From Najman Hussaini
Let’s assume that the unemployment rate remains stable because job creation continues at the same pace as the labor force expands.
However, as technology advances, productivity per employee increases slightly.
This is where artificial intelligence (AI) comes in. This is a technology that can perform increasingly complex tasks, delivering improvements in weeks rather than years.
If AI can help companies increase productivity at the rate needed to meet expanded business goals, new hires may not be necessary.
Companies don’t hire people for that purpose. New employees bring great talent, but they also incur onboarding costs, administrative expenses, personnel costs, and potential liability.
Additionally, efficiency decreases when companies continue to hire without finding additional work for new employees.
Businesses need productive people, and some of that capability is increasingly available through AI. In that environment, the safest option may be to keep experienced staff and wait to see how much AI improves over the next few months.
Either way, AI skills are already expected in nearly every technical role, and AI’s productivity gains will ultimately benefit nearly every employee.
However, no one knows how much AI will improve. When the future is uncertain, organizations often choose the safest path. In this case, it’s inaction.
The future will become even more challenging as AI capabilities accelerate faster than companies can adapt. If productivity gains significantly outpace business growth, some companies may start cutting staff. This will require AI to evolve beyond its current state, but no one can confidently eliminate it.
The general reaction is simple. If you become better at using AI tools than your colleagues, you will maintain your value. I don’t think that argument is convincing.
If you currently work in a position vulnerable to AI layoffs, ask yourself: Can your manager really differentiate your performance from that of your colleagues?
Have you ever seen an unproductive coworker get promoted and an overperforming coworker ignored?
Do you think all managers carefully assess which employees are using AI most effectively before making difficult staffing decisions?
My suspicion is that some managers simply take the target numbers, make a quick decision, send an email, and move on. Although downsizing orders may come from senior management, the name is often given by middle management.
In some cases, building strong relationships with the people making decisions may be more important than becoming proficient with AI.
Nevertheless, the most likely outcome is not mass unemployment but slowing employment growth. However, its influence is not evenly distributed across experience levels.
Today’s AI tools are especially effective at tasks that are often assigned to junior employees. Those in senior positions may face similar pressures in the future. As a result, new graduates are entering one of the most difficult job markets in recent memory.
Failure to create jobs can have similar effects to replacing workers. If a company plans to hire 10 people but decides not to hire because AI improves the productivity of existing staff, AI will effectively replace those 10 potential hires.
What should we tell those graduates?
If they can’t get their foot in the door, they have little chance to prove themselves. But companies also face real risks when they hire workers who don’t have enough to justify the cost.
The ideal solution is stronger economic growth and the creation of entirely new opportunities. Unfortunately, the broader global environment remains uncertain.
There is an ongoing war in Ukraine and conflict in the Middle East, both of which affect energy prices and, in turn, almost every sector of the economy.
The duration, long-term impact, and potential for future conflicts of these conflicts remain unclear. It is difficult to separate the precise impact of AI on the labor market from these broader economic impacts.
But what is clear is that a combination of technological disruption and geopolitical instability is causing job losses in many industries.
Returning to Malaysia, the situation is equally alarming.
While a university degree has traditionally been seen as a valuable investment in fields such as technology, many graduates are finding that their qualifications no longer provide the security they once promised.
Malaysia also faces long-term demographic challenges. As the population ages, the country risks future economic burdens if young people cannot secure meaningful, well-paying jobs.
Many rural families still dream of seeing their children attend university, work abroad, and enjoy a better life than previous generations.
So what can you do?
It’s a complex question, but what I can say is that policymakers have an important role to play.
Many politicians are actively discussing AI on social media and in public spaces. Pay attention to what they are proposing and consider how those policies may affect your future.
My advice to you, dear reader, is simple and clear. Learn about AI, explore different perspectives, and decide for yourself how best to respond to upcoming changes.
Next: A future without senior employees
Najman Husaini is an FMT reader.
The views expressed are those of the author and do not necessarily reflect the views of FMT.
