Last updated: April 2023
Employment rates in recent months continue to remain strong in the UK, particularly given the backdrop of higher inflation and interest rates as well as concerns over the stability of financial markets.
However, the Office of Budget Responsibility has recently forecast that UK households are set to suffer a 7.1 per cent decline in living standards over the next two years. This represents the largest decline in living standards since records began, in 1956.
As a result, per-person income will remain below its pre-pandemic level even by the end of 2027-28 and in fact average real wages - that is, wages after accounting for inflation - will not regain 2008 levels until 2027. Further analysis indicates that UK workers are forecast to endure the longest period of wage stagnation for almost 200 years.
This wage stagnation comes at a time of accelerating and far reaching changes in technology, especially artificial intelligence, that directly impacts the labour market. A recent analysis indicated that up to 80% of workers could be affected by new AI technologies and that higher-income jobs would potentially face the greatest exposure. Another analysis demonstrated that new AI technologies can now span fields as diverse as mathematics, coding, vision, medicine, law and psychology, to name a few, with close to human-level performance. Further research noted that up to 300mn jobs globally could be exposed to automation. However, it is not clear at this stage the degree to which AI driven automation will help to expand markets and therefore employment or will force companies to substitute workers for new technology, thus reducing employment, or indeed a combination of both.
Invest in Yourself
Given the backdrop of both stagnation and rapid change, our continued advice to the Jamat is to invest in yourself, to invest in acquiring new skills, knowledge and abilities. Your domain-specific skills and knowledge will not be rendered useless overnight and in fact could prove to be more important than ever, as you are asked and are required to operate at a higher level of output and productivity. AI can automate many things, but it still requires direction on what to automate and why. You will still need to check, correct, refine and contextualise the output from various AI tools. This is where your domain-specific skills become increasingly important.
You should also continue to invest in hard skills, especially at a young age. AI does not make mathematics, reading and writing redundant, any more than a calculator or a computer does. Rather it will require you to operate at a higher, more strategic and creative level of thinking, which will require that you have, at the very least, a solid foundation in the basics.
Soft skills and transferable skills such as analytical and innovative thinking, active learning and learning strategies, complex problem-solving, critical thinking and analysis, creativity, originality and initiative will increase in importance as AI and automation takes over the more routine elements of your job. You will be required to do the things that AI cannot yet do - and may never do well.
Finally, the Jamat will need to adopt a lifelong learning approach to skills and knowledge. Gone are the days when secondary or even degree level education will set you up for life. Instead, you will be required to acquire new skills and knowledge as a routine part of your job. You should approach this with enthusiasm rather than anxiety, as it will offer you broader horizons and greater employment opportunities.
Next Steps to Take
In order to take advantage of the new automation technologies coming onstream, we advise the following
You should take this opportunity to gain early exposure to these new technologies, to see how they potentially impact your work. If possible, you should play with these new tools such as ChatGPT, Midjourney, Stable Diffusion and Dall-E. These are all relatively accessible at this time, although this free access may not last for long. If this is too daunting, we recommend at the very least watching a few videos on YouTube, to familiarise yourself with the current capabilities and limitations as well as the accessible entry points.
We advise that you remain up to date with developments in your field, via industry journals, newsletters and conferences. This is one of the biggest impacts on the nature of work in many years and it will be top of mind and part of the conversation in many industries, particularly the professional services and knowledge work.
We expect AI and automation to have an outsize impact on entry level positions, especially in professional services. As such, we advise that the youth especially do all they can now to overcome this hurdle. Employers will expect more from you when you go for your first job. You will need to demonstrate higher order thinking, relational and emotional skills and a strong familiarity with new technologies, simply to be considered for entry level roles. Internships and work experience, voluntary work such as IVC and skills development bodies such as the Duke of Edinburgh scheme will become increasingly important differentiators.
As always keep on top of job conditions in your particular sector, keep your LinkedIn and CV up to date and in an appropriate format and keep your interview skills and technique sharp. EPB Employment Support is here to help you with all of these.