University Preferences in the Age of Artificial Intelligence

Ussal Sahbaz
4 min readJul 31, 2024

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Since October 2023, Klarna, one of Europe’s largest fintech companies, has not made any new hires. While the sector experienced layoffs post-pandemic, it is not currently in crisis. The real problem is that Klarna has recognized that artificial intelligence can replace many jobs currently performed by people. These early signs in the employment market need to be closely monitored, as the labor market, especially for educated white-collar workers, is about to be reshaped. Some of us still need to take precautions. However, reading this article carefully is beneficial for those whose university exam results were announced this week (and their parents).

Klarna has seen that thanks to ChatGPT, customer satisfaction has increased, and the need for employees has decreased in services including call centers and chatbots. They have calculated that their personnel needs will decrease by 20% annually due to the AI technologies they have developed.

Klarna has over 5,000 employees. On average, an employee stays with the company for 2.8 years. Based on this, Klarna says that even if they don’t lay off anyone, they can reduce their workforce to the desired level by not hiring replacements for those who leave due to the natural flow of life each year. It is well known that laying off workers in Europe is not easy.

Meanwhile, there are interesting dynamics in the labor market. Although labor demand decreases in certain areas, finding employees for jobs requiring white-collar staff is not easy. This also affects promotion and salary dynamics. Take a look into the Turkey’s technology sector: Last week, Melon and Endeavor Turkey published their regular report on salaries in the technology sector, which collects data from Klarna-like companies operating in Turkey. Results are exciting: The wage difference when moving from an entry-level role to the next level has decreased by 23% compared to the previous year. In contrast, the salary difference when moving to the highest level has increased by 11% compared to the last level. In other words, the salaries of new graduates in technology companies are rising, and there is also an increase at the top levels.

There could be two reasons for this situation concerning new graduates: The first and simplest reason is that the increase in living costs is reflected in salaries. If new graduates, especially those who wish to rent a house, a desire that is increasingly impossible in Istanbul, have similar fixed costs compared to senior employees. As I wrote on March 1, the second reason is that AI applications like ChatGPT relatively increase the productivity of the least experienced and skilled employees. Thanks to AI, they can immediately access corporate memory that they might have learned over years of working. Of course, this is if they are capable of using AI well!

So what will happen? Likely, the number of positions open for new graduates will decrease. However, those who somehow find a position will have the opportunity to rapidly advance within the company thanks to new AI technologies. In a report released at the Davos summit in January, Oliver Wyman predicted that entry-level jobs and first-level managerial positions would rapidly converge due to the spread of AI. This convergence could mean new opportunities for growth and advancement. Is this good or bad? According to the same report, the new generation called GenZ is quite anxious. In the study, 72% of them said they were worried about the impact of AI on our jobs. This rate is 53% in GenX (this might be my generation) and 40% among Boomers.

No matter which university you enter, finding a job after graduation will not be as easy as it used to be. Therefore, it’s important not to view university as a vocational school. In my opinion, the most significant impact of a university is its “brand.” If you enter a good school and a good department within that school in Turkey, you signal that you are wise by showing that you received a high university entrance score and gain access to that school’s network. These dynamics make it relatively easier to access a limited number of good jobs.

Another topic is the ability to step out of your comfort zone. This will also be an essential feature in the age of AI. Those who remain tied to their comfort zone are more likely to lose their jobs to AI. I studied in Ankara, the city where I was born and raised. If I knew then what I know now, I would have gone to university in another town. It’s the right thing to do to enter new environments and build self-confidence.

Lastly, even if you have a place like a pharmacy, law office, or family business inherited from your parents, step out of your comfort zone and look for other opportunities. But don’t see returning to these places as a failure. In the age of increasing inequalities AI brings, your assets will always be valuable. It’s essential to take good care of them.

This article is a translated version of “Yapay zekâ çağında üniversite tercihleri ” which was initially published in Economic Daily (Nasıl Bir Ekonomi Gazetesi) on July 19, 2024.

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