Generative AI is coming for your job—or making it better?
The Bank of Israel says the future of work depends on how employees adapt.
A new report by the Bank of Israel expresses concern that the widespread adoption of artificial intelligence in the coming years will lead to a decline in the number of employees, along with significant changes in various roles. The primary driver of this transformation will be the integration of generative AI (GenAI).
The report indicates that in the public sector, about two-thirds of employees work in professions where GenAI may serve as a complementary tool. Broad integration of GenAI in this sector will require technological advancements, employee training, and adjustments to labor agreements and regulations, all of which could enhance efficiency. While GenAI is expected to generate new demand in high-tech industries, it may also reduce the need for many technological workers by automating substantial portions of their tasks. As a result, professionals in technology-related fields will need to update their knowledge and adapt to evolving market demands.
The report categorizes the professions affected by AI into three groups:
- "Replaceable" professions – Roles where a high percentage of tasks can be performed using generative AI. These include customer service representatives, general clerks, sales workers, and travel agents. Demand for these professions is expected to decline significantly as AI adoption expands.
- "Complementary" professions – Roles characterized by tasks that require creative thinking, problem-solving, and strategic planning (e.g., engineers and scientists), demand unique human qualities such as responsibility and judgment (e.g., lawyers and judges), or involve personal interaction (e.g., teachers and doctors).
- "Neutral" professions - Manual labor that is not substantially affected mainly in "blue-collar" fields, such as construction workers, agricultural workers, and unskilled workers. This is as long as they are not supplemented by robots.
The report also highlights the sectoral distribution of AI-exposed professions. Nearly half of those in complementary professions work in the health and education sectors. Meanwhile, about half of those in replacement professions are concentrated in three industries: commerce, professional and financial services, and insurance. In the technology sector, most employees in AI-exposed roles work in high-tech, with 61% employed in high-tech services and about 25% in high-tech manufacturing.
There is a growing perception in the industry that AI will disrupt or even eliminate the roles of programmers and software testers. However, the report's authors argue that this is unlikely. Instead, they believe that the increased use of AI will actually drive greater demand for these workers—though it will also require them to continuously update their skills to meet shifting market needs. As a result, technological professions currently categorized as "replacement" may be more closely aligned with "complementary" roles, with reskilling being the primary challenge for workers in these fields.
The report concludes that the transition to a new labor market equilibrium will take time. To minimize harm to employees while maximizing the benefits of AI adoption, the Bank of Israel recommends comprehensive workforce training programs to help employees adapt to these changes.
