UK businesses eye AI as the cheaper, non-whining alternative to actual staff

British companies are looking to AI as a way of cutting investment in staff, according to new research.

The research, reported in the Financial Times, is the latest suggestion that rather than boosting productivity (as marketing for AI products from the likes of Microsoft insists,) companies are increasingly exploring the technology as a means to avoid having to invest in staff.

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The study, commissioned by Boston Consulting Group, found that just over half of UK business leaders (51 percent) planned to "redirect investment from staff to AI" and 44 percent planned to prioritize investment in AI.

The survey attributed the shift to increasing costs in hiring staff due to government policies. For example, the UK Chancellor has increased the rate of National Insurance contributions by employers, and the National Living Wage is also set to increase.

While meatbags need paying, AI remains something that can be licensed in the same way as software applications. As such, employers buying into the hype surrounding AI see the tech as a way to reduce their investment in staff.

The government announced plans this week to use AI to drive growth, and last year, OpenAI chief financial officer Sarah Friar reportedly questioned the need to recruit humans for certain roles when there might be a generative AI tool that could do the job.

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While the marketing from companies such as Microsoft might be all about employees saving time through the technology, the finding that more than half of UK businesses are investing to save on staffing costs is not surprising.

Figures from the UK Office for National Statistics have shown a decline in vacancies, with a year-on-year percentage change of almost 15 percent downward in Information and Communication vacancies. Companies such as British Telecom have come up with figures in the region of 10,000 for headcount reductions that could be made possible by the deployment of AI.

There is also evidence that companies are recruiting workers with AI skills. However, those numbers are unlikely to balance out the roles sacrificed by employers keen to embrace the efficiencies of the technology.

While the report might point to government policies as a driver for reducing investment in staff and increasing AI spend, the hype that the technology permits more to be done with less is music to the ears of executives seeking an excuse to make cuts. ®