How AI and emerging technologies are shaping the UK job market

Blog posts

1 Oct 2024

The advancements in the pursuit of Ai have brought in the market new tools that have the potential to automate not only mundane tasks of routine or semi-routine jobs, but also more creative tasks that had been previously exclusive to humans, such as creative writing, music, and painting, among others. Yet, it remains to be seen if Ai, along with a myriad of smart systems that it supports, will become a force that enhances or replaces human jobs. The tech industry estimates that machine-to-machine connections has become the fastest growing segment of the internet, accounting for almost half of all internet connections.

In a highly cited 2013 article by Carl B. Frey and Michael Osborne of the Oxford Martin School, the authors find that the occupations with the highest risk of computerisation are in the service sector, sales and related activities, office administration support roles, transportation & material moving, and production. On other hand, they find that occupations in education, health care, and the arts, have a lower risk of computerisation. As the Fourth Industrial revolution unfolds, robots and smart systems will continue to become smarter and more capable at performing tasks that were previously thought impossible.

While the discussion about the pessimistic fear of human-jobs replacement or the optimistic hope of human-jobs enhancement is ongoing, there is little doubt that the market for jobs will experience a period of great uncertainty. If history can be a guide, then it is very likely that the demand for new skills and new jobs will grow faster than the time it takes to train the labour force to meet the emerging employer demands. In fact, the UK government estimates that between 2017 and 2022 skills shortages in the UK doubled to more than half a million, and now account for 36% of job vacancies. An Institute for Employment (IES) analysis of the UK labour market latest data, highlight that there between Jully 2023 and Jully 2024 the number of people out of work increased by half a million, driven mostly by more people outside of the labour force entirely. The OECD Skills-need data show that the UK needs more ‘digital skills’. However, the topmost Skills-need fall under the ‘training and education’ category, with medicine, and scientific knowledge in the second and third position respectively.

One can find examples of the time lag between old jobs/skills becoming redundant and new jobs/skills becoming necessary in every previous industrial revolution: the spinning machines and the weaving machines, the steam engine and the electric engine, the stenographer and the sound recorder, the typewriter and the PC. Now we have the graphic designer and DALL-E. However, in many cases new technologies transform the nature of industries in fundamental ways, such as the publishing industry for example, which has gone from writing/copying text by hand for the most part of human history up to late-19^th century, to the use of typewriters up to mid-20th century, then to phototypesetting and laser printing from mid-20th century to early 21^st century, then to nowadays mostly digital printing using computer-software. One can see that throughout the centuries some skills become -largely- redundant (hand calligraphy), other traditional skills find new applications (typing), and new skills that grow in demand (software engineer).

Employer demands for skills and expertise will shift with the seasons, creating new job roles in organisations. Using the Adzuna intelligence portal we can access information about the demand for job-roles in the UK. Hence, by looking at the information of job-offerings we can identify trends in the demand for occupations and have a glimpse of what the future may have in stock.

The histogram below presents the cumulative number of job offerings in the 3 most recent years with a cumulative number of job offerings of 50,000 or more. The histogram shows that for at least the past 3 years that we analyse, the top in-demand occupation has been ‘Programmers and software development professionals’. This is hardly a surprise, since almost everything runs on software since the advent of Web 2.0, and software requires programming. We also find ‘Chefs’ (the lack of kitchen staff in the aftermath of Brexit and Covid-19 pandemic was capturing headlines in 2021), and ‘Business and financial project management professionals’, along with several categories among the most popular in-demand occupations, which do not show due to the limited space on the diagram, such as ‘Social workers’, ‘Sales and retail assistants’, ‘Book-keepers payroll managers and wages clerks’, ‘Other administrative occupations n.e.c.’, and ‘Secondary education teaching professionals’. One thing that is clear from the pareto histogram below, is that a small number of no more than 20 occupations, accounts for the significant share of the distribution.

It follows then that the next interesting thing we want to check is if the demand for the occupations with the highest number of cumulative job-offerings over the 3 most recent years has changed, and if it has, in what way. We proceed to plot the quarterly data of the Top 10 in-demand occupations from 2022:Q2 to 2024:Q2. There is an evident downward trend in large majority of these occupations. The only occupation among the top in-demand occupational categories which shows a positive trend is ‘Secondary education teaching professionals’ (see chart below). It might be the case that in the aftermath of Brexit and the Covid-19 pandemic employers were anxious to restart, hence keen to secure as many employees they could, as soon as possible. Arguably, there may have been a certain level of irrational exuberance in the job offerings. Nevertheless, even that was the case in the early months after Brexit, or Covid-19, the trend has kept its downward path in most cases (notice trend after 2023:Q2 in the chart).

In a blog originally published on @adzuna, @Nlitsardopoulos examines the rapid rise in Ai technology, its impact on jobs and the job market, and how it fits into the historical context of ever-changing work and employment patterns. Read more: bit.ly/47LL7ZN It is reasonable then to examine which occupations have increased or decreased the most, and by how much. We perform this exercise by calculating the difference in the number of job offerings between the start and end of the period we examine, that is the second quarter of the 2022 fiscal year and the respective quarter of 2024. The job offerings data reveals a rather alarming situation in the demand for jobs in the past 3 years. Looking at the top 10 occupations with the highest or lowest difference, we see what can only be described as a collapse in the demand for jobs (see chart below).  

What we see from the data is that out of the 402 occupations identified there were a mere 33 occupations for which the number of job offerings increased. That accounts for 8.2 percent of all occupations. That means that a staggering 91.8 percent of the 402 occupations saw a decrease over the past 3 years. What is more, the overall demand for the few occupations that saw an increase in their job postings is far lower than the overall demand for the few occupations that saw a decrease. Interestingly, amongst the top 10 of the occupations that saw an increased demand, there are 6 that are directly associated with teaching and education below the tertiary level. This may well be directly linked with the effort to bridge the gap between the skills employers demand, and the insufficient current supply of those skills. The remainder 4 in-demand occupations are ‘Coffee shop workers’, ‘Postal workers mail sorters and messengers’, ‘Pharmaceutical technicians’, and ‘Other psychologists’. The in-demand occupations Yet, altogether the growth in these occupations, does not even compensate for the smallest decrease among the occupations that have experienced a decrease.

Looking at the details of the occupations with the largest decrease in their job offerings, there is also a theme emerging from the data. It seems several of these occupations are business roles associated with sales and marketing , such as  ‘Sales and retail assistants’, ‘Sales accounts and business development managers’, and ‘Advertising and marketing associate professionals’, or generic jobs in business administration, such as ‘Human resources and industrial relations officers’, ‘Business and financial project management professionals’, and ‘Other administrative occupations n.e.c.’. The data seem to confirm in some respect the 2013 analysis of Frey & Osborn about which jobs are susceptible to computerisation.

It may be that the jobs market is still experiencing the reverberation from Brexit, and/or due to some cooling effect from the irrational exuberance of hirings during the early months of the post-pandemic period. Nevertheless, it may well be the fallings costs of system automation which have made such systems financially accessible to even the smallest enterprise. As a result, fewer employees are needed to manage the day-to-day business operations. It is also possible that the use and implementation of Ai is enhancing the performance of employees to the point that fewer employees are needed to do the same work. As the digital transformation of businesses keeps encompassing increasingly more aspects of business and trade, the more likely it is that several job-roles will not be necessary any longer, not unlike the fate of telegraphers and stenographers. Brick and mortar businesses are giving way to digital enterprises that run a tighter business with lower costs and higher per-employee profit.

Proponents of new technologies may have correctly argued back in the early days of the laser printer that a laser-printer could do the work of a small army of typists. However, a few decades later hardly anyone prints anything (apart from certain agencies that still have a paper-printing culture of -scripta manent-). So, while new technologies may enhance the task performance of humans, as well as replace them to a large extend, it is also true that new technologies replace older technologies. Therefore, new technologies do not only upset people and jobs/skills, they also shake-up markets and industries altogether in a continued effort to overcome human challenges and achieve an ever higher performance: Citius - Altius - Fortius. 

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.