“The Unstoppable Career Wave”

AI is hitting the global labor market like a Tsunami. 24 million Employees Set to Redefine Their Futures by 2030

Artificial intelligence is hitting the global labor market "like a tsunami" International Monetary Fund Managing Director Kristalina Georgieva said on May 13th, 2024. AI is likely to impact 60%, other analysts say it could be as high as 80% of jobs and most importantly she said, "We have very little time to get people ready for it, businesses ready for it." The question that is on my mind is “Who needs to get the people ready for it?” Yes, it’s the CEO, it’s the Leadership team, it’s the AI/ML Tech teams but I can’t think of functions that are more under pressure because of AI than HR & L&D…

…You must be ready for this “Unstoppable Career Wave” because it’s coming!

As noted by Citigroup in their report titled “AI in Finance, Bot, Bank & Beyond” (based on research from Accenture), nearly two-thirds of all work in banking and insurance has high potential for AI-driven automation or augmentation. In banking alone 54% of jobs, yes 54%, have high potential for automation (read job displacement in figure 14 below). Banking is at the tip of the spear along with Insurance, Software, Capital Markets down to Natural Resources all Industries with the potential for 20%+ job displacement from AI.

There has been a boat load of articles written about AI, GenAI, LLM’s and how AI Agents are going to automate roles out of existence but not much is being written about the possible cost to organizations of the AI wipeout. So, let’s do the math on this number 54% and use banking as the example. This is where HR Leader eyebrows should start to raise up because according to Fortune magazine in an article titled “How BNY’s new AI tool Eliza is minting an army of disposable assistants.” There are 702,000 banking jobs in the US that will eventually be eliminated by AI.

So based on the assumption that most jobs eliminated will be client servicing and sales operations roles we can assume the following costs:

Severance of $2,500 per employee, total of $1.76 billion

Cobra Health Insurance $1.26 billion (50% of Cobra premiums for six months at $600 per month)

Payroll taxes $135 million (7.65% of severance payments

And…some form of Outplacement Services $1.4 billion ($2,000 per employee)

Total AI wipeout cost $4.56 billion.

Assume now “average” costs for separations in the US banking sector the number rises to $8.55 billion. From these numbers we can reasonably predict a $10 billion wipeout of AI in banking. If we apply the same calculations across all Industries and using the 12 million occupational transitions number predicted by McKinsey in their research titled “Generative AI and the future of work in America” the potential wipeout of AI in the US alone could be as high as, wait for it, $146 billion. ?

But not so fast…

“The Unstoppable Career Wave” Is not about employees losing jobs because of AI it’s about career transitioning. It’s about the fact that “Quit rates” and “Separation rates” are at their lowest levels since 2020 which means employees are not losing jobs. Just look at the latest data from the Bureau of Labor statistics in the US. Quit rates are at their lowest levels since 2020.

Reading from the BLS news release dated October 1st…

“In August, hires changed little at 5.3 million. Total separations changed little at 5.0 million. Within separations, quits (3.1 million) continued to trend down and layoffs and discharges (1.6 million) changed little.”

So, what’s going on, who’s right? Accenture research, 54% job displacements because of AI or the U.S. Bureau of Labor Statistics, total separations in the US job market changing little, trending down.

Let’s take a little trip down memory lane with Citigroup research to try and understand what might be going on…

“Initial concerns about job displacement have been unfounded. Consider the launch of Microsoft Excel it did not lead to the demise of Accountants or Bookkeepers, instead it let those roles work smarter and deliver higher value yielding services. As AI systems generate significant portions of outputs that lead to financial decision making the demand for oversight is likely to increase dramatically. As we witness the rise of AI agents the need to oversee their work will grow and so we can expect to see the emergence of “AI Managers”.

Skills will need to evolve as the Citigroup research paper so eloquently puts it…

“Violinists will become conductors, transitioning from an individual contributor to orchestrating a team of agents; asking the right questions, giving feedback and stepping in when things go wrong.”

So, if according to McKinsey “Generative AI and the future of work in America” 12 million employees will refine their futures by 2030 where will they transition their careers to if they are not leaving organizations?

The answer must be that they will transition into new internal jobs. So, the pressure on HR is not a cost pressure, it’s a transitioning pressure. HR leadership must prepare themselves for a wave of career transitioning on a level that they have never seen before. Career transitioning is all about building new career pathways, upskilling and re-skilling employees to new higher value yielding jobs inside of the organization.

To support career transitioning on the levels that we have never seen before will require a new set of career mobility tools and capabilities…

…In this story AI is the job displacement villain, but it is also the career mobility surfboard.

This article is not written as a sales pitch so if you want to jump to the summary at this point, please feel free. If you feel compelled to learn more about how AI will power a new generation of career mobility solutions please keep reading:

1.????? AI generates Career Playgrounds for employees to plan futures

With AI organizations can generate a “Career Playground” for their employees to help them plan for new career pathways. Employees can look across a landscape of career options/roles and choose their now role, next roles (roles that might interest them) and their Dream role. In the example below the “Now role” is Customer Service Representative, the “Next role” is a Financial Analyst, and the “Dream role” is a Compliancy/Risk Manager.

Simply by dragging and dropping roles/moves employees can generate career pathways. Because the career playground is generated by AI it means that the highest impact roles (colors tell the story, the darker purple roles) for the organization appear at the top of each category of roles so guiding employees towards roles that yield the highest value for the company.

Once the career pathway is built employees can move the roles to a “Skills Board” for precision skills development aligned with learning. The AI identifies the top skills for development and generates a personalized learning system with suggested on-the-job experiences and experts to help coach the finer details.

2.????? AI Auto Generates Career Pathways

Because of AI employees can go beyond creating their own career pathways using a manual drag and drop procedure. Just by knowing an employees Now/displaced role (Client Service Representative in this case) and a Dream role (Risk Manager) the AI will automatically generate a career pathway from “Now to Dream” and suggest all the moves in-between.

Below is the exact pathway generated by the AI, from Client Service Representative to Risk Manager.

The AI suggests all the moves along the pathway, these moves could be both inside of the organization or outside of the organization. The AI can identify the % of transferable skills on a role-by-role basis (purple circles in the picture above) that are applicable to help prepare for the dream role and can even show the “Accumulated Progression” of transferable skills towards the dream role (red circles in the picture below).

But that’s not all, because AI can even make “Dream Role” suggestions based on the family of roles associated with the “Now role” or, and this is the magic of AI, can suggest a pivot to something completely new and different.

The AI can build three different types of carer pathways:

3.????? AI identifies new Skills required for Higher Value Yielding Roles

The AI generates career pathways from now roles to dream roles. It also identifies the most important skills required for each role in-between, meaning employees can focus on developing the important skills that drive success in each role and develop transferable skills required to be successful in their dream role.

The AI not only identifies important skills, but it also guides employees to prioritize these skills. Again, colors tell the story, the purple skills that appear at the top of each skills category on an employee’s “Skills Board,” (built by the AI from the chosen career pathway) are the most important skills.

4.????? AI generates a Personalized Learning System for every Employee

Skills link through to learning resources. The AI builds a “Personalized Learning System” based on skills prioritized for development, see the picture below. Learning includes the best courses from the top content providers including LinkedIn, Udemy and Coursera. It includes the best articles, the top Ted Talks and highly valued Masterclasses from expert coaches. The content is served-up for employees with a range of filters such as the best “Free” vs. “Paid” content or “Most Popular.” Organizations can of course add their own locally developed content.

5.????? AI can generate a list of Dream Skills aligned with Organization Culture

The AI not only identifies the most important skills required for each move towards a dream role, but it also builds “Dream Skills”. Dream skills are the transferable skills that make workforces more adaptable and flexible. These are the critical thinking, problem solving, communication, empathy building and creativity skills that are so critical for the future workforce. Dream skills can be aligned with organizations culture, a “Super Set” of skills can be defined, a set of skills to be mastered by every employee because these skills will drive the future success of the organization. For example, AI skills would be in todays “Super Set” of skills for all Big Tech and Fin Tech employees.

6.????? AI Suggests On-the-Job experiences critical for Skill Development

The AI not only identifies the most important skills, the transferable and dream skills and a personalized learning system, it also suggests a set of “On-the-Job” experiences essential for real development. It’s what you learn on the job, boots on the ground, that has the biggest impact on employee development. AI suggests a list of essential on-the-job experiences and it builds a project plan towards the execution of each experience with start and due dates in the form of a “Skills Plan” shared with Managers, who in-turn can add their own additional suggestions to precision the list.

7.????? AI takes Skill Gap Analysis to the Next level

Skills Inventory enables employees to self-assess their skills against a skills profile for their Now, Next or Dream roles. The results identify important skill gaps and direct skill development prioritization. Managers can complete a “Skills Inventory” for their team members providing additional perspectives on skill gaps and priorities for development. A feature called “Sync” enables employees to compare their self-assessment vs. their managers which enables a rich discussion between managers and team members in 1:1’s or performance reviews. Organizations can roll-up skills inventory outcomes so skill gaps can be identified or, employees ready for higher value roles identified.

AI takes Skills gap analysis to the next level by comparing levels of mastery with “Industry Peers”. “Sync” enables employees to compare their self-assessment results not only with managers but also with Industry Peers. Organizations can roll-up Industry skilling comparisons to see where they are strong or behind peers across Industry.

8.????? Manager Suggestions for Career Moves and Skill Development

Manager suggestions is not a capability powered by AI, but I’ve added it to the list because we know that managers caring about their team members is a top reason why employees stay and thrive.

Managers can make suggestions about career moves and skills for development. See the picture below that depicts a manager suggesting a career move for a team member and how that shows-up for the team member on their career pathway. Team members can choose to “Accept or Reject” manager suggestions.

Managers complete a “Skill Inventory” for team members who can in-turn compare their self-assessment with their managers views. “Manager Sync” is a feature that enables employees to gauge their level of connection with managers regarding skill levels and skill priorities, critical because we know that a poor manager connection is one of the reasons why employees quit.

In summary, employment data for July, August and September continues to support the thesis of “The Unstoppable Career Wave,” low employee separations, low quits, rising wages, lower average employment hiring and 24 million employees set to redefine their futures by 2030.

AI is both the job displacement villain of the peace and the career catapult for employee futures!

Because of AI HR Leaders can deploy next generation career mobility solutions that enable employees to redefine their futures inside and beyond the organization.

Thanks for reading, Alan.

CEO The reaching4 Career Playground and Author of "The Unstoppable Career Wave"

If you’re a CPO, HR or L&D Leader and you found anything about this article helpful, please repost to your network and comment on the parts that were most helpful. Thanks a million.

#theunstoppablecareerwave #careerpathways #career #careergrowth #careermapping #careerplayground #careerdevelopment #skills #skilldevelopment