How accurate benchmarking data can reduce labor shortages through AI integration

The integration of generative artificial intelligence (GenAI) into the labor market necessitates a dynamic approach to workforce management, highlighted by the February 2023 Global Labor Market Insights report. This report, leveraging the HRForecast database, examines the impact of technologies like ChatGPT on job postings worldwide, revealing year-on-year growth and variations across regions such as Europe and North America. Industries like healthcare and IT are pinpointed for high demand amidst a broader range of job types affected by shortages.

In response to these challenges, tools like smartLibrary emerge as essential strategic assets for workforce planning. Powered by real-time market data, smartLibrary offers comprehensive insights through accurate benchmarking data for time-to-fill job roles. It enables organizations to make informed decisions about talent acquisition, skills development, and future workforce needs. As businesses face the complexities of AI-induced labor shortages and surpluses, smartLibrary represents a critical advancement in adapting to the evolving labor market shaped by GenAI. But first, let’s consider the general situation in the labor market and GenAI.

The report predicts that GenAI will boost productivity and change job roles over the next 10 years. Still, this surge will come at the cost of short-term layoffs and a slowdown in hiring in many white-collar occupations as employers adjust to the new reality.

According to the report, early adopters of GenAI will see increased productivity through automation, expansion, or role transformation — a surge in production that will outstrip demand, leading to overstaffing in many industries.

While these disruptions will result in high human costs, they will likely be temporary. Corporate profits will increase due to lower wage costs, leading to new jobs to fill some of the lost jobs and lower prices for goods and services.

While GenAI may initially lead to job losses in certain sectors and occupations, other sectors will grow as the economy adapts.

Specific industries and roles likely to be affected include:

Administrative and support roles

Administrative and support roles are experiencing a decline due to automation, and GenAI anticipates further expediting this trend by automating and enhancing tasks within these professions.

Nevertheless, HRForecast data highlights the significance of the administrator role for operational efficiency in organizations demonstrating consistent job growth. Notably, there has been a 19% increase in demand for administrative roles over the past 12 months, primarily driven by integrating new skills that are still part of the automation wave. These roles continue to exhibit stable skill requirements and are positioned at a lower level of wages, ranking 144th in terms of compensation.

Among new skills you can find:

• Data entry
• Data analytics
• Data administration
• Database management
• Resource management

Financial services

Roles within this sector will substantially transform because of GenAI’s capabilities to automate complex, data-driven tasks.

For example, demand for finance specialist positions has increased by 5% over the past 12 months, indicating steady job growth in the finance and control sector. It ranks highly for hiring speed, ranking 9th out of 232, with an average time to hire reduced by 67% to 23 days, indicating an urgent need for these professionals. Despite steady job complexity and little shift in skill requirements, pay remains at the bottom, ranked 191 out of 232. This position offers fast-track employment opportunities for those entering the finance industry, albeit with a lower starting salary.

Among new skills you can find:

• Billing systems
• Finance management system
• Financial analysis
• Forecasting methods
• Business management

Business and legal services

Legal professionals, including those involved in contract review, litigation support, and other areas, may see their work automated or augmented by AI technologies.

Demand for the Legal Affairs Manager position, critical to ensuring an organization’s compliance with legal requirements, has grown by 52% over the past 12 months, ranking 20th out of 121 positions in the Legal & Compliance family. Despite slow skills growth and an 8% decline in digital skills requirements, this occupation remains vital, with an average hire time of 30 days. Regarding salary, it ranks lower, ranking 79th out of 121 jobs. The advent of GenAI opens up opportunities to improve the efficiency of legal research and document preparation, suggesting a future where legal managers can use technology to streamline operations while focusing on strategic decision-making and compliance.

Among new skills you can find:

• Legal tech proficiency
• Data privacy and security knowledge
• AI ethics and governance
• Digital literacy
• Analytical thinking and innovation

Marketing

Roles such as marketing researchers that involve data analysis and strategy formulation could be heavily impacted by AI-driven automation and augmentation.

Marketing research professionals are key in developing data-driven marketing strategies, focusing on customer and market analysis to guide business development. The position is ranked 81st out of 130 in demand in the marketing sector, with growth of 3% over the past year and an average hire time of 28 days. This position is undergoing dynamic changes, particularly with reduced job complexity and demands for digital skills. This shift has been largely driven by GenAI, which is revolutionizing the profession by automating data analysis and improving customer insights, requiring new skills to integrate AI and interpret data.

Among new skills you can find:

• Data collection
• Data-driven marketing
• Digital marketing
• Marketing research
• Marketing research tools

Writing and editing

GenAI’s ability to generate written content could transform the labor framework for writers and editors, automating some aspects of content creation.

Influenced by GenAI, the content designer role shows a nuanced job market within the art, design, and entertainment sectors. Despite a slight 4% decline in demand, ranking 75 out of 126 for job growth, it boasts a rapid hiring process (14th fastest with an average of 25 days) and a high salary (ranked 36th). The role’s skill evolution is slow, with a 14% change in the past year and a modest 7% increase in digital skill requirements, indicating a stable job complexity but a growing need for GenAI proficiency. This reflects a competitive yet lucrative field where adaptability to technological advancements remains key.

Among new skills you can find:

• GenAI literacy
• Technical proficiency
• Data literacy
• Ethical considerations and bias awareness
• Innovation and experimentation

Graphic design

The creative process in graphic design could be augmented by AI, affecting designers’ roles by automating routine tasks or enhancing creativity.

Despite a stable job market, the graphic designer job is ranked 77th out of 126 in demand for art and design, with a 6% drop in job demand over the past 12 months, with the hiring process improving significantly, now ranging from 7 to 62 days. Skill requirements and job complexity remain stable, indicating continued demand for digital design skills. The emergence of GenAI introduces new tools and techniques, offering opportunities for efficiency and creativity in design processes. Graphic designers should adapt to these technological advances to remain competitive and innovative in their field.

Among new skills you can find:

• Graphic design software
• AI literacy
• Technical proficiency with design software
• Color theory
• Sustainable design

Computer programming

While programming is a creative and complex task, aspects of code generation and testing could be augmented or automated by GenAI.

For example, the data engineer job has seen steady job growth, with demand increasing by 3% over the past 12 months, and is ranked 159th out of 284 in-demand IT jobs. Hiring is balanced, ranking 150th fastest in the IT sector, while skills requirements remain stable, indicating continued job complexity and the need for digital skills. Salaries for data engineers are high, ranking 77th out of 284 IT roles, reflecting the significant value and experience these professionals bring to managing large volumes of data.

Among new skills you can find:

• Data warehouse
• Big data
• Cloud Computing
• Data governance
• Data integration

HR

Human resources roles may transform completely, with GenAI automating routine tasks and reorienting HR professionals towards more strategic functions.

For example, the HR director has a 26% increase in demand over the last 12 months; the position ranks 27th out of 50 in the HR job group with the highest demand and 29th in the fastest hiring speed with an average time to hire of 28 days — a 49% decrease than last year. Despite the changing dynamics of the workplace, the skill set for HR directors has remained relatively stable, changing only 11% over the past year, highlighting the steady complexity of the job and the demand for digital skills. Ranked 4th out of 50 in the HR profession family, the high salary reflects the significant value that HR directors bring to their organizations.

Among new skills you can find:

• Employee Performance Management System
• HR analytics
• HR software
• Data interpretation
• AI-driven recruiting

Below, we focus more on the varying degrees of impact of AI on the workforce, distinguishing between strong, low, and moderate impacts on different job categories, particularly how AI can create a labor surplus in some areas while mitigating shortages in others.

The McKinsey report on the impact of GenAI on the German labor market highlights several key insights:

• Skilled labor shortages. Germany faces significant skilled labor shortages, exacerbated by a 5-fold increase in businesses reporting such shortages since 2009. Open positions have quadrupled between 2004 and 2022.
• GenAI’s role. GenAI is a pivotal solution, offering substantial productivity potential in manufacturing, workforce training, healthcare, business, legal, and STEM sectors. It promises to mitigate labor shortages by enhancing efficiency and innovation.
• Education and wages. The report identifies education (especially tertiary and high school levels) and high-wage areas as having the highest potential for labor shortage mitigation through GenAI adoption.
• Upskilling and talent attraction. Emphasizing the importance of upskilling and attracting the right tech talent is crucial for the public and private sectors to leverage GenAI effectively.
• Germany’s GenAI sphere. Germany has a promising marketplace for GenAI adoption, boasting many GenAI startups and a significant presence in computing power, academic publications, and patents, which positions it well for leadership in Europe.
• Operational and skill requirements. The success of GenAI adoption in mitigating labor shortages hinges on creating the right operating environment and ensuring the availability of necessary skills within the workforce.

Besides Germany, there is particular interest and demand for GenAI and ChatGPT-related roles in countries such as the United States and India, highlighting the gradual integration of this technology into the global labor market.

AI requires a closer look at how businesses and sectors can manage these changes. By leveraging benchmarking data, organizations can gain valuable insight into the dynamics of changing job roles, enabling them to make informed decisions about talent management, reskilling initiatives, and hiring strategies. Let’s look at how GenAI is changing the workforce, highlighting the importance of human skills in roles less affected by automation and the continued need for professionals in fields where AI enhances, not replaces, human experience.

In areas where GenAI has a high impact, there’s a noticeable creation of labor surplus. Professions like:

• Business and financial analysts
• Office and administrative support staff
• Web developers
• University professors
• Economists
• Writers
• Editors
• Journalists are experiencing a shift.

AI’s ability to automate complex tasks and analyze large datasets supplements human capabilities, reducing the need for HR in these roles. Benchmarking data on the time it takes to fill these positions can guide businesses in anticipating surpluses and planning for reskilling programs to redeploy talent where it’s needed most.

Mitigating shortages in specialized roles

Conversely, GenAI also mitigates labor shortages in certain specialized fields, such as information security, speech-language pathology, law, actuarial science, and data science.

Here, benchmarking data can help organizations understand the urgency of filling these roles and the competitive opportunity of the job market, ensuring that they allocate appropriate resources to attract and retain top talent.

Human skills remain indispensable in roles where AI has had a low impact.

• Construction workers
• Repair technicians
• Laundry and dry-cleaning workers
• Sewing machine operators.

These professions are insulated from AI effects primarily because they require manual dexterity, physical presence, or skills that AI cannot replicate. Despite the low impact of AI, these areas may still face labor shortages because of other factors, such as an aging workforce or lack of interest among younger generations. Precise benchmarking data is crucial for pinpointing shortages and developing targeted recruitment strategies.

Persistent shortages in essential services

• Healthcare practitioners
• Support staff
• Skilled tradespeople
• Social workers
• Childcare workers.

These professions remain in high demand, with shortages persisting despite technological advances. These roles often require high emotional intelligence, empathy, and human touch — attributes AI cannot fulfill. Accurate, role-specific, and location-specific benchmarking data for time to fill these positions can provide insights into the severity of shortages and help health services and other sectors prioritize recruitment and training initiatives.

The strategic planning for workforce development, identifying where AI can be leveraged to address labor shortages, and where human workers are still crucially needed. It also highlights the potential impact of AI on employment and the labor market, showing which sectors might see job reductions or require fewer new entrants due to AI adoption.

The crux of smartLibrary’s utility lies in its ability to provide a forward-looking analysis of profile evolution. As AI reshapes job functions, smartLibrary helps organizations anticipate how profiles will evolve and determine the upskilling needs of their workforce. It answers critical questions such as the potential for automation and where the biggest savings can be realized without compromising efficiency or quality.

smartLibrary is a database that stores a collection of jobs, skills, and training. It is a large and constantly updated library, making it a dynamic, market-driven source of information. All job, skills, and training records are cataloged and managed here.

The job standardization process allows for clear communication of job titles and responsibilities and having a single title for the same positions. Adding skills to a job in smartLibrary allows you to map the responsibilities of each position accurately. In turn, the educational library offers a rich selection of various training for smartPeople users.

In strategic workforce planning (SWP), smartLibrary provides organizations with the means to plan effectively using a common jobs and skills language. This shared lexicon facilitates better communication and alignment within the organization regarding workforce needs and strategies. Companies can use smartLibrary to:

• Analyze the company’s potential evolution of job roles, considering AI’s high or low impact.
• Identify upskilling needs to transform labor surpluses into productive assets.
• Locate areas where AI can mitigate labor shortages and align training programs accordingly.
• Assess the cost-effectiveness of different recruitment strategies in the context of AI’s influence on the labor market.

Integrating smartLibrary with benchmarking data for enhanced decision-making

When combined with accurate benchmarking data that provides time-to-fill metrics at a micro-level, smartLibrary’s insights become even more actionable. Organizations can predict how roles will change and how long it will take to fill these evolving roles in various locations. This integration allows for a comprehensive understanding of labor market dynamics’ qualitative and quantitative aspects.