Companies that use artificial intelligence (AI) in their operations are more likely, so far, to retrain employees than lay them off or adjust hiring practices, according to a Federal Reserve Bank of New York survey of businesses in its service region.
As more businesses tap AI, there’s been general concern about its impact on the workforce, particularly in prompting the displacement of employees. The New York Fed’s August survey of New York and northern New Jersey businesses shows that few service firms and manufacturers have laid off employees so far due to AI, but a greater number expect to do so over the next six months. Meanwhile, a large share of businesses report retraining their workers on using AI. Among businesses that use AI, more than a third of service firms and 14% of manufacturing firms say they have increased training in response to AI. And more than half of both sectors expect to increase training over the next six months.
New York Fed cautioned that the data comes from a small batch of companies — about one-quarter to 40% of firms that are using AI — so AI’s impact on the economy-wide labor market is likely to be “relatively modest.”
Still, the findings could be an indicator of companies’ workforce approach to AI, which could help institutions such as community colleges to prepare students for the workforce or in training incumbent workers. Half of the surveyed companies using AI are in the information, finance, and professional and business service sectors. About 40% to 45% of businesses are in the wholesale and leisure and hospitality sectors, plus about one-third of firms are in the education and health, personal services and retail sectors.
How companies use AI varies, though the bulk of them use it for searching information, marketing and advertising, business analysis and data management (see chart below).
