Resources | Market Trends | May 31, 2024

Worried About Worker Shortages, Business Leaders Are Optimistic About AI’s Impact on Hiring

Using AI tools to boost productivity could ease the need to add staff.

Boosting productivity could ease the need to add staff.

As ChatGPT and a wave of other user-friendly AI tools have entered the marketplace, more and more people are asking what artificial intelligence could mean for companies and their employees.  

As part of this year’s Working Capital Survey, C2FO asked more than 1,000 business leaders about their views on AI. Did they think it was going to help or hinder growth at their companies?

54 percent of surveyed business leaders said they expect a positive impact from artificial intelligence this year, according to C2FO's Working Capital Survey for 2024.

Roughly 54% said they expect AI to have a positive impact on their businesses this year. That’s compared to the 12% who expect negative results and the 35% who predict it won’t have any effect. 

In fact, no other topic on the survey list was viewed more positively than AI. That was true for 2023, too — 50% of respondents in this year’s survey said AI benefited them last year. 

And despite fears to the contrary, it doesn’t look like companies are racing to replace human beings with AI, either. 

Some are, of course. About 18% of all respondents said they plan to replace some workers with AI. 

But the largest group — 54% — instead is planning to use AI to augment and support their existing workforce. About 3% are going to use it in other ways, while 19% won’t employ the technology at all. 

Can we ease worker shortages with AI?

Business leaders may be optimistic about AI because it could help them solve another problem: worker shortages.

About 49% of Working Capital Survey respondents expect a lack of workers will have a negative impact on their company’s growth in 2024. It was the No. 3 most-cited threat in this year’s survey. 

A related concern, wage increases, was cited by 35% of those surveyed. 

And there really is a need for more workers. In May, there were 8.5 million job openings in the US, but only 6.5 million unemployed workers, the US Chamber of Commerce reported.

The theory is that artificial intelligence could make current employees more productive, reducing the need to hire additional workers. 

So, does AI actually increase worker performance? 

A recent study from researchers at Harvard Business School, the Wharton School, Warwick Business School and MIT Sloan found that generative AI can boost productivity for highly skilled workers by as much as 40%, but only if it’s used “within the boundary of its capabilities.” 

Ask AI to do something that it’s bad at, and you could actually lower productivity by 19 percentage points. That could be a problem because the workers in the study didn’t always know what tasks were a good fit for AI. 

Benefits for high and low performers

Another study — this one from the National Bureau of Economic Research — looked at what happened when customer service reps at a Fortune 500 software firm were given access to an AI chat tool.  

On average, workers were 14% more productive if they had access to the tool, compared to those who didn’t. Productivity gains were even bigger — up to 35% — for the least-skilled, least-experienced employees.

As experts at Stanford University noted, that’s a huge improvement. Many companies are happy to see gains of 1% or 2% when they adopt a new piece of technology. 

The study’s AI tool monitored the company’s top-performing customer reps and, based on their results, used that info to coach less-skilled workers, which experts found interesting for two reasons. 

Technology has tended to benefit higher-skilled workers, but in this case, it helped level up lower-performing staffers. However, there was also a measure of protection for high-performing workers, too: They were the models used by the AI to teach the other workers.

The bottom line about AI and worker shortages 

Business leaders tend to be more optimistic about AI’s potential because they hope it can help solve a big and ongoing problem. Namely, it’s really hard to find workers right now. 

Funding larger experiments in AI, especially custom implementations, could require more working capital. Businesses can find the funding for that work by accelerating payments on their outstanding invoices — learn how C2FO can help here.

Download your copy of the 2024 Working Capital Survey here.

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