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Impact of Generative AI Adoption on Higher Order Skills in the Workplace

Generative AI Adoption and Higher Order Skills

By Piyush Gulati, Arianna Marchetti, Phanish Puranam, Victoria Sevcenko

DOI https://doi.org/10.48550/arXiv.2503.09212

Abstract

We study how Generative AI (GenAI) adoption is reshaping work. While prior studies show that GenAI enhances role-level productivity and task composition, its influence on skills – the fundamental enablers of task execution, and the ultimate basis for employability – is less understood. Using job postings from 378 US public firms that recruited explicitly for GenAI skills (2021-2023), we analyze how GenAI adoption shifts the demand for workers’ skills. Our findings reveal that the advertised roles which explicitly rely on GenAI tools such as ChatGPT, Copilot, etc., have 36.7 percent higher requirements for cognitive skills. Further, a difference-in-differences analysis shows that the demand for social skills within GenAI roles increases by 5.2 percent post-ChatGPT launch. These emerging findings indicate the presence of a hierarchy of skills in organizations with GenAI adoption associated with roles that rely on cognitive skills and social skills.

Overview

The paper investigates how the adoption of generative artificial intelligence (GenAI) is changing the nature of work—not just at the level of individual tasks or job roles, but in terms of the underlying skills workers need. By studying job postings from 378 U.S. public companies between November 2021 and November 2023, the authors explore how roles that explicitly use GenAI tools (such as ChatGPT and Copilot) differ in the skills they require compared to other roles.

Key Objectives

  • Understanding Skill Shifts:
    The paper asks: How does GenAI adoption impact the demand for worker skills? This question is examined by comparing the skill requirements in roles that use GenAI to those that do not.

  • Focus on Higher-Order Skills:
    The study specifically looks at how GenAI roles demand more advanced “higher-order” skills, which include:

  • Cognitive skills: Abilities such as problem-solving, critical thinking, and analytical reasoning.

  • Social skills: Abilities related to communication, collaboration, and teamwork.

Data and Methodology

  • Data Source:
    The research is based on over 7 million job postings from 378 U.S. public firms. The analysis identifies 6,522 job postings that mention GenAI skills or related keywords (e.g., “ChatGPT”, “Generative AI”, “Large Language Model”).

  • Measurement of Skills:
    Using a skill taxonomy (a structured way to group skills) based on previous work by Deming and Kahn (2018), the authors measure the intensity or frequency of certain skills mentioned in job postings.

  • Analytical Techniques:

    • Comparative Analysis: The skill levels in GenAI roles are compared against similar roles in the same job type or occupation.

    • Difference-in-Differences (DID): This method compares changes over time—in this case, before and after the launch of ChatGPT (November 2022)—to understand how skill demands have shifted.


Main Findings

  • Higher Demand for Cognitive Skills:
    • Key Point: Roles that rely on GenAI tools require approximately 36.7% more cognitive skills compared to other roles.
    • Explanation: Cognitive skills involve mental processes like analyzing information and solving problems. The adoption of GenAI appears to enhance the need for these higher-order thinking skills.
  • Shifts in Other Skill Categories:
    • Reduced Emphasis on Some Skills:
      • Customer Service Skills: Lower by about 53%.
      • Financial Skills: Lower by about 49.2%.
      • Self-Management Skills: Lower by about 58.6%.
    • Interpretation: As GenAI takes over routine or less complex tasks, the roles become more focused on skills that require deeper thought and complex reasoning.
  • Increase in Social Skills Over Time:
    • Key Point: After the launch of ChatGPT, the intensity of social skills in GenAI-related roles increased by 5.2%.
    • Explanation: Social skills here refer to the ability to work well with others. This increase suggests that even as technology automates certain tasks, the human ability to collaborate and communicate remains crucial—possibly because GenAI tools often augment rather than completely replace human work.

Discussion and Conclusion

  • Hierarchy of Skills:
    The research supports the idea that as organizations adopt GenAI, there is a clear hierarchy in the skills required. Roles that use GenAI are increasingly demanding higher-order cognitive and social skills while reducing the need for more routine skills like self-management or customer service.

  • Implications for Workers and Policymakers:

    • For Workers:
      Those looking to thrive in a GenAI-augmented workplace should focus on developing advanced problem-solving and interpersonal skills.

    • For Organizations and Policy:
      Reskilling initiatives and training programs should prioritize cognitive and social skills to prepare employees for the changing nature of work.

    • Broader Impact:
      The study contributes to our understanding of technology adoption by shifting the focus from just tasks or roles to the very skills that underpin work. It shows that technology not only changes what we do but also the way we need to think and interact in the workplace.

Final Thoughts

In simple terms, the paper shows that while GenAI tools can handle routine or straightforward tasks, they also push workers to use more advanced thinking and interpersonal skills. This means that as companies adopt these tools, there is a growing importance for workers to enhance their problem-solving abilities and collaborate effectively with others. The findings are especially relevant for guiding training programs and helping workers adapt to an increasingly digital and automated work environment.

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