Bosses admit being too hasty in ditching staff for AI

Brand owners and their agencies are being warned to think twice before replacing staff with AI tools on the back of a new study which reveals most of those who have swung the axe end up regretting it.

According to the report by workforce planning platform Orgvue, “Human-First, Machine Enhanced”, nearly two-fifths (39%) of businesses have already made some employees redundant as a result of deploying AI, but nearly three-fifths (55%) think they made a mistake after the fact.

Orgvue’s survey of 1,000 C-suite and senior decision makers suggests leaders are now less concerned that AI will replace people in their organisation (48% compared to 54% in 2024), yet more than a third (34%) admit they have had employees quit as a direct result of AI.

Meanwhile, almost half (47%) of business leaders said that using AI without proper controls is one of their biggest fears, such that 80% plan to reskill employees to use AI effectively, and 51% say they are introducing internal policies to inform how AI should be used in the workplace.

Reskilling is considered strategically important in preparing the workforce for AI, so much so that 41% of organisations have increased their L&D budgets to ensure employees have the right training.

The lack of AI expertise was found to be one of the biggest barriers to the successful deployment of the tech, with 35% of organisations acknowledging this as their main challenge.

Even so, AI is likely to remain the dominant driver of workforce transformation, with 72% of leaders believing it will fuel significant change for at least the next three years, although one in four (25%) admit they do not know which roles will benefit most from AI, and 30% do not know which are most at risk from automation.

More than three-quarters (76%) of business leaders are confident their workforce will be taking full advantage of AI by the end of this year, although that figure is in stark contrast to the 27% of leaders who admit they do not have a clearly defined roadmap for AI, and the 38% that say they still do not understand the impact that AI will have on their business.

Orgvue chief executive Oliver Shaw said: “We’re facing the worst global skills shortage in a generation and dismissing employees without a clear plan for workforce transformation is reckless.

“Some leaders are waking up to the fact that partnership between people and machines requires an intentional upskilling programme if they’re to see the productivity gains that AI promises.

“While it’s encouraging to see investment in AI continue to grow, businesses need a better understanding of how the technology will change their workforce in the coming months and years.

“Questions remain unanswered over whether AI will yield enough return on investment in the near term to justify the costs associated with lost talent and downturn in productivity.”