Why automating back-office roles won’t be quick or easy

Business leaders may be enthusiastic about the potential benefits of AI and automation. But it is essential that they take action to guard against large-scale redundancies

Back-office employees working at computer

Last year, a report by Goldman Sachs found that advances in AI could drive a 7% increase in global GDP over a 10-year period. The report acknowledges that there is uncertainty around the use of generative AI, but points to its ability to “generate content that is indistinguishable from human-created output and to break down communication barriers” as potentially significant drivers of macroeconomic growth.

But there is another side to the story. At the AI Safety Summit at Bletchley Park in November 2023, Elon Musk told Rishi Sunak that AI could be “the most destructive force in history. There will come a point where no job is needed. It’s both good and bad – one of the challenges in the future will be how do we find meaning in life.”

These are two distinct outlooks on the progression of AI technology. But no matter how you perceive its impact, the speed of its development is undeniable – and everyone must prepare for a world in which machines play a larger role in our lives.

According to the World Economic Forum’s The Future of Jobs report, AI will replace 85 million jobs globally by 2025. Firms in the tech sector – naturally, early adopters of AI tools – have shown some early indications of how AI can affect the workforce. Recent press reports of redundancies at companies such as Microsoft, Amazon, Spotify and Google will undoubtedly be followed by others, both inside and outside of the tech sphere.

Recalibrating the workforce

When Spotify CEO Daniel Ek announced that 17% of its workforce would be laid off, he stressed that, going forward, the company would have to be “relentlessly resourceful in the ways we operate, innovate and tackle problems”.

The phrase “relentlessly resourceful” is an interesting choice in the context of modern employment law. While in the past this may have meant increasing targets or streamlining teams, Spotify’s approach is distinctly more modern and involves a recalibration of its entire way of working. Ek’s statement goes on to say that Spotify still has “too many people dedicated to supporting work and even doing work around the work”. 

Predictably, the decision made by Ek will have a disproportionate impact on back-office staff – those operating in administration and HR roles – as AI tools begin to automate routine cognitive and transactional tasks. 

Rather than content themselves with large-scale redundancies, businesses would be better off putting systems in place to upskill, reskill and redeploy workers to work effectively alongside AI tools being leveraged. After all, left unsupervised, AI tools could leave businesses open to legal and ethical scrutiny.

Automation gone wrong

Take HR, for instance. AI has been used for some time in the recruitment process, reducing human interaction as algorithms attempt to predict which recruits will be high performers and narrow an often broad range of candidates. The risk for employers is that as the tool ‘learns’ to recognise patterns and predict high performers, the understanding of how decisions are reached will be more difficult to ascertain, leaving a company open to allegations of bias and discrimination in the process. 

Indeed, Amazon was forced to scrap its own AI-powered recruitment tool in 2018 after the algorithm was found to be biased towards men. Little surprise. The system had been trained on data submitted by applicants over a 10-year period, but the majority of those applicants were men, which led to the system concluding that male candidates were preferable to others. 

Where redundancies become necessary careful thought needs to be given to roles and possible redeployment. If the team that is being impacted is HR, it may be necessary to outsource the process to an independent HR function to ensure impartiality and transparency.

The consequences of an automated workforce

There will also be broader business consequences of a reduced workforce. Innovation, for instance, comes from collaboration and teams working together to find solutions to problems. AI can easily lead to less workplace collaboration, which in turn may affect both growth and innovation. 

Upskilling and reskilling is also the natural response to technological disruption. Many of today’s jobs didn’t exist even 20 years ago, which is an indication of how roles develop and emerge to work with the technology of the day.

Business will certainly accelerate their use of AI to streamline administrative and repetitive tasks. But rather than rush to recalibrate their workforce, it is essential that employers consider the impact of the technology not just on their business performance, but also on the workforce. If firms fail to empower humans in the new world of work, they will inevitably be left with unreliable and even dangerous technologies in charge of critical business functions.