

Simply put - Organizations don't do things, PEOPLE do. ?It's never been truer than with AI for business.?

Yet, a large majority of execs report a growing gap between AI investments and workforce readiness*. Few say they understand their AI skill profiles or even how to define those needs. Furthermore, 87% can't find AI talent they need while 39% of workers are considering leaving to find new AI-savvy jobs.

Its a story is a story of two colliding forces that will create TAILWINDS for some and HEADWINDS for the rest.

Consider an analogy, the POLAR JET: a condition that occurs in the jet stream when unusually warm and cold air masses collide in the stratosphere to produce intensifying winds. When flying into the headwinds the journey will be 4x more turbulent, 20-30% slower and 50-60% more costly. For those in the tailwinds, they’ll experience the opposite.

Within the context of the AI skills marketplace, accelerating DEMAND (warm air) is now colliding with increasingly limited SUPPLY (cold air) to create a defining moment. Those that act quickly to secure the best talent will ride tailwinds to success while the rest will face the headwinds of dwindling skill availability and growing acquisition costs. ?At stake is a smoother journey to AI, lower costs, and faster time-to-value.

Overall, AI is the #1 job creation category as a fraction of overall employment* holding a 2.3% penetration rate, up from 0.5% in 2015 – a 5x expansion! ?This will only accelerate as businesses’ rank AI as top reskilling priority, jumping 12 positions last year. Employers are also willing to pay an average of 47% more for the best AI skills*.? And to make things worse, the demand for an AI education is 4.4x capacity at US universities and 2.6x for data science programs, which will slow new entrants into the AI labor force.

Clearly, the conditions have been set for an increasingly turbulent AI talent marketplace, as AI job openings grow faster than job seekers.

To bring it all home, let’s explore the supply and demand dynamics within three critical AI skill categories: Engineers, Researchers and Executives

And why its time to create a sense of urgency before it’s too late.?

AI Engineers

For those that build AI solutions …

• ?Demand has grown 75% YTY while SUPPLY has only grown 40% - a whopping 2x gap. In addition, the Bureau of Labor Statistics projects demand to expand by an 82% rate over the years ahead.
• #GenerativeAI will act as an accelerant. For example, Upwork reported a 450% increase in job postings and a Lightcase study indicated a similar growth rate driven by 385,000 new #GenAI US job posting in 2023.
• Gaps in organic skills will also drive a wider supply and demand gap. The Randstad’s Work Monitor Pulse reported a staggering 2,000%surge in roles demanding GenAI skills but only 10% are being trained.
• Demand will drive a 20% compounded growth in salaries in the years ahead. This is larger than all other occupations combined and represents a historic level of growth within the typical technology adoption curve*. ?

AI Researchers

For those that architect advanced AI models (GenAI, LLM, Neural Nets, etc.) …

• ?A historic 15% of all AI jobs are in research, as compared to cloud at 2%. ?As the NBER points out - “AI is the only technology at the top in both number and percentage of research job postings”6.
• AI researchers are the #1 job category being sought by employers among 11 individual technologist roles tracked a Foundry AI Priorities Study in 2023.? Nearly 33% of employers are seeking this skill set.
• The number of researchers taking jobs in private industry has grown 3.5x over the last decade to 70%. Overall demand by businesses will expand by 23% yet growth in supply will stagnate at 4%.
• Growth in salaries in private industry has nearly doubling over the last two years to an average of $180K as the supply & demand gap widens.

?AI Executives

For those responsible for realizing business impact and ROI from AI investments …

• The chief AI Officer (CAIO) is one is one of the hottest new roles being created by CEOs.? According to research by Foundry, 11% of businesses have a CAIO in place, which will triple in to 32% in 2024.
• The number of businesses that have hired VP-level AI strategy leaders will also surge to about 80% in the years ahead, growing from only about a 25% of companies that have such a position today.
• Nearly 8 in 10 of current c-suite leaders are concerned about their own lack of AI skills with 56% believing AI is becoming a required skill set in the near future. Over half fear they will be replaced.
• The surge in demand for AI execs is resulted in compensation packages averaging over $1.1M in 2023 due to the limited supply of execs that have business + AI tech skills.

Cleary, as the supply and demand dynamics indicate, businesses need to create a sense of urgency to secure the AI talent they'll need, now rather than later, before it’s too late.

The “Polar Jet” is intensifying.? Get into the tailwinds, else risk an uncertain future.

And finally, I have been active in helping businesses source great, cost-effective AI talent, so if I can help you, please reach out!

Sources:

(1)????? World Economic Forum

(2)????? Pluralsights

(3)????? Amazon

(4)????? US Bureau of Labor Statistics

(5)????? MIT Industry Now Dominates AI Research

(6)????? US Bureau of Labor Statistics

(7)????? Heidrick and Struggles

(8)????? edX Workplace Intelligence

(9)????? Vox - Gartner Group