Artificial Intelligence: How Is It Affecting the Job Market?

By Indeed Editorial Team

Published 30 April 2022

Increasing advancements in artificial intelligence (AI) and machine learning are affecting labour markets in interesting ways. From improvements in software algorithms in data analytics to surging robotics technologies in manufacturing, AI technology is creating a demand for new technology professionals. Learning about the ways AI affects the job market can help you identify which industries have a demand for your professional skills and knowledge. In this article, we explain different types of AI and discuss how AI is affecting the job market.

What is artificial intelligence?

Artificial intelligence is a branch of computer science concerned with engineering machines that learn from experience and perform human-like tasks at an accelerated rate. AI has various capabilities to suit different purposes. For example, weak AI has a narrow focus for specific tasks, such as analysing data or detecting patterns. Strong AI has a more advanced focus, such as manufacturing robots or mapping diseases. Industries around the world have adopted the use of AI, from machine algorithms in manufacturing to digital payments in banking.

What are the different types of artificial intelligence?

To gain a clearer understanding of AI, here are several types of AI with examples that illustrate how they're used:

Reactive machines

These machines are basic in their intelligence and have limited functionality. They react to existing conditions in the same way and cannot learn from experiences. Email filtering software is an example of reactive AI. It serves to react to identical situations in the same way by detecting unwanted emails and preventing them from getting into a user's email inbox.

Limited memory

AI with limited memory can store data from experiences and use that information to make better-informed decisions. Companies designing self-driving cars use limited memory AI. This is to ensure autonomous vehicles can assimilate essential information, such as speed limits, traffic light detection and distance between other vehicles, and use that learned data to navigate roads safely. Streaming service companies can also benefit from limited memory AI. For example, they might use algorithm software that detects customers' streaming patterns to make accurate predictions about their preferences. This information can help provide customers with content they find enjoyable.

Theory of Mind

Although this type of AI is incomplete, the aim of Theory of Mind is to have a machine that can understand human emotions and be able to interact with humans. Health care companies may seek this technology to develop robots that can care for and communicate with ill and elderly people. The childcare industry could also benefit from this technology, with intelligent machines providing emotional support to children.

How does artificial intelligence affect the job market?

Here are some important ways that AI is affecting the job market in different industries:

Big data analytics

AI technology is transforming the job market by allowing companies to manage large volumes of data. It achieves this in a number of ways, including:

  • alerting companies to inconsistent data patterns

  • providing predictive analytics that humans might not recognise

  • identifying data types and drawing connections between datasets

Having AI software that efficiently analyses and manages data can help companies reduce their costs and hire the right employees. For example, it can ensure invoice processing is correct, which eliminates the possibility of payment errors. Additionally, companies can use software programs to scan job applications that match their desired requirements. The growing trend for big data analytics has also led to new openings for potential employees. Companies require artificially intelligent algorithms to master the complexities of handling large quantities of data. This has spawned a demand for data professionals who can write algorithms that optimise a company's workflow.

Digital marketing

AI is being used in digital marketing to improve marketing strategies. Machine learning algorithms make this possible by extracting past data and making accurate predictions about customer behaviour. With more accessible data, such as the frequency of customer purchases and customer demographics, marketing teams can make better-informed decisions. For example, a business's algorithm tools might accurately predict that a specific demographic makes frequent purchases on social media platforms. This information can help the business concentrate its advertising dollars on creating social media advertising that targets this demographic.

AI in digital marketing is also affecting the job market by creating more demand for professional web developers. As many businesses are marketing online, they require web developers who can customise their websites to suit the needs of their customers. For example, developers might use AI software to build a chatbot for a business website. Chatbots help to resolve customer queries, which can improve customer satisfaction and save costs for a company.

Related: What Is a Digital Marketer? (With Major Duties and Skills)

Information security

AI technology is revolutionising the way businesses protect sensitive information. With large quantities of data transferring from businesses to customers daily, it can be challenging for cyber security teams to identify potential threats. AI technology can reduce the risk of a security breach by identifying threats, such as malware or phishing, at a much faster rate than trained personnel. The importance of cyber security has created a growing demand for information security analysts. These are professionals who install network security systems to protect a computer network.


AI technology is having a major impact on the healthcare industry. For example, AI programs are being developed and used for medical diagnoses. This software can help doctors diagnose specific diseases by scanning large quantities of medical data that apply to a patient's condition. Another example is the use of AI-powered robots, equipped with surgical instruments and cameras, to assist medical professionals in performing surgeries. These innovations could affect the job market by requiring healthcare professionals and trainees to undergo additional training to learn how to operate medical-based AI technologies.

Related: What Does a Health Educator Do? (Plus 3 Job Sectors to Consider)

Financial services

Financial institutions are using AI technologies to reduce operating expenses and improve productivity. For example, institutional investors use algorithmic trading to execute orders at a rate faster and more cost-effective than a human trader. The banking industry also uses machine learning algorithms to identify fraudulent transactions. This minimises operating expenses by reducing the time and cost spent on delivering unnecessary chargebacks.

These AI advancements in the finance industry are affecting the job market by reducing the need for clerical workers who perform manual tasks. For example, companies can employ automated software solutions to organise documents, which can replace clerical employees who perform document management duties.

Related: Different Types of Finance Jobs (With Duties and Salaries)

Real estate

Innovations in AI are bringing significant changes to the real estate industry. Real estate companies can now use software algorithms to arrange large volumes of data in short periods of time to uncover important information, such as property values and investment forecasts, to improve decision making. Real estate investors are also benefiting from AI innovations. For example, advances in building information modeling software are providing investors with more accurate figures regarding project costs and time schedules. This technology also provides a visual layout of the building at every stage of construction, offering greater information to help make changes where applicable.

Although these AI-driven changes are having positive effects on real estate companies, they may also affect the job market in important ways. For example, there could be a significant reduction in demand for administrative employees. This is because automated systems and AI can perform many administrative tasks, such as word processing, database management and accounting duties, at a faster and more cost-effective rate. Additionally, AI may create a demand for specialised labour. For example, AI photo capturing technology used by real estate companies may create more job opportunities for computing professionals.

Related: What Are Careers in Real Estate? (Job Duties and Salaries)


The manufacturing industry uses AI robotics to automate repetitive tasks and reduce the margin of error. These can include tasks such as welding and cutting materials or machine loading. Robotics technology is providing significant benefits to companies because it can operate 24/7, is cost-effective and helps companies to remain competitive.

AI technology in manufacturing is also having a positive effect on the job market. For example, prior to AI innovations, manufacturing companies may have relocated to another country where labour costs were lower. Industrial robots can now do this labour. This may eliminate skill shortages in a company's country of residence and increase the demand for manufacturing jobs. Additionally, the shift by manufacturing companies to the use of robotics creates a demand for skilled labour, like software programmers and technicians skilled in robotics.