Unlocking 9 Million Futures: How AI-Powered Job Matching Can Re-energise Britain’s Labour Market
London Tech Week showed some of the best of the £1 trillion British tech sector this month. As President of CIPD, the professional body for HR and people development, I was thrilled to see insight in the same week from our flagship Festival of Work. But the uncomfortable truth is that while our economy has plenty of bright spots, 9 million people are economically inactive. This represents collective cost and individual tragedy.
The cost of economic inactivity due to sickness absence and other ill health is likely to be at least £240bn per year but could be as much as £330bn, according to the Department for Work and Pensions (DWP).[1]
Economic inactivity remains one of the UK’s major, strategic challenges. For many, this is a tragic waste of their potential, and they want the right opportunity to contribute. For business, securing the right talent is still a top problem. For Britain, it’s impossible to meet our growth potential without fixing this issue.
We have an unmissable opportunity to examine how AI innovation can help more people into the labour market. Call it AI x Economic Inactivity.
This is a technology that can match people with jobs and support faster, cheaper and in a more personalised way than we’ve ever been able to before. Estonia’s employment service has used an AI-powered tool and seen 10-15% more people remain employed than those advised by a human without AI assistance.[2]
If we deploy AI-driven job-matching at scale in the UK, could we help one in ten out of economic inactivity, adding hundreds of billions to GDP, reducing costs, and improving people’s lives?
The task is a thorny one. CIPD’s spring Labour Market Outlook shows employer confidence at a post-pandemic low. Recruitment and Employment Confederation’s latest Report on Jobs shows a continued fall in hiring. Russell Reynolds Associates’ recent Global Leadership Monitor shows CEOs rate economic uncertainty and the availability of key talent and skills as their biggest threats – while also spinning the plates of technological change, workforce transformation and increased regulation. Despite 42% of leaders ranking workforce transformation as a critical threat to organizational health, only 38% of leaders feel prepared to face this risk, making it the top five threat that leaders feel least prepared to address.[3]
Even if hiring is slowing, there remain over 700,000 vacancies. Anxious leaders need to look to new talent pools to fill these.
They should look to the 9m inactive Britons.
Within the 9 million are people facing a range of challenges: around 3m people with long-term health conditions, between 1.5m-2.7m (ONS[4] / census[5] data) carers, and 1m people retiring early. Around 2m students are counted here too.
7 in 10 want to work, found the Pathways to Work commission in Barnsley.[6]
AI could help in tailored ways. For those who need flexible work, it can help to identify the right employers. For those who need health support, it could connect to appointments and treatment in the local area. For those wanting training, AI should link colleges and employers in faster or real time.
AI should also be able to cut through noise: the Barnsley commission found that “the ‘system’ designed to help people find work is in practice a chaotic mass of initiatives and projects that both those seeking work and those providing it find impossible to navigate.”
So it’s time to explore how we can more effectively match people with opportunities that are right for them.
I’m already excited by some strong examples of innovation. Multi award-winners for AI in Recruitment Spotted Zebra will be bringing their leadership in skills science and AI, showing how employers can connect to talent they are currently overlooking and gain over 20% in retention. AI Product of the Year Developing Experts will be sharing their insights in connecting learning to real career opportunities.
I'm thrilled that a great group of pioneers, award winners, CEOs and experts in relevant fields are coming together.
This project will build on important work like the research led by CIPD and Innovate UK into people and organisational factors that can accelerate AI adoption – shaping frameworks for ethical and responsible use of AI, and building employers’ understanding of skills and organisational development needs.
Many have philosophised about what AI will do to the nature of jobs, and the character of the economy. There are also well-developed taxonomies for the specifics of what skills are needed to work with AI, and London Tech Week opened with a big government pledge to upskill young people in AI.[7]
This groundbreaking project is different. It is practical, examining how AI can help match people with vacancies here and now. Yet it is ambitious, spanning all dimensions of the labour market, from unemployment and inactivity to recruitment, HR practices and retention.
Our aims are to:
connect people with opportunities (in particular, jobseekers with jobs)
connect the dots; reveal opportunities and challenges in the wider UK labour market
connect innovators and policymakers where needed
exchange insights and collaborate for good
enable local, national and international comparisons
support people professionals to get understanding and practical value from the leading edge
The ultimate outcomes could be significant. By next year I want to:
connect people with jobs and support
increase innovation
increase effective adoption of AI throughout the labour market
increase confidence and tools for people professionals
I’m open about the scale of the challenge. Is measurable impact possible in 12-18 months? Can we improve matching that works for up to 9 million more people? Can we help quantify potential contributions to productivity and economic growth?
I hope we can because the prize is huge. And these are real people’s circumstances. We could have positive impact for millions as well as major gains for the country. If we could reduce the cost of long-term sick leave, we could help millions be well and save the economy £66.3bn a year in lost productivity by 2030.[8] If we could increase the employment rate for people aged 50-64 we could add £9bn to GDP.[9] Recent data suggests that only 5% of carers are able to sustain jobs – if we could double that, could over 75,000 people play a valued role in the workplace as well as at home?[10]
With my rare background having headed both the labour market and technology departments of a G7 nation, I believe this intersection of people, work and technology could not be more important.
This is a call to entrepreneurs and innovators to get involved. I’m focused on the private sector where either startups or established firms have identified commercially-viable innovation, and am keen for insight from those involved in employability.
Who is innovating right now in matching and retention at key touchpoints of the labour market? What are the gaps, and the opportunities? Given the travails of the ONS’ labour market survey, what data can we now pool in other ways? What can cities and regions in the UK demonstrate works? Should we be learning from any other nations?
This is a vast opportunity for progress. If you want to join me in applying technology to help people secure jobs at a time of pronounced change, I’d love to hear from you.
Thanks Rt Hon Chloe Smith - we deployed AI onto the Bright Network about a year before ChatGPT was released - it increased our matching ability between roles and job hunters by 10X (!). Feels like huge potential here for UK to get a lot more efficient at this.....
Co-Founder and CCO | Spotted Zebra | Helping companies spot the right hire every time with skills science and AI
3moThank you for sharing Rt Hon Chloe Smith - AI combined with skills science has the potential to transform the way in which we tackle this problem. Really looking forward to sharing ideas and continuing this discussion in person next week!
Co-Founder & CEO at Adzuna, building smarter job search in the era of AI. I disrupt existing stuff and help new & better stuff grow. (Note: I don't accept connections from people i don't know already!)
3moThis is such an important topic. AI job matching has created a once in a generation opportunity with the new Jobs and Careers Service (based on the recent white paper) to transform the DWP offer and impact working age outcomes. At Adzuna we're a leader in home grown AI job matching and have been building these AI tools for over a decade in our private sector service - like ValueMyCV, Prepper and ApplyIQ - and we've been supporting the DWP with the Find a Job service since 2018. We see an incredible opportunity not only in job matching, but also using all of the (anonymised) data that exists in government to be able to train jobs AI on 'outcomes', so we help identify the right interventions and help people find the roles and employers that are proven to help lift their circumstances. I know the likes of Beam also have incredible AI tech that could help employment support and work coaches. We're already talking to the department about some of what is possible but we'd love your help to raise the profile of this conversation - and be part of it. There seems to be lots of AI strategy progress in big spending areas like defence and healthcare but more to do in welfare and employment.
Associate Partner at PA Consulting
3moYes Chloe! This is exactly what the world needs- if we are to unleash all that untapped talent…now to connect the right supply with the organisations with the complimentary demand! Sounds like all organisations need to double down on their workforce planning efforts, otherwise they will miss the boat leaving with all that untapped talent!
Partner, PA Consulting and author
3moThis is a cause for optimism for people who are struggling to find a job that matches their skills and circumstances. And of course for many employers for whom skills shortage is such a worry. Thank you for sharing Chloe.