Nearly one in four CHROs expects artificial intelligence to reduce workforce headcount by up to 20 per cent over the next two years, highlighting growing uncertainty around jobs even as organisations accelerate AI adoption.
The report says that about 13 per cent of employees remain in the high-burnout category. The findings point to a workplace undergoing several changes at once, with AI adoption, generational shifts and evolving employee expectations reshaping how organisations manage their people.
AI is increasingly being deployed across functions rather than remaining limited to experimentation. However, its adoption is also creating differences in how employees perform and adapt.
Around 44 per cent of CHROs said a key concern is that high-performing employees are using AI to increase their advantage, while others are struggling to keep pace. This is creating a new workplace divide based on employees’ ability to use AI effectively.
There are also concerns around trust and accountability. About 32 per cent of CHROs said employees remain unsure about which AI-generated outputs need verification and which can be relied upon.
Job security is emerging as another concern. Nearly 25 per cent of CHROs anticipate a 1–20 per cent reduction in workforce headcount because of AI over the next two years. At the same time, almost 45 per cent said it is too early to determine the technology’s long-term impact on workforce size.
The uncertainty is also affecting managers and employees. About 21 per cent of managers are unsure how performance should be evaluated in an AI-enabled workplace, while 26 per cent of employees feel that leadership is not adequately addressing concerns around job security.
While burnout has improved from earlier levels, the progress appears to have stalled. The proportion of employees experiencing medium burnout has declined from 21 per cent in 2019 to around 15 per cent currently, while about 72 per cent fall into the low-burnout category.
However, around 13 per cent continue to experience high burnout, with overall burnout levels remaining broadly stable between 2022 and 2026.
At the same time, younger employees are becoming a larger part of the workforce. Gen Z now accounts for 26 per cent of the workforce, nearly twice its share in 2023.
Their expectations are also influencing workplace policies. About 81 per cent of CHROs identify flexibility as the top workplace priority for Gen Z, compared with only 8 per cent for Gen X and older generations.
The study also points to a decline in discretionary effort. It has fallen 4 per cent since 2023, with six in 10 organisations reporting a year-on-year decline.
This suggests that while employees may continue to meet their formal responsibilities, fewer are willing to consistently contribute beyond what their roles require.
Nearly 58 per cent of CHROs said they are dealing with the combined challenge of AI adoption and generational differences.
For organisations, the challenge is, therefore, extending beyond simply introducing new technology. They will also need to give employees greater clarity around changing roles, career opportunities and performance expectations while addressing burnout and maintaining trust.
As AI reshapes jobs and ways of working, the ability to balance technology adoption with employee confidence and meaningful work could become increasingly important to workforce strategy.
