At the start of 2023, the public release of ChatGPT and the copyright controversies surrounding the Artificial Intelligence (A.I.) image generator, Midjourney, caused a hysterical uproar on the internet. However, for most people, it was clear that this presented enormous new opportunities for businesses and economies worldwide. The age of A.I. will have an exciting and significant impact on the world, causing massive disruptions in the Age of Information similar to the upheaval during the Industrial Revolution.
The offshoring industry must prepare for the impact A.I. technologies will have. These new technologies can significantly reduce the need for human labor, which may decrease the number of jobs that can and need to be offshored. Employers must train and upskill their workforce to remain competitive in the age of A.I. A.I. technology is expected to return at least 16% of all jobs in less than half a decade in the U.S. alone. The McKinsey Global Institute has predicted A.I., and automation could eliminate as many as 800 million jobs worldwide by 2030 but could also create nearly 375 million jobs.
From Google’s search algorithm to self-driving cars, many technologies used today already use some form of machine learning model. There were many chatbots created well before ChatGPT came onto the scene. ChatGPT’s ability to develop well-written and correct content and code at incredible speeds has set it apart from its predecessors. Unlike earlier chatbot models akin to clever, entertaining toys, the A.I. tools available today can be used in professional settings to boost productivity significantly. While before, A.I. technology could only automate routine and menial tasks, the capabilities displayed by these new versions have exposed some non-routine tasks to the possibility of automation. Many individuals have already shown A.I.’s ability to craft high-quality marketing content, summarize reports, create usable code bases, and make correct business communications.
Today, 9 out of 10 organizations believe that using A.I. technology will give them an edge over their competitors. And the numbers are predicted to only go higher, with A.I. adoption expected to grow with a CAGR of 38.1 % between 2023 to 2030.
The Widespread Impact on Global Employment and Offshoring
A.I. and automation technologies can significantly reduce the need for human labor. Some experts believe this will decrease the number of jobs that can and need to be offshored.
Consequently, this has reignited the age-old fear of being made redundant and replaced by machines. These concerns are justified. According to Forrester, A.I. technology is expected to return at least 16% of all jobs in less than half a decade in the U.S. alone.
Hope in History
These fears are not new, as pointed out by history. In 1811, these same fears were manifested by Luddites, textile workers who protested against automation and the machines robbing them of their livelihood. In the 1980s, we saw the same fear manifest again during “computerphobia” when the desktop computers we know today became increasingly ubiquitous in the workplace.
Despite the fears and concerns, both periods in history were followed by the same result: the technological shift created more jobs than eliminated. Even when specific jobs become more manageable, cheaper, and quicker, businesses will still need people to handle the functions that have yet to be automated or to check the part where A.I. was integrated. The overflow of production in one part required the support of new hands to keep the systems and processes moving.
What Industries and Professions Are Most at Risk of A.I. Automation?
Now that some people reading this may have been partially relieved, we must still address the concern that some jobs will inevitably be lost.
Going back to the McKinsey study mentioned above, the need for many physical jobs in predictable environments will likely be significantly reduced, such as fast-food service and machine operations. And while the statistics may vary between countries and their economies, many office support roles are in danger of redundancy as well. Data collection and analysis, paralegal work, low-level accounting, back-office transaction processing, and other similar functions are highly susceptible to automation as these activities become increasingly more accessible with machines.
As companies automate specific tasks and processes, the jobs most at risk involve repetitive, routine, or predictable activities that machines can easily replicate. This may mean that offshore employees may have to compete with less-expensive, more efficient machines for the same job.
A.I. and automation may reduce the need for some jobs. However, they also create new opportunities in other areas. It’s also possible that people in the previously mentioned professions are given new tasks. Employees may need to be upskilled and adapt to new job functions and roles to remain competitive and valuable in the marketplace. This can be daunting, as not all employees may have the means or capabilities to retrain themselves.
Moreover, employers’ lack of proper re-skilling initiatives might also lead to a high unemployment rate, negatively affecting the economy.
With the increasing adoption of A.I. and automation, there will be a growing need for experts in these fields, which could lead to increased jobs in software development and information technology.
Professions that require people management and social interactions, as well as physical jobs in unpredictable environments like gardening, plumbing, and elderly care, are unlikely to be automated in the same time frame. These jobs are incredibly complex and technically much more challenging to automate.
Automation will inevitably replace many specific professional tasks that humans currently do. The job is not to protect occupations that computers can do better but to train the workforce for future work. The key to succeeding in the age of A.I. is to train and upskill people in this new environment.
The primary motivation for companies to offshore has always been to save costs on labor. But with the looming possibility of simply automating commonly offshored tasks, will offshoring still be in a company’s growth strategy?
Two possibilities immediately come to mind when discussing the impact of A.I. technologies on the offshoring industry. Fewer jobs are offshored because providing A.I. productivity tools to your current departments and team becomes cheaper. Or two, offshoring roles become more productive with A.I. tools and thus more competitive.
With A.I. productivity tools being widely accessible to the public, there’s a high possibility that companies can now assemble smaller, more highly productive teams for still a fraction of what it would cost to employ a locally hired team.
Despite the challenges, offshoring will continue to be an essential strategy for companies looking to reduce costs and gain access to talent. According to a report by Deloitte, global outsourcing will continue to grow at a steady rate. Additionally, many experts believe that A.I. and automation technologies will ultimately create new opportunities for offshoring rather than dropping it altogether.
What New A.I. Technologies Mean for Employers and Employees
The effects of A.I. on employers and employees are an essential aspect to consider when discussing the future of offshoring in the age of A.I.
From the perspective of employers, A.I., and automation technologies can provide significant benefits in terms of cost savings, improved efficiency, and increased productivity. Companies can reduce labor costs and increase output by automating specific tasks and processes. A.I. can also be used to analyze large amounts of data, which can help companies make more informed decisions and improve their operations. Additionally, A.I. can enhance customer service and improve the overall customer experience.
However, A.I. and automation can also have adverse effects on employers. One of the biggest concerns is the potential for job losses as automation replaces human workers. This trend may particularly affect companies that rely heavily on offshored labor. Employers will also have to invest time and resources in training and re-skilling employees whom A.I. and automation may have displaced.
From the perspective of employees, A.I., and automation can have both positive and negative effects. On the one hand, A.I. and automation can free employees from repetitive and tedious tasks, allowing them to focus on more creative and high-value activities. Additionally, A.I. can provide employees with new tools and technologies to help them be more productive and efficient.
It will not be that workers are replaced by A.I.; it’s more likely that they’ll be replaced by workers who can skillfully use A.I.
In conclusion, the future of offshoring in the age of A.I. is complex and uncertain. While A.I. and automation technologies can provide significant benefits to employers in terms of cost savings and improved efficiency, they also have the potential to lead to job losses and reduced job security for employees. Employers will have to address these challenges by investing in training and re-skilling programs, which can help employees adapt to new job functions and roles in the age of A.I.
The offshoring industry will likely continue to evolve and adapt. While A.I. and automation may reduce the need for some types of offshore jobs, they may also create new opportunities for offshoring in other areas. Offshoring providers can gain a massive advantage by training highly productive employees who can use A.I. tools to contribute and add more value to whatever company they’re assigned to.
iSupport Worldwide: Your Future-Driven Offshoring Solutions Provider
iSupport Worldwide is a leading offshoring solutions provider with a base of operations in the Philippines. We help companies acquire top-level talent, provide access to state-of-the-art facilities, and implement high-value training programs.
With 17 years of experience serving clients all around the globe, we are a veteran firm that has helped hundreds of clients build and develop their teams. In the age of the A.I. revolution, it is paramount that your company can optimally grow with top-tier employees who can adapt to these rapid changes.
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