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Biggest impact of generative AI will be in banking and technology, report says

Written by The Anand Market

Updated on:

A new generation of artificial intelligence is poised to upend old assumptions about technology.

For years, people working in warehouses or fast food restaurants have feared that automation would eliminate their jobs. But new research suggests that generative AI – the type used in chatbots like OpenAI’s ChatGPT – will have the biggest impact on white-collar workers with high-paying jobs in industries like banking and technology.

A report published Thursday by the Burning Glass Institutea non-profit research center, and SHRM, formerly the Society for Human Resource Management, does not go so far as to claim that technology will eliminate large numbers of jobs. But it makes clear that workers need to better prepare for a future in which AI could play an important role in many workplaces so far largely untouched by technological disruption.

For tech professionals, this means they may be building their AI replacements.

“There’s no question that the workers who will be most impacted are those with college degrees, and they’re the ones who always thought they were safe,” said Matt Sigelman, president of the Burning Glass Institute.

For hundreds of companies, the researchers estimated the share of payroll expenses that goes to workers employed in the 200 occupations most likely to be affected by generative AI. Many of these jobs are held by affluent college graduates, including business analysts, marketing managers, and software developers. , database administrators, project managers and lawyers.

Companies in the financial sector, including Goldman Sachs, JPMorgan Chase, and Morgan Stanley, have the highest percentages of payroll likely to be disrupted by generative AI. Tech giants like Google, Microsoft, and Meta aren’t far behind.

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Bringing AI to do human work could provide significant cost savings for these companies. The study estimates that banks and some technology companies devote between 60% and 80% of their payroll, or more, to workers in occupations most likely to be affected by new technologies.

The retail, restaurant and transportation sectors are least likely to be affected by generative AI, according to the report. Companies like Walmart, McDonald’s and Delta Air Lines primarily employ workers without college degrees who perform tasks such as helping customers, stocking shelves, cooking food and handling luggage. They dedicate less than 20% of their payroll to employees in occupations most likely to be affected by generative AI.

The report does not predict potential job losses related to generative AI. It will depend on employers, the report says, and whether they want to bank the savings from AI automation or use that money to invest and expand, adding more workers. Most experts expect AI to primarily change jobs in the coming years rather than eliminate them — although that could change if the technology improves sharply.

The report highlights the need for increased training to prepare workers to adapt to rapidly arriving technology, said Johnny C. Taylor Jr., chief executive officer of SHRM.

“Businesses and governments will have to invest seriously to anticipate this development,” he said.


Retail, restaurants, and transportation are low on the list of industries likely to be impacted by generative AI.Credit…Amir Hamja/New York Times

The report is the latest entry in a growing field of work that attempts to predict the effect of generative AI on the economy and workplace. Other studies predict increased economic growth and productivity, automation of activities that total the equivalent of millions of jobs, and up to 50% time savings for common office and coding tasks.

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In its research, the Burning Glass Institute began by estimating generative exposure to AI by occupation in a widely cited study. academic document which was published last year. It then added its own data sets – including job postings, payroll information, government statistics and company information – for company-by-company calculations. The SHRM report includes a ranking of selected companies. The Burning Glass Institute produced percentage estimates of payroll spending by company for the New York Times.

Manav Raj, co-author of the academic paper the Burning Glass Institute relied on, said the new research appears to be a credible effort to analyze data at the company level. But at this point, he says, all studies are just educated guesses.

“The many papers generally conclude that this wave of AI has the potential to have a very large effect,” said Mr. Raj, an assistant professor of management at the Wharton School at the University of Pennsylvania. “But it will take some time to discover what this effect actually looks like.”