If the past two and a half years have taught us anything when it comes to our lives, it is to expect the unexpected. However, with the advent of technology, specifically machine learning and artificial intelligence (AI), you could argue that we, as a society, are failing to anticipate and, plan for many societal and economic trends that we know are coming down the line.
While concerns mount around the current economic climate, the prospect of a recession and the impact on job security, another potential threat is looming on the horizon to which the UK workforce will need to respond. More than 10 million UK workers are at high risk of being replaced by robots within 15 years as the automation of routine tasks gather pace in a new machine age.[i]
Business AI advances cause fears of unemployment
A report by PwC found that 30% of jobs in Britain are potentially under threat from breakthroughs in AI by 2030. In some sectors half the jobs could go.[i]
This poses a significant risk to the financial future of UK adults. By these estimations, it is believed just under one in three of us could face a period of unemployment by 2030 as a result of advances in technology.
Worryingly, there are signs that this job loss could disproportionately affect older workers. Our research shows that the average age of redundancy currently sits at 51.[ii] If this trend continues, into 2040, then those in this age group need to be thinking ahead and planning for the financial challenges they may encounter as this new economy takes hold.
More so than ever, employees will need savings that can act as a buffer to support them during periods of financial uncertainty, while setting aside money that could fund their upskilling to improve their employability.
While a large focus on skills will be centred upon digital and tech, it is important not to lose sight of the importance of ‘soft skills’ in this increasingly digitised environment too, such as communication, empathy and emotional intelligence, skills which older generations will have spent decades honing.
Evolving businesses: do you have the skills?
Manual and routine tasks are more susceptible to automation, while social skills are relatively less automatable. But no industry is entirely immune from the future advances in robotics and AI.
While there is no doubt that AI technology is capable of handling many standard accounting tasks faster and more efficiently or that these capabilities will only increase over time, it doesn’t necessarily mean the end. Take accountancy, for example, there will always be a need for that human element – human intelligence – at the other end of AI technology.
In fact, advanced technologies such as AI and machine learning provide immense opportunities for accountants, rather than replacing human roles. These ground-breaking technologies will empower accountants and help them make informed data-driven decisions.
Law firms may reap the benefits too, with new and innovative ways of running a legal firm. This could include less non fee-earning staff, less need to be physically present in an office all day, and increased use of technology to provide services at times and in ways that are more convenient for clients.
Automating more manual and repetitive tasks will eliminate some existing jobs but could also enable some workers to focus on higher value, more rewarding and creative work.
Here are some of the skills the current workforce and workforce of tomorrow should be prioritising in order to future proof their careers and build long-term job security:
- Emotional intelligence
- Creative or critical thinking
- Decision making
- Adaptability when it comes to tech
Lifelong learning is an imperative
Future disruption to the job market caused by the automation of cognitive skills means that lifelong learning will become key to ensuring technology creates opportunities and not unemployment.
Businesses and employees of the future
According to research firm Gartner, AI is set to create more jobs than it will replace[i], however, to capitalise on these new job roles a different mind-set needs to be created, one that focuses on life-long learning.
Gone will be the days where we study and qualify for our careers in our early 20s. Education will be a continuous process against this backdrop. Continuing education will therefore become an ongoing, integral part of peoples’ working lives. In a world where an estimated 85 per cent of the jobs that will exist in 2030 haven’t even been invented yet,[ii] the only way people can prepare for the future is to be as cognitively flexible as possible, open to new ideas and challenges and willing to learn new things and develop new skills throughout their lives.
What will the jobs of 2040 look like?
The Centre for Future Studies has identified what some jobs of the future could be.
Space tech ground crews
Space X is causing industry experts to rethink timetables for the entire space industry. By 2040, we will have already begun to colonise Mars and space tourism rocket launches will be a daily occurrence. Similar to the airline industry, every launch will require a large cast of people employed in hundreds of different roles.
DNA, biohacking, and programmable healthcare gurus
By 2040 we will be able to programme our way to better health and genetically cure most diseases. Most people will be wearing a huge range of sensors offering real-time monitoring. Gene therapy, stem cell and nano-scale medicine will transform healthcare.
Quantum tech gurus
By 2040 we will have made the transition from bits and bytes to qubits. Qubits are the standard units used to measure quantum information. With quantum computing, all traditional encryption systems become hackable and all users will have been forced to upgrade to quantum level encryption long before 2040.
Drone command crews
By 2040, large fleets of drones will be very common, as we will have surpassed the first billion-drone mark in the early 2030s. Drones will come in every possible shape and size. There will be many drone-related positions created for monitoring payloads, systems and optimizing traffic flow.
The future of business: how to protect financial and job security?
A shift towards automation will have a profound effect across our working lives.
The clearest repercussions of automation have already begun to effect industries such as manufacturing, warehousing, and production, but new research reveals that 2.25 million jobs in the UK are under threat.[i] This fundamental change to how we work could lead to some people facing a future without a job in the years to come if they do not upskill to the requirements of tomorrow.
While there are typical associations with automation affecting lower skilled roles, over the next 20 years we will see its effect on the professional industries too. The legal, tech and financial sectors will be made more efficient through automated processes which will impact the popular job roles businesses require today, such as accountants and auditors.
While technology is predicted to generate more jobs than it will replace, giving rise to new job types as the economy shifts and adapts to these technologies, this transition won’t be immediate and there will be a period of upheaval.
Prepare for a shift in the corporate landscape
Individuals therefore need to recognise this risk and plan accordingly for the upheaval which automation will bring. Older generations of workers are familiar with preparing for redundancies in the context of an emerging recession, but technological advancements now possess a significant threat to our jobs and financial security. With this transformation looming, employees should be thinking about establishing savings that can act as a safety net should they find themselves in a period without work as we transition to this new economy.
While the government is well aware of the UK workforce’s need for a great reskilling along with a shift to a lifelong approach to learning, it is unclear how this reskilling and learning will be funded. Government and employers may support; however we should also be preparing for some of this financial cost to fall on ourselves. Along with savings to support periods where we might not have employment, it’s wise for us to be saving into a ‘skills fund’ that could help fund any reskilling that might be needed to ensure we remain employable in the future and shore up our job security.
Are you prepared for the future?
Evelyn Partners is here to help. Our financial planners can work with you to map out your current and future financial needs, help you make decisions about how best to use the assets you have and prepare for a rapidly changing future.
This article is solely for information purposes and is not intended to be and should not be construed as investment advice. Whilst considerable care has been taken to ensure the information contained within this article is accurate and up to date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information.