AI Replacing Jobs: Should Consultants Be Worried?

Rapid innovation has been a hallmark of the 21st century. Today, the most cutting-edge innovation can be found in the development and deployment of Artificial Intelligence (AI). Yet, with innovation and progress come fear and unintended consequences. Since the industrial revolution, people have been scared of innovation reducing employment opportunities. Today is no different, as Reddit boards will attest – people are terrified of AI replacing jobs that once seemed safe.

As the innovation machine continues to chug, experts try to predict where the next redundancies will occur. Difficult as it is to predict the direction of innovation, directional trends allow us to understand what jobs AI will replace.

This then begs the question: should consultants be worried?

In short: most likely not, although entry-level analyst roles may look different in the future.

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Will AI Replace Consultants?

AI’s big selling point is that it reduces human effort. At its best, it can predict likely outcomes. At its worst, it can automate a repetitive action. So, which jobs will AI replace?

We have seen the application of AI to erase millions of manufacturing jobs. In short, jobs with repetitive, non-specialized activity are easily replaced by AI.

AI has also affected more white-collar jobs. Several hedge funds have formed AI investing arms to tap into AI’s predictive powers. It is interesting to note that while there has been disruption in this sector, AI is not replacing these jobs. Rather, new jobs and new divisions are being created to utilize AI’s computational abilities.

This offers a look into how AI in consulting might be. Following the trend, it seems that less “creative” jobs are more prone to being replaced by AI. Yet, contrary to popular belief, consulting is one of the most creative fields in business – you are charged with developing innovative solutions to a business’ hairiest problems.

In addition, even though consulting involves the use of data analytics, it is a primarily human-capital-driven industry. When firms sell projects, they are selling their people to be trusted advisors to business leadership. This is precisely why consulting is one of those roles AI can’t replace.

Even if AI will not replace the consultant, it will affect the consulting industry. As costs rise across the industry (see the latest consulting salary numbers) and firms have limited pricing power as new players enter the market, firms really only have leverage on the side of the revenue equation: costs. Our hypothesis? It is most likely that AI will replace one analyst on a team, saving consulting firms one salary per team while contributing to what was already a purely analytical workstream.

What Jobs will AI Replace?

Cognitive bias is one of the biggest barriers to AI’s universal adoption. Essentially, cognitive bias in AI refers to the tendency of the algorithm to reflect the biases of its creator. For example, a program built to predict stock market trends might produce biased recommendations for petroleum stocks. This might be because it was made by an energy sector expert who programmed it based on an inordinate amount of petroleum data. This is the reason that companies cannot rely on AI systems to provide recommendations in situations where subjective understanding is required.

Here, AI can replace jobs that are not paid for their expertise – such as those in manufacturing or even standard analysis.

However, seeing AI replacement in consulting – where firms are paid for strategic recommendations and implementation plans based on best practices observed across a variety of clients – seems unlikely.

Analysis vs Judgement

While consulting as a whole might be safe, certain roles are more likely to succumb to AI than others. For example, as mentioned earlier, entry level analysts in consulting are generally used to build models and conduct research. Such roles are replaceable by AI given their repetitive and relatively unspecialized nature.

Is AI something to worry about?

Not really. Every industry evolves over the years. Consulting itself has changed from 10 years ago. As AI automates roles further down the chain, the nature of starting roles at consulting firms will change as well. For example, these roles may require less analysis and more client management. Effectively, AI proliferation in consulting will most likely lead to a greater emphasis on the development of expertise and strategy. This is a trend that will be more noticeable even at junior levels.

Jobs That AI Can’t Replace

The value proposition of consulting will remain due to a consultant’s ability to offer reliable and expert judgement. This decidedly subjective skill is one that AI is unable to mimic due to its very nature.

AI might conduct analysis that suggests a particular investment for X% return. However, only the judgement of a consultant would discern that while the company’s financials might look good on paper, the debt they have taken on is actually far riskier than it seems. Given this scenario, spending cash on an investment would spread the company too thin, posing an undue risk.

This is the reason companies hire outside experts. This is the reason consulting is one of the jobs that AI can’t replace.

Industry AI Trends

Firms across the board have invested heavily in developing analytical capabilities and expertise. Practice areas including McKinsey Digital and BCG Gamma prove the industry’s commitment to capitalizing on AI. Both of these divisions are proof that AI is but a tool for consulting, rather than a replacement. AI in consulting means faster analytics and more time to focus on the big picture.

In addition, the proliferation of AI is going to lead to companies having more data available to them than ever before. However, more data doesn’t automatically lead to more understanding on how to use it. As companies need more help identifying insights from data, the value proposition of consulting will only grow.

Concluding Thoughts

AI is coming, whether we like it or not, and will replace jobs where uniformity, replication and speed are paramount. Fortunately, none of the following are part of the value proposition of consulting. The likelihood of AI replacing advisory roles like management consulting is very low. However, we can see AI taking on a lot of the analytical and research grunt work in the industry, which will lead to an evolution of the entry-level analyst role.

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Filed Under: management consulting, Technology in Consulting