[Real Beat] Productivity Up with AI, but... Boss from Hwaseong, Employee from Geumseong [Office Shift] (33)

Differences in Perspectives Between Executives and Employees Revealed by Survey
Executives Focus on Work Utilization, Employees Worry About Job Loss

Editor's Note[Jjinbit] is short for 'Jung Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in the changing nature of work. The segment within Jjinbit called 'Office Shift' closely examines the changes in offices triggered by the COVID-19 pandemic and aims to lay the groundwork for finding answers to new work styles through experiments we have conducted together. It will be delivered to you every Saturday or Sunday. After 40 installments, it will also be available as a book.

"The explosive popularity of generative artificial intelligence (AI), including ChatGPT, is creating a new order in business and society. There is a significant perception gap between top executives and frontline employees regarding AI, and companies need to bridge this gap."

Boston Consulting Group (BCG) advised this last month in a report titled 'What Do People Say About AI Used in the Workplace.' It is not easy for executives leading companies and frontline employees working on the ground to be aligned in their mindset. Since their authority and positions differ, their concerns also differ. The issue of using AI in our workplaces is no exception.

[Image source=Reuters Yonhap News]

This year, generative AI, which has shaken the world, is expected to transform work across the board. However, the impact and effects of AI on the economy remain unclear. Especially regarding its impact on jobs, discussions are still in the early stages. While there is significant concern that AI will take away jobs, there is also optimism that it will create new jobs, resulting in mixed forecasts.

In such a confusing situation, executives must decide how to introduce AI into work, and employees must learn the technology and apply it on-site to adjust the tasks they have been doing. Since work is undergoing major changes, proper communication between both parties is essential to relatively smoothly accept new technologies in the workplace. Now that AI is entering workplaces one after another, it is a crucial time to understand what each side is thinking.

We took a look at the thoughts of CEOs, i.e., executives, and frontline employees through several recent surveys related to AI and the workplace.

◆ CEOs and Employees Agree on "Boosting Productivity"

'Increasing productivity with AI' is the main focus for companies at this point. This is also where executives and frontline employees share similar views regarding AI.

According to a survey conducted by Microsoft (MS) in March, the top priority executives mentioned regarding AI was 'improving employee productivity' (31%, multiple responses). The second was 'helping employees with boring tasks' (29%), and fourth was 'eliminating unnecessary time spent on less important tasks' (25%), showing that AI is mainly intended to enhance productivity.

In the same survey, 70% of employees responded that they would use AI for as many tasks as possible to reduce their workload. This can be interpreted as a desire to work more easily and efficiently to increase productivity.

From the executives' perspective, introducing AI can significantly improve employee performance, increase efficiency, and reduce unnecessary costs. Employees also want their workload to be reduced through AI. The reason why ChatGPT attracted so many office workers when it was released to the public is the same. There is no reason for workers to refuse easier ways to work.

While CEOs and employees agree on productivity, subtle differences in views emerge upon closer examination.

According to a BCG survey of over 13,000 workers across 18 countries this year, 62% of executives were optimistic about introducing AI into work. In contrast, only about 40% of frontline employees responded optimistically to the same question, showing a gap of about 20 percentage points. At the same time, 22% of executives said they were 'worried' about AI entering the workplace, whereas 39% of frontline employees expressed concern, nearly double the difference.

BCG stated, "Compared to a similar survey conducted five years ago, overall optimism (regardless of rank) has increased, and worry has decreased," but also noted that "leaders are much more optimistic than frontline employees regarding AI adoption."

This difference also affected interest levels, which can be seen in how frequently AI is used at work. In the BCG survey, 46% of respondents said they had used generative AI tools at least once, and 26% said they used them multiple times during the week. By position, when asked if they used AI at least once a week, 80% of executives said yes, but only 20% of frontline employees did.

BCG assessed, "This difference likely reflects the optimistic stance on AI use." This means that executives, who are more positive about using AI, show greater interest and use it more frequently than employees.

◆ Employees' True Feelings: "Anxious About Job Replacement"

This difference likely stems from employees' anxiety about job loss. While executives can reduce costs by applying AI and reducing staff, employees naturally feel anxious about losing their jobs. This explains why more executives agree with optimism and more employees express worry.

According to the OECD's March report 'The Impact of AI on the Workplace,' this difference is clear. The survey results in the report show that half of employers expect little change in the number of jobs despite AI adoption. Moreover, one in five employers even expects job growth.

However, more than half of employees surveyed expressed concern about losing their jobs within the next 10 years due to AI adoption. Among them, about 20% said they were 'extremely' worried about losing their jobs. Additionally, over 40% of employees expected their salaries to decrease within 10 years if AI is introduced. The proportion expecting salary increases was much lower, in the 10% range.

This indicates that many workers foresee a negative scenario where AI leads to job loss and salary reduction in their workplaces.

[Image source=EPA Yonhap News]

The OECD survey was conducted in January-February last year, before the emergence of generative AI. With the generative AI boom this year, concerns about job loss have likely intensified. The OECD explained, "Employees who have used AI tend to be more worried about losing their jobs within the next 10 years than those who have not." This year, workers have gained easier access to various AI chatbots such as ChatGPT and Google Bard.

Additionally, in May, IBM in the U.S. announced plans to replace 30% of its administrative staff with AI, and statistics from the U.S. HR consulting firm Challenger, Gray & Christmas (CG&C) showed that 3,900 employees were laid off due to AI in the same month. Such news likely increased workers' anxiety.

◆ Corporate Leaders Focus on 'Work Utilization'

So, do executives intend to reduce staff to cut costs by introducing AI? Survey results show somewhat mixed answers regarding executives' purposes for adopting AI. In the MS survey, while executives considered 'productivity improvement' the most important factor related to AI adoption, they ranked 'reducing the number of employees' as the least important. This means few executives adopt AI to reduce staff. Conversely, the OECD survey showed that employers' top reasons for adopting AI were improving employee performance and reducing employee-related costs.

This difference is interpreted as arising because the areas where AI can be applied are still unclear, making it difficult to predict its impact on employment.

Currently, executives seem focused on enhancing corporate competitiveness by boosting productivity with AI. They are considering whether AI can be used in work, which tasks are suitable for AI, the degree of utilization, the consequences, and how to resolve problems if they arise. Since utilization varies greatly depending on industry and company circumstances and involves adopting new technology, CEOs see it as important to quickly anticipate situations.

Last month, Yale University hosted the '134th CEO Summit,' attended by about 200 CEOs, whose shared insights on applying AI to work reveal their points of interest.

Peter Ojeg, former White House Budget Director and incoming CEO of global investment bank Lazard, evaluated that AI could replace tasks like summarizing meeting minutes or minor investment banking duties. However, he said, "I tried writing emails with GPT-4, but I ended up rewriting most of them," indicating that AI is still immature technology and not yet capable of replacing humans.

On the other hand, Steven Bandrowski, CEO of office equipment company Xerox, said, "AI has already reduced technicians' customer visits by more than 40% and is achieving great results in call centers," actively utilizing AI to improve efficiency.

James Quincey, CEO of Coca-Cola, predicted that AI could cause tremendous disruption in the marketing industry. He said that in an era where AI can easily create images, the time of spending billions of dollars on marketing content might end. If consumers can create marketing content themselves at low cost, it could be good for companies but also potentially disruptive.

Doug McMillon, CEO of Walmart, said, "Whether it's AI or not, it's important not to be fascinated by specific technologies but to understand and focus on what we want to solve," evaluating that "AI presents a great opportunity for us in terms of customer experience, employee experience, efficiency, and supply chain."