AI is changing the workforce—kind of

Is AI eroding the software development workforce?

Maybe, maybe not. Findings from a new survey by engineering talent acquisition firm Karat of around 400 tech executives in the US, India, and China indicate that the picture may be complicated—AI is having an impact, but it’s hard to pinpoint what it is.

Producerism. Karat President Jeffrey Spector told IT Brew that survey respondents said the technology is leading to productivity gains, and putting some engineers in a better position to leverage AI for efficiency. These executives estimated there has been a 34% increase in productivity from use of AI in code generation and testing.

“Those gains were coming from the top engineers,” Spector said, noting that 73% of respondents believe good engineers who use AI correctly are now worth three times as much as they’re paid.

AI use has led to a bifurcation of talent in the workplace depending on how engineers are utilizing AI. At least that’s how tech leaders see it; over half of survey respondents (59%) feel weaker staffers are delivering net zero or even negative value in the AI age. But it doesn’t break down by experience level—some younger engineers are AI natives who can move quickly and efficiently.

“Some feel like there’s a barbell distribution where their junior engineers and their senior engineers are really leaning into this, but it’s actually the mid-level engineers that are kind of dragging their feet,” Spector said. “They’ve done things the way that they’ve done them for a long time, and on some level, they feel like the AI is slowing them down.”

Ch-AI-nges. AI literacy is increasingly defining roles across businesses, and not just the ones reliant on tech. At an Indeed virtual roundtable event in November, Salesforce SVP of enterprise IT strategy Shibani Ahuja discussed how the landscape is changing.

“AI literacy used to mean, ‘Teach people what AI is.’ Now it means, ‘Can you apply AI in your actual day-to-day?’” said Ahuja. “And not just engineers—product, marketing, HR, business analysts, all of them.”

AI-related productivity gains are part of an ongoing conversation in the C-suite, although company investment in the technology has been sporadic, as CompTIA Chief Research Officer Tim Herbert told IT Brew last month.

“At the C-suite level, there are expectations that it will boost productivity and by extension, the bottom line,” Herbert said. “But at the same time, there was also a fairly high incidence of companies backtracking, and they cite a number of reasons for that—everything from performance to execution.”

Cash money. One thing that is likely to stay steady—or even increase—is company headcount. That’s been borne out by jobs posting data that shows AI investment is leading to hiring. The Karat survey found 85% of tech leaders expect to see software development hiring continue in spite of, or even because of, the use of AI.

“That was an encouraging sign; AI is not eliminating jobs, but actually transforming them,” Spector said.