AI and the Productivity Trap: A Finance Perspective
What is the point of AI if employees are expected to do more work, at greater intensity, in the same hours? The Daiichi Life Research Institute’s Kashiwamura Tasuku explains the importance of practices that fairly distribute the benefits of the technology.
Generative AI is gaining widespread use across industries, with finance being one of the leading adopters. A recent international survey revealed that around 80% of financial service providers incorporate AI into their operations. Yet, despite the productivity gains, only a limited number of companies have managed to convert these benefits into improved profitability. This phenomenon, termed the "productivity trap," stems from human factors that hinder the full realization of AI-driven productivity gains.
A study conducted by Stanford University and the Massachusetts Institute of Technology, analyzing data from 5,172 customer support employees at a US Fortune 500 company, demonstrated that AI assistants significantly improved the number of cases employees could resolve per hour. Less skilled workers saw substantial benefits, while highly skilled employees experienced minimal improvements.
Additionally, AI facilitated faster upskilling of new hires, with those using the technology reaching similar productivity levels to non-AI users within half the time.
For employees, the introduction of AI means they can accomplish tasks in less time, but often end up working the same hours, albeit with increased intensity. Despite these gains, employees frequently fail to reap the benefits of their freed time, with 75.4% of the additional hours invested back into work-related tasks. This phenomenon, termed "smart slacking," undermines the potential for AI to enhance workplace productivity and satisfaction.
To counteract the productivity trap, businesses must adopt human-centered practices. Firstly, the benefits of AI-driven productivity improvements must be distributed fairly among employees, reflected in bonuses, pay raises, or other incentives such as a four-day workweek or remote work options. Secondly, companies need to create new roles and evaluation criteria for employees who have gained more time due to AI, focusing on the quality of problem-solving, coaching skills, and contributions to AI enhancements.
Lastly, management should emphasize that AI is a supportive tool, regularly monitoring metrics like overtime hours and job satisfaction to demonstrate the positive impact on employees' well-being and overall performance.
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