AI could destroy hiring in one of the biggest industries for graduates
Steve Varley, chairman and managing partner for the UK and Ireland at EY, told the Financial Times: "Over time our graduate needs are coming down."
This is a big deal.
The "Big Four" - EY, PwC, KPMG and Deloitte - are between them one of the biggest graduate employers in the UK.
Globally, the auditing and accounting industry is also one of the biggest graduate recruiters. If recruitment reduces, thousands of grads will have to find somewhere else to start their careers.
The FT reports that increasing automation and artificial intelligence behind the reducing need for armies of graduates who can do the low-level paperwork usually required of them. In short, technology is replacing their jobs.
This is a theme that's cropping up not just in the auditing and accountancy but across service sector jobs. The World Economic Forum estimates that AI, robotics, and automation could replace 5 million jobs around the world by 2020.
Citi has also estimated that 35% of jobs in the UK are at risk of being replaced by automation, 47% of US jobs are at risk, and across the OECD as a whole an average of 57% of jobs are at risk. In China, the risk of automation is as high as 77%.
It's part of what is being dubbed the "Fourth Industrial Revolution." Just as machines replaced many manual labour jobs in the industrial revolution, advances in computing mean many service sector jobs risk being replaced by computers.
The WEF's calculation of 5 million jobs lost projects 7.1 million jobs wiped out and the creation of 2.1 million new jobs, mainly in more specialised areas such as computing, math, architecture, and engineering. This thesis is played out in the FT report, which says recruiters like EY are increasingly going up against the likes of Apple and Google for graduates as they look for smart tech talent to build their AI.
The paper quotes Jim Peterson, a US-based accounting specialist and author, as saying: "Firms will no longer need armies of junior staff but instead will need the best algorithm design geeks in the world."
The big macro-question behind all these hiring changes is what happens to the people whose jobs get replaced? As Moshe Vardi, a computer science professor at Rice University in Texas, put it at a conference in February: "Society needs to confront this question before it is upon us: if machines are capable of doing almost any work humans can do, what will humans do?"
Citi says: "Could automation increase leisure time further whilst also maintaining a good standard of living for everyone? The risk is that this increased leisure time may only become a reality for the under-employed or unemployed."
The bank warns that unlike part advances the Fourth Industrial Revolution looks like it will create fewer jobs than it destroys and is likely to exacerbate inequality.
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