The CIPD’s Labour Market Outlook is a quarterly survey of more than 2,000 employers across the UK — over 100 in Scotland — on their pay, hiring, and redundancy intentions. This quarter’s report also explored the use of generative AI in organisations.

With skills shortages continuing to persist across Scotland, organisations are increasingly turning to technology by introducing or increasing automation to help bridge the gap.

However, the Outlook discovered that over a third (36%) of Scottish employers see privacy and security concerns as potential drawbacks to the use of GenAI. Only a fifth (20%) don’t think there are any potential drawbacks to their organisation from its usage.

It also revealed that 13% of Scottish employers have banned generative artificial intelligence being used, while a further 5% have plans to do similarly.

In response, the CIPD has urged employers to look at the benefits of AI, or risk being outpaced by the technology.

Marek Zemanik, senior public policy adviser (Scotland and Northern Ireland) at the CIPD, said: “Generative AI is here and is already changing the world of work, but our research shows a lot of Scottish employers are still hesitant to introduce it. Indeed, many may not even be aware that their employees are using it.

“Organisations need to embrace the opportunities of AI, while understanding the risks. This will ensure responsible and ethical use and understanding potential impacts on workforces, jobs and skills. Managed well, it stands to bring efficiency and productivity gains to many roles.

“Employers who are not proactive will soon find themselves outpaced by developments as this technology will continue to progress and reach into new areas of our working lives.”

Regarding those opportunities, two in five (41%) Scottish employers see increased organisational productivity and efficiency as generative AI-propelled advantages, and a third (31%) see enhanced decision-making and cost savings (30%) as benefits.

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While GenAI is increasingly being used by employers to help plug the skills gap, the Outlook also showed that the majority in the UK believe the technology won’t impact their organisation’s employment of full-time staff.

Specifically, over half (53%) who expect their organisation to introduce generative AI anticipate no change in the number of full-time staff employed as a result of introducing it over the next five years.

Meanwhile, a quarter (25%) think generative AI will in fact lead to more full-time jobs, and a slightly lower number (23%) think it will decrease the number of full-time roles.

Regarding employment more generally, the Outlook also revealed that 42% of Scottish employers report hard-to-fill vacancies, and that six in ten (64%) Scottish employers are planning to recruit in the next three months.