We Need AI Workers. Do Not Panic.
David Birch
International Keynote Speaker, Published Author, Global Advisor and Investor in Digital Financial Services. Recognised thought leader around digital currency, digital Identity and digital assets.
Britain’s Chartered Institute of Personnel and Development (CIPD) published its quarterly labour market outlook recently, based on a survey of more than 2,000 senior HR professionals. It shows that around one in five employers have difficulties with candidate attraction and recruitment, with staff retention seen as being the biggest challenge in the coming year. Given that just a tenth of employers expect their headcount to fall in the next quarter while a third still expect it to grow, it seems to me that fintechs, just like many other businesses, are going to have to come up with some new strategies.
Talent Search
You would think that in an era of remote working and global talent, it should be easy for fintechs to recruit the people that they need. But remote working is a blessing and curse for employers. Yes, you can hire across geographies. But it means that competitors can hire across geographies too. The National Institute of Economic and Social Research warned last week that businesses have become “frustrated” with British workers as more than nine million people of working age have dropped out of the jobs market! Jon Boys, senior CIPD labour market economist, hits the nail on the head for me, saying that
“To see a sustained return to growth, there needs to be a real focus on boosting productivity by investing in workplace skills and technology”.
He is right. In order to get nice things, such as pay rises and pensions, we have to improve productivity. And when it comes to productivity, Brits are behind. According to the Office for National Statistics (ONS) we are about a sixth less productive than our G7 friends. This is not a new problem, by the way. When Philip Hammond was Chancellor of the Exchequer he pointed out that “the productivity gap is well known, but shocking nonetheless ” and went on to lament that British workers produce in five days what German workers produce in four, meaning many British workers work longer hours for lower pay than their counterparts.
A couple of factors stand out amongst the many reasons for this sorry state of affairs. In France (and to a lesser extent Germany) restrictions on working hours, industrial pay bargaining and limits on redundancies make hiring workers more expensive and risky than in the U.K. which in turn encouraged French and German firms to invest more in automation.?
To amplify that point, this car wash case study illustrates how we Brits diverge from our continental cousins. Car washing is a big business (around half a billion pounds a year on commercial car washing) but instead of using the high-tech car washes at our local garages we (me included) pay people to wash our cars using the most inefficient means available: a hose, bucket, water, soap and sweat. The hand car wash has grabbed around half of the commercial car wash market in the U.K. and the number of car wash machines has more than halved. We have successfully reversed industrialisation, which was the source of our rising prosperity over the last couple of hundred years.
As the economist commentator Duncan Weldon said
Why am I talking about robots? Well, let’s not fall behind in fintech as we did in manufacturing. Financial services are key to our economy so let’s invest in AI and make a step change in productivity and square the circle of more value with fewer workers.
领英推荐
In fintech we can start with the low hanging fruit in IT, where early experiments are yielding very useful results. A good example is the experiment conducted by Australian bank Westpac. They randomly split 60 software developers into four different groups. Three of the teams used AI coding tools from Microsoft, Amazon, and OpenAI while a control group coded by hand. The results were unequivocal. All the AI tools provided significant benefits with an average productivity gain of almost half across all AI tools. That translates into turning 200 developers into 300 developers.
We can then move on to other functions throughout the organisation. In my own field of professional services, it is the case that consultants all across the skills distribution benefit significantly from having AI augmentation , with those below the average performance threshold increasing by 43% and those above increasing by 17% compared to their own scores.
However, remember ChatGPT is a bullshitter . If you are a good consultant and know what the answer to a client’s problem is, then AI makes you more productive. But if you don’t know what the answer is, you can’t spot the hallucinations and are significantly more likely to come up with wrong answers. This suggests to me that since your workers will be using AI whether you want them to or not, training them to use AI properly should be a priority.
Do Not Panic
We have a productivity problem, so it is reasonable to ask whether AI tools such as ChatGPT will make professionals obsolete or complement their skills and enhance productivity. I am firmly of the latter opinion. Researchers who carried out an experiment that recruited college-educated professionals found that participants assigned to use ChatGPT were more productive, efficient, and enjoyed the tasks more. As with the consultants mentioned earlier, participants with weaker skills benefited the most from ChatGPT, which has significant policy implications for efforts to raise overall workforce productivity.
Fintech is no different to any other sector and it needs to go all in on this. We should embrace the opportunity to bring AI into our everyday work. As Professor Scott Galloway rightly paraphrased the whole complex debate about workers and jobs, you are not going to lose your job to AI, you are going to lose your job to someone who uses AI better than you do.
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