Artificial Intelligence Should Raise Job Values

A new McKinsey report suggests that automated systems can take over many of the rote functions performed by human beings. That should mean more money for people. Without the anvil-dragging effect of paying human beings for performing easily programmable activities, job values for the more complex brain-work should skyrocket.

Robots may become your friends, taking over your little minor tasks while granting you greater freedom to focus on the more valuable vital major responsibilities of your occupation. A lot of simple activities that currently interfere with the imaginative productive applications of organic intelligence could be assigned to machines, leaving the most important tasks for people. Let intelligent systems administer forms, handle routine questionnaires and issue reports. Basic diagnostic tests now performed by analysts, doctors, consultants and executives can be automated. Distilled results can then be swiftly electronically analyzed, assessed and diagnosed, with exceptions referred to a human agent.

Think about it.

• No more fretting about nonessential but nagging details.
• Freed to tackle challenges that really require judgment.
• Less of the little fiddly-bits tasks that are annoying distractions.
• Concentrate on the essential core elements of responsibility.
• Just monitor the automated routine minutiae.
• Focus on the vital aspects of your work.

Eliminating activities that can be reduced to checklists and formulas should raise the market rates for human work efforts. Just as technology revolutionized the construction industry, substituting powered equipment for the manual strength of work gangs, intelligent robots or automated programs can streamline the activities previously done only by people.

Wages should rise faster in occupations benefiting from modern technology. Operating engineers are paid much more to run equipment than manual laborers earn from the sweat of their backs; with the aid of efficient tools, more work gets done better and faster, too. Similarly, those who apply artificial intelligence tools will produce more, better and faster than the old ways permit. That should result in superior products, higher incomes and more satisfying working conditions.

Applying artificial intelligence (AI) to liberate and leverage human performance is inevitable. But all occupations will not be impacted equally.

Top executives will be more affected than groundskeepers, because more CEO activities could be automated than those of craft workers. Researchers estimate that 20% of a CEO's time would be saved by automating data summaries, computerizing analysis reports and applying artificial intelligence to other typically structured responsibilities. Overall, a full 13% of general American work tasks could be turned over to robots, according to the study. Only 5% of occupations might be completely put into robot hands … or handled by equivalent manipulators like Waldoes.

Very few jobs are expected to become totally automated. While file clerks may experience big changes, some service occupations like health care aides, maintenance workers and groundskeepers may be relatively unaffected by the expanded reach of artificial intelligence technology. Nothing can quite replace the effect of a human touch in personal interactions.

Robots and other AI applications can save time and effort, permitting people to do what only they can do best. Automation promises to give us greater efficiency in our efforts and more value from our productivity … if Murphy stays away, of course. 

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution. After corporate HR jobs in chemical and pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until returning to consulting in 2015. A prolific writer (author of the Performance Management Workbook) and speaker, Jim gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service and also serves on the Advisory Board of the Compensation and Benefits Review.

Image:  "HAL 9000" by Karl Tate, Courtesy of Creative Commons

Comments

[Jay Schuster]

Interesting. Gotta think that technology is dramatically reducing the number of 'overtime jobs' we will have. And that could be substantially accelerated by minimum wage legislation. Certainly places a premium on certain careers over others. Whenever I see people who are 'flipping burgers' protesting for higher pay I wonder if they realize that every extra dollar they are paid brings the work they do closer to disappearing?

I do suppose that 'artificial intelligence' is better than no 'intelligence' at all, huh???? I wonder if elevator operators believed their days were numbered? The 'ups and downs' of work life?

[E. James (Jim) Brennan]

Yep, we don't see blacksmiths sweating away with hammers and tongs either, Jay.

At the beginning of the 20th Century, there was a prediction that, "at this rate, the streets of NY City will be five feet deep in horse manure by 1925." Or something like that. Change is a universal constant but variable in intensity, usually occurring at a vector angle rather than in a straight line. I think.

[Jay Schuster]

I live in LA. We indeed believe that NYC is at least 20 feet deep in some sort of manure.

The academics constantly talk about 'artificial intelligence'. Perhaps that is why most tenured professors don't teach and they have a cadre of 'adjunct' instructors of all sorts.

I looked at the Mckinsey material. What do you suppose their 'angle' is on how they can make money from 'artificial intelligence'????

[E. James (Jim) Brennan]

Hired guns smell big bucks in functional re-engineering and job re-design consulting, I suspect.

My old article "Redesigning Work to Create More Mutual Value" (see the link in the story above) suggests that I saw this coming, but I'm not smart enough to accurately predict the future. You will notice the prior article drew from some things that you witnessed in the past, though, Jay. Hindsight is always 20-20, and certain behaviors repeated long enough always produce consequences that can be forseen.

[Jay Schuster]

Now I don't really believe I am an expert on how to profit from change but adapting to it has been the way we 'did our thing' for nearly 40 years. I don't see the relationship (for instance) between 'artificial intelligence' and the design of reward solutions (unless there is a way to reward whatever technology there is in 'artificial intelligence' but I don't see it).

The future of the reward business is getting ahead of the 'change power curve' and designing solutions organizations need to be a success. I know that the 'compensation business' is a 'stick-in-the-mud' affair but we have always found organizations with great leaders who believed effective rewards help them get and keep the best talent and encourage people to make work a 'win-win' between the organization and themselves.

To this end we were leaders in things like compensation choice-making, deep use of incentives, team rewards, paying for skill and competency, and total rewards that made sense. I just can't figure out what role 'artificial intelligence' plays in pay and reward design.

Help me out here, Jim. We are probably boring everyone to death.

[E. James (Jim) Brennan]

Nothing you ever say is boring, Jay. But maybe I can be boring, instead...

AI will affect work content, the nature of occupations, the KSAs required and their values as reflected in pay. Just like the way executive secretaries with steno skills got automated out of existence once they started demanding higher pay. Many other examples exist, too, but rewards pros tend to follow orders from above when execs become reluctant to pay for "unnecessary skills." AI will transform many occupations, creating completely new job output values to be addressed.

Comp people are rarely the ones with the powerful voices (or minds) who can craft the most effective mutually beneficial remuneration practices. Instead, it usually takes a "great leader" from outside our servant-sphere to command (or sponsor) that optimal organizational environment you describe.

I fear that your long intense involvement in incentives, team rewards, skill/competency pay, etc., makes you overlook how much chaos will ensue when "benchmark jobs" and traditional work functions have big hunks of content removed by AI. That new variable will affect almost every reward program. Traditional comp people will be like deer in the headlights, frozen without conventional precedent for guidance as "jobs" transform into totally different and frequently unique bundles of skills and competencies.

Without apples to apples standard "benchmark" comparisons, independent thought will be needed. Yikes! We face interesting times.

[ross]

That robots, automation, and software can replace people might seem obvious to anyone who’s worked in automotive manufacturing or as a travel agent. But Brynjolfsson and McAfee’s claim is more troubling and controversial. They believe that rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States. And, they suspect, something similar is happening in other technologically advanced countries.

It’s a startling assertion because it threatens the faith that many economists place in technological progress. Brynjolfsson and McAfee still believe that technology boosts productivity and makes societies wealthier, but they think that it can also have a dark side: technological progress is eliminating the need for many types of jobs and leaving the typical worker worse off than before. -Brynjolfsson can point to a second chart indicating that median income is failing to rise even as the gross domestic product soars. “It’s the great paradox of our era,” he says. “Productivity is at record levels, innovation has never been faster, and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren’t keeping up.”

https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/

[E. James (Jim) Brennan]

Excellent observation, Ross! You inspired almost a new blog article, while underlining my focus and answering Jay's question, too.

The McKinsey researchers nail my theme in their point #2: “...fewer than 5 percent of occupations can be entirely automated using current technology. However, about 60 percent of occupations could have 30 percent or more of their constituent activities automated. In other words, automation is likely to change the vast majority of occupations—at least to some degree—which will necessitate significant job redefinition and a transformation of business processes.

“Particularly in the highest-paid occupations, machines can augment human capabilities to a high degree, and amplify the value of expertise by increasing an individual’s work capacity and freeing the employee to focus on work of higher value.“

The key is in their point #3: “Conventional wisdom suggests that low-skill, low-wage activities on the front line are the ones most susceptible to automation. We’re now able to scrutinize this view using the comprehensive database of occupations we created as part of this research effort. It encompasses not only occupations, work activities, capabilities, and their automatability, but also the wages paid for each occupation.”

Although they seem to dispute the assumption that low-skill jobs will be most affected, please note that they only address the percentage of occupations affected. They do NOT deny that “labor savings” imply that many people will become unemployed due to the potential automation that would disproportionately affect higher-paid jobs (see Point #4 re implications): “Clearly, organizations and governments will need new ways of mitigating the human costs, including job losses and economic inequality, associated with the dislocation that takes place as companies separate activities that can be automated from the individuals who currently perform them.”

Here is the answer to Jay's question about how McKinsey expects to profit from this. By sounding the alarm and predicting a threat, the consultants can earn a lot of money solving the transformation challenges they predict: “Nor do we yet have a definitive perspective on the likely pace of transformation brought by workplace automation. Critical factors include the speed with which automation technologies are developed, adopted, and adapted, as well as the speed with which organization leaders grapple with the tricky business of redefining processes and roles.”

Great catch, Ross, because this also directly responds to Jay's question of how this affects compensation people. We will inherit the challenges of responding to the mess.

I totally agree with the Brynjolfsson/McAfee report. Beyond conventional industry applications, just look at how the military (mostly the Navy) has become automated with much less reliance on strong backs performing raw labor. Their Technology Review article is neither surprising nor controversial, IMHO, but important by its clarity. If productivity is to be decoupled from employment, the care and feeding of the fewer human resources engaged in the new types of work remaining for people will remain our concern.

Are we up to it?