The Changing Shape of the AI Workforce
The AI workforce is facing booming demand, rapid skill evolution, and fierce competition across the country – how can organizations and individuals keep up?
Since generative AI burst on the scene in late 2022, there has been endless debate on the impact AI will have on the workforce. Despite the constant drumbeat of AI punditry, however, many fundamental questions about AI's true effect on the workforce remain unanswered. This leaves both organizations and individuals in the dark when it comes to navigating the current and future state of AI in the job market.
Amidst this AI-fueled uncertainty, one trend has been crystal clear: demand for workers with AI skills is booming. But as AI matures and organizations begin to take a more targeted approach to their AI initiatives, the AI job market is becoming more nuanced. This requires stakeholders across the AI ecosystem to take stock of, and adapt to, key trends in the AI job market.
The Supply of AI Workers is Struggling to Keep Pace with Demand
Demand for workers with AI skills remains robust. In 2024, there were 602,544 job openings requesting AI skills – 24% higher than just a year before. During the same timeframe, demand for workers with generative AI skills has grown 313% — faster than nearly any other skill in the market.
In the past 12 months, there were 36,125 job openings demanding tech workers with generative AI skills in the United States, but we estimate only 32,450 tech workers with these skills exist in the entire country. This competition is driving up salaries, and tech workers with AI skills now command salary premiums of over $35,000 compared to tech jobs overall.
In 2024, we estimate that U.S. employers allocated over $78 billion to salaries for employees with AI skills. Eventually, leaders will have to demonstrate the value of their massive AI investments. Amidst strong competition for AI workers, they will also have to take more cost-effective approaches to building their AI workforce, leveraging a mix of hiring, training, and other sourcing strategies.
AI Skills are Rapidly Evolving and Spreading to New Jobs
Organizations are under increasing pressure to apply AI to concrete, high-value use cases. This is leading firms to shift from AI tinkering to adopting more targeted applications of AI. At the same time, firms are emphasizing responsible and ethical uses of AI.
From 2023 to 2024, there has been dramatic growth in skills ranging from prompt engineering and generative AI to ethical AI and applied AI, with each growing well over 200% in just one year.
AI skills are becoming less concentrated in core tech roles. In early 2020, the share of jobs requesting AI skills outside of core tech roles hovered around 40%. By late 2024, it had jumped to around 55%. This means that most jobs requesting AI skills are no longer in traditional tech roles.
This is creating a new class of jobs that fuse together skills from AI and many other fields, such as marketing, finance, and legal. The problem is that when new skills are fused together from disparate domains there is no existing training infrastructure in place to equip workers with the new mix of skills. This creates headaches for reskilling and exacerbates AI talent shortages.
To combat this, organizations must take greater ownership of their AI training efforts. They first need to develop a clear understanding of the new skills AI requires them to build in roles across their organization. From there, they need to either build their own training or partner with a mix of training providers who each provide a piece of the broader AI training puzzle.
AI Jobs are Spreading Across the Country
Since 2019, the share of AI jobs demanded in the largest 15 tech hubs has dropped from 62% to 51%. This is creating more opportunities for workers in different locations, while forcing employers and training providers outside of tech-centric regions to reassess the skills their workers and students need.
Much of this geographic dispersion has been driven by remote job opportunities. In February 2020, remote opportunities accounted for only 4% of AI job openings, but recently remote job openings have been holding steady around 20% of all AI jobs. A software developer with AI skills in Raleigh, for example, commands an average salary over $45,000 less than a comparable worker in San Francisco.
The Path Ahead
Taken together, these trends underscore how the main story of AI's impact on the workforce has, thus far, been one of job creation, not destruction. Employers are demanding new AI jobs and skills, hiring costs are rising, and competition for AI talent is boiling up across the country. This is amplifying pressure on firms to mature how they hire, train, and retain their AI workforce, requiring a creative mix of talent development strategies.
The pace of change within the AI job market ensures it will remain a dynamic field for years to come. Both organizations and individuals must keep a consistent pulse on emerging workforce needs if they wish to remain resilient amidst an ever-present backdrop of AI-driven uncertainty.
