“Lower-Value Human Capital”: How Not to Introduce AI at Work

Unless your name is Jamie Dimon, making the front page as a bank boss usually means you fucked something up. Just ask Bill Winters. The chief executive of Standard Chartered recently announced plans to cut 15% of his back-office staff over the next four years.

The layoffs were bad enough, but four words caused a proper uproar: he talked about replacing “lower-value human capital” with machines. His PR disaster highlights a massive problem for today’s managers. How do you talk about AI without making your team feel like obsolete parts on an assembly line?

What happens when workers fear the AI takeover?

Bosses want staff to use AI to speed up work and beat the competition. The staff, understandably, are less thrilled. They see the benefits, sure, but they also see the axe swinging toward their necks. Even if we have not seen massive job cuts yet, a fierce backlash is already under way.

This dread has even earned a catchy acronym: FOBO, or the “fear of becoming obsolete.” You can see it everywhere. American university graduates recently booed guest speakers who praised the technology. Over at Meta, a departing employee went viral by singing about the company’s AI obsession to the tune of American Pie, mourning the death of professional pride.

Living under the job insecurity is miserable. A 2019 study from Stockholm University showed that job insecurity ruined employee health and kills job satisfaction. It is bad news for companies, too. Some tough-talking managers might think a little fear keeps workers on their toes. In reality, scared staff simply perform worse.

Can a good boss stop the panic?

A bit of trust goes a long way. Researchers at the University of Leicester looked at data from over 16,000 British workers across 1,100 organisations. They found that cuts to working hours naturally caused workers to lose loyalty to the firm. However, that anger faded significantly when staff believed their bosses were honest, reliable, and fair.

In short: if your team trusts you, they will weather the storm with you. If they think you view them as numbers on Excel, panic sets in immediately.

Where did Standard Chartered go right, and wrong?

On the trust front, Mr Winters got his phrasing horribly wrong, even if his actual plan had merit. Calling people “human capital” sounds like bad science fiction. Nobody raises a glass at a retirement party and says, “We will really miss your human capital.” Dividing your staff into high-value and low-value buckets is an insult, no matter how you spin it.

His clumsy words also missed a basic truth about technology. Some jobs are certainly easier to automate than others, especially repetitive tasks that do not need a human touch. But you cannot neatly label vulnerable jobs as “low-value.” Just look at software engineers. Highly paid coders are firmly in the firing line today because AI writes code surprisingly well, and because tech giants need to slash salaries to pay for all their new servers.

If you look past the dreadful corporate speak, however, Mr Winters actually did something right. He outlined a proactive scheme to reskill affected back-office staff so they could stay at the bank.

How should leaders prepare their staff for tomorrow?

Preparing your team for the shifting labour market is the absolute best way to keep their trust and hold on to valuable talent. Sometimes, this means teaching staff entirely new skills so they can step into safer roles. Singapore’s DBS Bank did exactly this when it retrained customer service agents to become relationship managers. At the very least, it means providing plenty of hands-on training with the new AI tools.

Nobody truly knows how AI will reshape the world of work in the long run. Companies and their staff will always have different priorities, and governments will ultimately have to clean up the wider economic mess. But business leaders can stop the panic right now. They simply need to tell their workers which skills will remain valuable, and then help them learn those skills. If you want people to embrace the AI revolution, you must help them prepare for it first.