The AI Revolution: Its Impact on HR Budgets and Redundancies in the UK

In the face of economic uncertainty and rapid technological advancements, the UK job market is undergoing significant changes. One of the most profound shifts is the increasing reliance on Artificial Intelligence (AI) in various sectors, particularly in HR. 

Brexit and the aftermath of the Coronavirus pandemic have caused a ripple effect across every sector. A recent report suggests that a quarter of UK organisations are planning to make redundancies this year. This trend is not just a response to economic pressures, but also a reflection of the growing influence of AI and automation in the workplace. 

Take IBM, for instance. The American tech giant has announced plans to halt hiring for around 7,800 jobs that can be replaced by AI. The roles affected are primarily in back-office functions such as human resources. 

Boeing, the plane maker, is another example of a company adjusting its workforce in response to technological advancements. The company plans to cut about 2,000 jobs in finance and human resources this year, shifting its focus to engineering and manufacturing. Some of these roles will be outsourced to Tata Consulting Services in India, highlighting the global impact of these changes. 

Amazon, is also feeling the effects of the AI revolution. The company plans to cut more than 18,000 jobs, marking the largest number of job cuts in the firm's history. 

The majority of these cuts will come from its consumer retail business and its human resources division. This move is a clear indication of how AI and automation are reshaping the way businesses operate, even in sectors not traditionally associated with technology. 

While these figures may seem daunting, it's important to remember that AI and automation also bring opportunities. AI can handle administrative tasks, freeing up HR professionals to focus on strategic initiatives that require a human touch, such as building a great culture or solving retention challenges. 

Many HR managers feel uncertain about what this means for the future. Two fifths say they’re worried they’ll lose their job as more of the HR function is automated. However, nearly three quarters of business leaders say HR will be more important to the business in the future. There is a clear opportunity for HR departments to harness AI and automation to free up time to focus on supporting businesses with long term goals. 

The rise of AI is undeniably causing a shift in the job market, leading to significant changes in HR budgets and redundancies. However, it's not all doom and gloom. By embracing AI and automation, businesses can become more efficient and HR professionals can focus on tasks that truly require the human touch. As we navigate this new landscape, it's crucial to remember that while AI can enhance efficiency, the human element remains irreplaceable in creating a positive and productive workplace.