Understanding the Impact of AI on Human Workforce Security

The race to develop AI, across corporations and nations, to win or not be left behind poses a risk to human workforce security. While this risk is currently mild, it could become the most consequential issue in the AI era.

As AI gets heaved into agents capable of performing digital tasks through video interpretations of physical processes, its efficiency, availability and affordability can make it preferable to human labor. This preference may result in substitution, where the budget favors AI and not humans.

What people would do if AI replaced them is a question that is significantly different from past displacements. The centrality of intelligence to human work, rather than physical strength, makes AI replacement an open question. Every week, we hear of AI assisting endeavors in science research, engineering, finance, energy, health, education, agriculture and so forth — tasks that were normally reserved for humans. While it may not appear that AI is causing mass layoffs yet, its percolation may start reducing the need for new hires and the possibility of reducing the workforce for the rest of this decade and beyond.

Preparing for AI’s impact

AI taking over human jobs is not the same as replacing traffic controllers or elevator operators with automation. The peak of human exceptionality is intelligence. If AI competes with humans on many levels of [dynamic] intelligence and surpasses humans, humans have nowhere else to go. There is nothing beyond intelligence for work, and the most valuable and sought-after roles by humans are predicated on intelligence. Once AI delivers on being a substitute in a competitive economy, the future becomes uncertain.

There are ways to prepare for AI's work substitution. One is to explore new forms of work that AI may not yet be able to do. Another is to use AI to support business expansion, especially small and medium-sized businesses, to create more jobs and generate better earnings.

Other strategies include varying how payment is made for some kind of work, or to tier roles so that multiple people are hired for a role, at graded tiers, at different wages and capped hours. People can also spend time in new places and doing what would not be remunerated directly. For example, flipping books in libraries, noting what is remarkable, then submitting as new resources for knowledge.

Countering AI risks can create new employment opportunities in the future. There are several ways that AI could be misused, or instances where it may not be the solution. They include catching deepfakes like images, videos, and audios, as well as misinformation, before they are used for nefarious purposes. 

The main goal is to direct AI towards expanding value and markets, benefiting more people and preventing displacement. Work opportunity expansion and payment segmentation are possible areas to prepare for.

Singapore’s strategic response

WIth human jobs at stake, how can a country gain an advantage with AI? One option is workforce economics. It may also become the only thing that matters with the intense AI acceleration in the technology industry.

For example, it can prioritize workforce economics for AI in the private and public sectors. This can lead to research programs for economic preparedness as AI agents rise. These solutions can be broad in application, but the main objective must be to explore possibilities for work within Singapore, with some proprietary models that can be licensed externally. For example, a country like Singapore can set up several AI Economics Research Labs to explore models for human tasks, activities, works, substitutes, etc., in the face of AI's advancement. 

Such approaches go beyond universal basic income (UBI), which is about giving people a steady income. After all, the question of purpose and daily meaningful tasks may not be resolved with just income alone if AI wipes out chunks of cognitive hierarchy.

A recent CNBC report "Singapore Budget 2025: More support for businesses and households to ease living costs" highlighted that the country is indeed taking the first steps in addressing workforce economics. It noted that the government is readying “tax breaks, consumption vouchers, and more schemes to help Singaporeans and businesses cope with rising costs took center stage at Budget 2025.”

This is the first budget under Prime Minister Lawrence Wong and the last before Singapore's next general election, due by November 2025. Beyond cash rebates and vouchers, Singapore is going to introduce a new SGD1 billion Private Credit Growth Fund to give companies more financing options. Wong attributes the decision to the emergence of a private credit market that offers “innovative financing solutions to companies.”

In addition, Wong announced that the government will set aside SGD150 million for a new Enterprise Compute Initiative, where eligible enterprises can partner major cloud service providers to access AI tools and computing power, as well as expert consultancy services, “so that they can leverage AI more effectively.”

Headcount fall out is already happening though

The measures come at a time when Singapore’s leading institutions are under pressure to shed jobs. Another report from Fortune about DBS, Southeast Asia’s largest bank and headquartered in Singapore, noted that it is cutting temp roles due to AI. Revealed at an IT event in India, the bank said it would reduce its headcount by 4,000 over the next three years, with outgoing CEO Piyush Gupta arguing that AI can help take on responsibilities previously carried out by human employees.

Gupta also noted that AI was unlike any other technology he’d dealt with in the past. “In my 15 years of being a CEO, for the first time, I’m struggling to create jobs. I’m struggling to say how I will repurpose people to create jobs.” Currently, DBS is looking to not renew its over 4,000 temporary or contract staff as part of "natural attrition", while Gupta noted the bank will add 1,000 new positions related to AI. 

The bank also told Fortune it’s investing in its employees to enable them to be “future ready.” Some 13,000 staff have been earmarked for “upskilling or reskilling” and over 10,000 have commenced training on skills such as AI and data as they prepare to work in an AI-driven era.

The time for debating AI's impact on the workforce is over. AI will impact job security and companies and governments need to take concrete steps to ensure societal resilience and continued prosperity go beyond mere income provision.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/Feodora Chiosea