When it comes to job cuts, older workers are often disproportionately affected. But a new survey of chief executive officers suggests this won’t be a given as companies adopt artificial intelligence.
More than 40% of CEOs plan to cut junior roles over the next one to two years and shift the composition of their workforce toward mid-level or senior positions, while only 17% plan to make junior roles a bigger part of the mix, according to a global survey by Oliver Wyman. The numbers are essentially flipped from just a year ago.
“I think the junior level is definitely finding it harder now to enter the workforce,” said John Romeo, who leads the consulting firm’s research arm, the Oliver Wyman Forum. “It’s those mid- and senior-level employees that CEOs are now looking at to drive productivity.”
That’s because of the types of tasks that AI agents are able to perform, from writing code at the level of a junior developer to evaluating sales leads. What the agents can’t do in many fields is make judgment calls using the insight that comes from on-the-job experience, according to labor experts.
Companies are saying, “I need someone who’s actually done this before because her experience, her wisdom, her critical thinking and the fact that she solved these problems makes her much more valuable,” said consultant and lecturer Ravin Jesuthasan, who has written multiple books on the future of work.
The Oliver Wyman survey results build on findings from a Harvard University study showing that firms adopting generative AI have significantly reduced junior-level positions, while keeping senior employment largely stable. Foregoing younger talent now in favor of AI agents comes with significant risks, though, as it may leave companies with a shortage of experienced workers in the future, according to Helen Leis, global head of leadership and change at Oliver Wyman.
To “have the mid-level people that can manage an agentic workforce, they need to learn the company and the job,” Leis said.
With that idea in mind, International Business Machines Corp. said in February that it plans to triple entry-level hiring in the US this year and will rewrite job descriptions for the AI era. IBM appears to be an outlier, though. A study from Stanford University in November found that young workers were 16% more likely to lose their jobs in the most AI-exposed fields.
But even if AI is tipping the scales in the job market toward older workers, it’s no guarantee of job security for them. “Firms’ commitment to workers is weaker and weaker,” said Teresa Ghilarducci, a labor economist at the New School.
Recent trends indicate that older workers may no longer be the most vulnerable demographic in the face of job cuts, particularly as companies increasingly turn to artificial intelligence (AI) to reshape their workforce. A new survey conducted by Oliver Wyman reveals a significant shift in hiring strategies among chief executive officers (CEOs). Over 40% of CEOs plan to reduce junior roles in the next one to two years, favoring mid-level and senior positions, while only 17% intend to increase the proportion of junior roles. This marks a dramatic reversal from sentiments expressed just a year ago.
John Romeo, who leads research at the Oliver Wyman Forum, emphasizes that younger workers, particularly those at the junior level, are finding it increasingly challenging to enter the workforce. The demand for mid- and senior-level employees is growing as companies seek individuals who can enhance productivity through their experience. AI technologies are now capable of performing many tasks traditionally assigned to junior employees, such as coding or evaluating sales leads. However, they lack the capacity for nuanced judgment based on experience, which is becoming a crucial factor in hiring decisions.
Ravin Jesuthasan, a consultant and lecturer, stresses the value of experience in the workplace. He argues that companies are recognizing the importance of hiring individuals with a proven track record who possess the critical thinking skills necessary to solve complex problems. This perspective is supported by findings from a Harvard University study, which indicates that organizations implementing generative AI have significantly reduced junior-level positions while maintaining senior employment levels.
Despite the apparent preference for experienced workers, this shift could pose risks for companies in the long term. Helen Leis, global head of leadership and change at Oliver Wyman, warns that relying heavily on AI and sidelining younger talent could lead to a shortage of experienced workers in the future. For mid-level employees to effectively manage an AI-driven workforce, they must first gain a deep understanding of their roles and the company’s operations.
In a notable exception to the trend, International Business Machines Corp. (IBM) announced plans to increase entry-level hiring in the US, aiming to triple the number of new hires in that category this year. The company also intends to revise job descriptions to align with the demands of the AI era. However, a study from Stanford University indicates that young workers are still at a heightened risk of job loss, particularly in sectors most exposed to AI, where they are 16% more likely to be affected.
While the emergence of AI may be shifting job market dynamics in favor of older workers, it does not guarantee their job security. Labor economist Teresa Ghilarducci points out that companies’ commitments to their employees are becoming increasingly tenuous. This evolving landscape highlights the complexities of workforce management in the age of AI and the need for companies to find a balance between leveraging technology and nurturing talent across all levels of experience.
In summary, the impact of AI on employment is multifaceted, with older workers potentially benefiting in the short term, but long-term implications could leave organizations vulnerable. As companies navigate these changes, the importance of experience and critical thinking in the workplace will remain paramount, necessitating a careful approach to workforce planning and talent development.
