This is an extract from “AI and human capital“, the third report of the four-part series, “Asia’s AI agenda”, by MIT Technology Review Insights.
When asked in the abstract, do you believe that AI will destroy or disintermediate more jobs than it creates over the next five years, 42% of respondents agree, compared to only 24% who disagree.
This shows that when considering the region as a whole, they consider AI to be a destructive force in employment markets. Yet when asked about headcount in their own organizations, the story is one of growth. Some 77% of respondents expect headcount to increase over the next five years as Asia continues to lead the world in economic expansion. Overall, less than three percent of respondents expect to see any headcount contraction.
One fifth of all respondents indicated that they expect five-year headcount increases of more than 15%. Many industries report even higher expected overall increases, including labor-intensive sectors such as commodities and construction, and knowledge-intensive sectors such as information and communications technology (ICT) and professional services. About 80% of respondents in the ICT and professional services categories reported that headcounts would grow. While few respondents reported headcount contraction (the highest number was in financial services, yet only 9%), those in manufacturing and transportation were the most likely to say that their headcount would remain the same in five years’ time.
Headcounts are increasing
When asked how staffing levels will change across various functions over the next five years, survey respondents indicated significant headcount growth in “customer-facing” activities. More than 60% of respondents reported that sales and marketing, customer service, and product development functions will grow. Respondents from more knowledge- and technology-intensive industries reported even higher growth. Over a quarter of ICT respondents expect customer service hiring to increase by more than 15% over the next five years.
Headcount increases are expected to be lower in back office functions such as finance, HR, manufacturing, and maintenance. Still, just 9% of respondents anticipate headcounts in finance, HR, and administration to decrease.
First front office, then back
The pressure for companies in Asia to grow rapidly and compete on service explains why executives are ploughing both human and technology resources into the customer-facing areas of the business. Viriya Upatising, chief information officer at Thai communications conglomerate True Corporation, is overseeing the launch of a large effort to overhaul its online and voice-based customer experience channels using AI tools. This involves using natural language and image recognition to achieve a target of reducing call center staff by 1,000 people.
However, Upatising believes that True’s use of AI will enhance overall job quality and satisfaction. “The goal is actually [to] increase productivity while providing better service,” he says. “Right now, we have a lot of customer query backlogs, which [natural language-enabled] chatbots can help us clear.” Upatising points out that employing AI-enabled image recognition to vet identification documents from new customers also helps customer experience teams process orders more efficiently, and comply with government regulations.
“The goal is actually to increase productivity while providing better service. Right now, we have a lot of customer query backlogs, which natural language-enabled chatbots can help us clear.”
Viriya Upatising, Chief Information Officer, True Corporation
Increasingly, industry observers are finding that deploying AI and automation does not result in a zero-sum game in which headcount is reduced in lockstep with new AI software. Instead, AI creates efficiencies that allow employees to become even more effective and productive. “As our tools improve, technology magnifies our leverage and increases the importance of our expertise, our judgement, and our creativity,” explains economist David Autor in a 2016 TED talk about the impact of automation on jobs.
The finding that only one-third of Asia-based respondents are using AI within their finance and human resources functions presents an odd contradiction, as the region’s decision-makers often describe back-office functions being among the most “AI ready.” But perhaps economic realities offer an explanation. High growth, agile competition, and fast-rising consumer expectations of digital sophistication push businesses towards aggressive, expansive go-to-market strategies. The higher penetration of AI in customer-facing operations is likely a response to these pressures.
While it may be considered “easier” to load AI capabilities into the back office, increasing efficiency there is a currently a lower priority. However, concerns about economic headwinds cooling global growth in the coming years may prompt technology leaders to look more closely for back-office use cases that enable quicker fixes for operational efficiency.