The labor market is undergoing a significant transformation, with some industries expanding their workforces while others face reductions due to artificial intelligence and economic pressures. Data from HR and payroll service Employment Hero reveals that sectors such as construction, manufacturing, and education are seeing growth in employment.
Blue Collar and Education Sector Growth
Blue collar employment is on the rise, driven by a demand for roles considered less susceptible to AI automation. The construction industry experienced a 2.1% increase in employees in June and an 8.1% rise over the preceding three months. This trend appears to be fueled by young graduates shifting towards vocational trades, a move that offers an alternative to entry-level office positions increasingly impacted by AI. Manufacturing jobs also show an upward trajectory, with a 4.7% increase in workers during June and a substantial 9.3% growth over the past year.
Kevin Fitzgerald, UK managing director at Employment Hero, noted the trend of young people pursuing vocational roles with common apprenticeship pathways. He suggested that government ambitions to reindustrialize could further bolster this growth.
Within the education sector, a 4.4% monthly increase in roles was recorded in June, with an 8.1% growth over three months. Employment Hero attributes this expansion to a surge in the student population and increased curriculum complexity, necessitating more educators.
AI's Dual Impact: Job Creation in Tech
While AI has led to job displacement in certain areas, it is simultaneously creating new opportunities, particularly within the technology sector. Science and technology roles saw the most significant growth in June, with a 5.7% monthly increase. The expanding adoption of AI technologies is reportedly generating new positions for individuals skilled in developing and utilizing these tools.
Financial Sector Challenges
Conversely, the financial services sector, including banking and accounting, is experiencing a downturn in employment. The number of people working in accountancy decreased by 0.1% in June, marking a 6% fall over a three-month period. Employment Hero attributes these reductions to increased automation and a potential skills gap.
Banking jobs have also declined, with a 1.6% drop in employment in June and a 5.7% decrease over the past three months. Factors contributing to this decline include the high-pressure work environment, which may deter applicants, and job losses to AI. Political uncertainty has also prompted some employers in this sector to pause hiring plans. The average salary in this sector has also fallen to a 13-month low of £47,025 annually, indicating negative wage growth for the only sector reporting such a trend.
Admin and office support roles, another area affected by AI advancements, saw a marginal decline of 0.3% in June. Fitzgerald highlighted that the banking, finance, and insurance industries, traditionally significant for graduate employment, are navigating economic pressures and technological shifts, leading many businesses to adopt a more conservative hiring approach.