Executives fear AI is making them obsolete

Four in 10 Australian executives wish they had chosen different careers as AI threatens their roles, as companies ‘hedge their bets’ on the technology.

Forty per cent Australian executives fear their skills are becoming obsolete due to AI, according to a new survey.

Australian companies are “hedging their bets” and “cagey” about the benefits of investing in artificial intelligence, while 40 per cent of executives fear their skills are becoming obsolete due to AI and wish they had chosen a different career path.

The apparent scepticism from corporate Australia and its workforces has been heightened by a recent Massachusetts Institute of Technology study that found 95 per cent of generative AI projects failed to deliver measurable financial returns, and research suggesting a “widening AI confidence gap” between executives and employees due to a disparity in AI training.

Rob Husband, vice-president, Australia and New Zealand, at human resources tech giant Dayforce, said while 50 per cent of the company’s new clients in the past six months had adopted some form of AI, firms more generally were cautious about the potential commercial returns from adopting the technology.

“If you look at the business case, I think internally organisations don’t want to make a commitment in a business case around the benefits of AI particularly if they are adopting it and they’ve not got lots of experience in other AI technologies,” Mr Husband said.

“So they’ve kind of hedged their bets in the business cases in terms of whether it will save people, or supplement existing (people) and allow them to increase capacity and add value, rather than take out resources.

“So I sense a lot of organisations are being quite cagey about the benefits that it will deliver and then they’ll measure the return as they’ve gone into it.”

Research released to coincide with the Dayforce Discover conference in Las Vegas, where the vendor also unveiled new AI tools designed to improve workflows, suggested executives felt somewhat conflicted about their organisations adopting AI.

While 93 per cent of Australian executives surveyed believed it was important to develop their AI skills, and 86 per cent trusted their employer to use the technology responsibly, 44 per cent agreed their skills were becoming obsolete due to the increasing presence of AI at work, and 41 per cent said they would have chosen a different career path if they had known the impact of AI on job security.

Alexandra Levit, a self-described “workforce futurist” who has spent 20 years collaborating with organisations to “try to dig out trends that have the biggest potential for disruption in the world of work”, told the conference that executives were “on the frontline of seeing what AI is capable of”.

“They’re the ones that have got the advanced demos, they’re the ones who are like, oh my gosh, this is better than I thought” and they’re a little bit intimidated by it,” Ms Levit said. “If you add the media hype into that, it’s something they are very excited and optimistic about but also a little bit afraid (of).

“What I want to say to executives is you are all in the best position to have career durability in this age of AI because research that we have done has shown people are really looking for expertise that can oversee AI because AI does not know anything on its own.

“So middle managers, senior leaders are hotly in demand in today’s job market because we are a little bit nervous about hiring junior level people who don’t know if their outputs and insights from AI are accurate or not. So even though a lot of executives are telling us, ‘gosh, I wish I’d chosen a different career, this really scares me’, in fact there’s never been a better time, I think, to be a mid- to senior-level leader.”

While the research suggested a three-speed approach to AI with executives sprinting, managers jogging and workers walking, Ms Levit said the gap was due to executives “having this little pie-in-the-sky attitude a bit about how AI is going to drive massive productivity and be integrated into everything effortlessly and, meanwhile, you have the managers who are kind of scrambling to get their teams on board with very minimal guidance”.

“It’s not just from organisations but also from government. We have seen a dearth of guidance about what to do so managers are like, ‘I didn’t sign up for this’, and they’re really struggling to meet what, in many cases, are unrealistic expectations for a team performance,” she said.

“I think workers are walking because AI at the end of the day doesn’t have a ton of utility for most jobs. We are going to see that shift dramatically but right now, for the average employee, AI is just another tool that they have to figure out how to use, that’s taking them away from the work that they have to get done. And it’s slowing them down.

“We even see that with software engineering, which is funny, we’d think that would be the last area, but software engineers are saying, ‘if I have to use AI, it’s taking me double the time to do the code because it makes all these mistakes, it’s taking me through processes when I know a short cut, I’ve been doing this for 10 years and the AI now wants me to do it differently’. They actually don’t want to use it because it’s causing more harm than good.”

Dayforce has more than 3000 employees across the Asia-Pacific and Japan region, and its Australian customers include Orica, which worked with Dayforce to consolidate 34 payroll systems into a single global platform covering 14,000 employees in 48 countries, and the Austin Group, which owns the Gazman clothing brand.

Dayforce chief operating officer Steve Holdridge said the company saw AI as an “accelerant” to help its customers manage their people and operations better.

“You are starting to read some stuff in the press now, AI’s a bubble, right, and you are going to have the dotcom, or AI’s everything,” he said.

“I think both of those are true. I think there will be a bubble of AI. I think there’s a bunch of firms that at some point somebody is going to say, ‘no one’s making any money on this’ and they’re going to disappear. But I think it’s going to continue to trend and there’s going to be huge investment in it and we ignore it at our peril.”

Asked about MIT’s failure rate findings, Mr Holdridge said there was a huge amount of hype about AI, leading to boards telling chief executives to come up with a plan so they could say they were all-in on the technology without a clear understanding of how to leverage it.

“You can spend a lot of money very quickly … and you can get no return if you don’t understand what you’re trying to do,” he said. “I think you will see some pullback. I think you will see some start-ups (that are) very successful. I think you will see a bunch of others that just fall off when people realise they are more noise versus anything else.

“I think that’s a wake-up to an organisation. At the end of the day, it’s still technology … it’s still a tool that humans have to work out where they put it. It’s not the answer for everything today. Maybe in the future it will be but there are some things that AI models do very well, there are some things they are not very good at yet. You have got to be smart about how you’re doing it. That has actually made our customers more focused on helping understand the business case and what I expect to get out of it.”

Ewin Hannan attended the Las Vegas conference at the invitation of Dayforce, which paid for his flights and accommodation.