There’s an interesting dichotomy arising in the employment market. On the one hand, businesses globally are navigating persistent talent shortages; on the other, AI is changing the nature of the work that this talent carries out. Employers are having to not only rethink how they attract and retain staff, but also how best to deploy those skills in the roles of the future.
A central pressure point in the shift is the widening gap between rising business demand and human capacity. In its 2025 annual Work Trend Index, Microsoft describes the emergence of the ‘frontier firm’ – organisations built around hybrid human-AI teams designed to extend productivity beyond traditional headcount limits.
The report, based on insights from 31,000 professionals across 31 countries, found that AI is reshaping workforce capacity by making ‘intelligence’ more scalable and less dependent on staffing levels. Over 80% of leaders said that they expect to adopt AI-driven tools within the next 12–18 months. In practice, this is already changing how employers operate, with companies redesigning roles around AI collaboration.
‘Reimagined rigid management structures have the potential to unlock greater value’
Meanwhile, employers are also faced with a more mobile and selective workforce. PwC’s Global Workforce Hopes and Fears Survey found real behavioural change in the labour market, with employees becoming more willing to move jobs and less likely to stay in roles that do not meet expectations around pay, flexibility and progression.
In response, organisations are having to expand flexible working models and increase investment in training, among other stronger retention strategies.
Experience gap
The situation is exacerbating the issue of the growing need for experienced workers and the shrinking availability of traditional entry routes into work. In its 2025 Global Human Capital Trends report, based on responses from nearly 13,000 business and HR leaders across 93 countries, Deloitte reports that 66% of managers and executives say most recent hires are not fully prepared, with lack of experience identified as the most common issue. Employers are responding by reshaping how talent is developed internally as traditional entry-level pathways become less reliable sources of future skills.
The structural challenge in building future talent pipelines highlighted in Deloitte’s report has intensified debate around long-term value creation in workforce strategy. ‘Yes, organisations can leverage advances in AI to drive value and improve the bottom line,’ says Karen Pastakia, global human capital practice leader and partner at Deloitte Canada. ‘However, the organisations that use it to identify and tackle emerging challenges create a better quality of life for workers, and reimagined rigid management structures have the potential to unlock greater value for all of their stakeholders.’
‘There is a need to look beyond the symptoms of unhealthy work to its root causes’
In response to these pressures, employers are shifting decisively toward skills-based hiring and redesigned management structures; and employees are increasingly pursuing non-linear career paths and expecting faster development and progression opportunities.
Healthy outlook
Meanwhile, although some aspects of job design are improving, a significant proportion of workers still report that work is negatively affecting their health.
Based on a survey of 5,000 UK workers, the CIPD’s Good Work Index 2025 finds that that 25% of employees feel their job negatively affects their mental health, while 24% report a negative impact on their physical health.
Employees experiencing poorer working conditions are more likely to leave and are increasingly unwilling to exceed basic expectations in high-pressure environments. In response, employers are increasingly investing in line-management capabilities alongside broader attempts to improve workplace support systems and addressing workload pressures at their root.
CIPD chief executive Peter Cheese says that with poor job quality affecting employees’ health, there is ‘a real need to look beyond the symptoms of unhealthy work to its root causes, including job design and workload management, lack of awareness or capabilities in good people management, and the supportive cultures needed to help people give their best.’
These interconnected dynamics require organisations to rethink how work is structured and experienced day to day. Redesigning roles and workforce strategies to cope with new tech and growing disgruntlement of a restricted pool of talent is a fast-growing imperative.
More information
See ACCA’s reports Career paths reimagined. The 2026 edition of ACCA’s research on global talent trends will be published in June.
