Co-funded by the European Union

Artificial intelligence and the changing demand for skills in the labour market (an OECD paper)

  • The Organisation for Economic Cooperation and Development (OECD) recently released a report on the impact of Artificial Intelligence (AI) on the labour market. Published on 10 April 2024, it highlights the changing demand for skills and the profound transformation in how work is organised and performed.
  • The report emphasises a significant shift in skills demand across sectors due to AI adoption, increasing the need for technical and soft skills like problem-solving and critical thinking.
  • AI adoption varies by industry, affecting skill requirements differently across sectors. Employers in technology-intensive fields must prioritise upskilling and reskilling initiatives to cope with rapidly evolving job roles.

Businesses must adapt their human resources strategies to stay competitive in the evolving job market. This adaptation should focus on continuous learning and development, enhancing digital literacy across their organisations, and fostering an adaptable workforce. The report underscores the critical role of these strategies in preparing for the AI-driven future.

As businesses increasingly integrate artificial intelligence (AI) into operations, the labour market is undergoing a profound transformation in skill requirements. However, this shift comes with opportunities and potential benefits. The OECD report provides crucial insights into these trends, revealing how AI reshapes how work is organised and performed and how it can be harnessed to drive innovation and productivity.

While AI technologies lead to a higher demand for workers capable of developing and maintaining AI models, these highly specialised skills represent a small fraction of overall employment. The majority of workers, however, will experience changes in their job roles due to AI. The focus will shift to how AI influences skills in broader job roles, even those that do not directly involve AI development.

Based on a decade of online job vacancies across 10 OECD countries, the study's findings show that in positions with high AI exposure, there is a significant demand for management and business process skills—such as project management, budgeting, and customer support. Approximately 72 per cent of job vacancies require at least one management skill and 67 per cent require business process skills. Additionally, more than half of these positions demand social, emotional, and digital competencies, reflecting the need for soft skills alongside technical expertise.

 

The report also identifies a trend in workplaces more exposed to AI that potentially leads to reevaluating skill priorities in such environments.

Employers must recognise that adopting AI could boost the demand for specific blue-collar skills due to increased productivity. This effect was observed in establishments with higher AI exposure, with a notable demand for production-related and technological skills.

To effectively navigate these changes, businesses should focus on strategic training and development initiatives that enhance their workforce's digital and interpersonal skills. 

Collaboration with educational institutions and policymakers is beneficial and essential to ensure that new entrants into the workforce are equipped with the right mix of skills to thrive in an AI-enhanced job market.