Employers are increasingly turning to artificial intelligence to manage staffing shortages, redesign jobs and improve productivity, with many expecting their organisations to operate with fewer employees in the years ahead.
New research suggests AI is moving beyond experimentation and becoming a core part of workforce planning, as businesses look for alternatives to increasing headcount while continuing to meet demand.
The study, carried out by human resources and payroll services provider SD Worx, found that nearly two thirds of UK employers are actively exploring the use of AI in the workplace. The figure places the UK ahead of the European average and reflects growing pressure on organisations to do more with existing resources.
AI changes workforce planning
The research suggests workforce shortages remain a significant challenge. Two in five employers said they do not have enough staff to get work done, helping to explain why many are looking to technology to improve efficiency.
More than half of employers said AI and automation are already prompting them to redesign workflows and reduce the need for certain roles and tasks. Four in ten said they are increasingly relying on AI to drive productivity gains rather than hiring additional staff.
The study also suggests AI is beginning to influence longer term workforce planning decisions. Nearly half of employers expect their organisation to operate with a smaller workforce in future as automation becomes more widely embedded.
The impact is also being felt within HR departments. Some 44 percent of employers said they are already using AI-powered agents in HR, while the same proportion expect automation to reduce the size of HR teams within the next year.
Skills and governance move up the agenda
As organisations increase their use of AI, many are also investing in workforce development.
Just over half of employers said they are investing in reskilling and upskilling programmes to support an AI-enabled workplace. Half said they are redesigning HR operating models to improve collaboration between people and technology.
Many organisations are also attempting to address concerns around responsible AI use. Six in ten employers said they now have governance measures in place to ensure AI is used ethically within HR functions.
But challenges remain. Among employers not yet seeing significant results from AI investments, the most common obstacle was a lack of internal expertise. Others cited cultural resistance and difficulties aligning AI initiatives with wider business priorities.
Focus turns to workforce systems
The research suggests future investment is likely to focus on systems that support workforce decision making and performance management.
Reporting and analytics emerged as the leading priority for AI investment, followed by performance management and payroll. Workforce planning, scheduling and learning and development also ranked highly.
Bruce Fecheyr Lippens, Chief Human Resources Officer at SD Worx, said organisations were increasingly recognising that AI adoption requires more than simply introducing new technology.
“AI is no longer a future workplace discussion. It is already reshaping how organisations operate, manage people and plan for growth,” he said.
“What stands out in the UK is not just the pace of adoption, but the growing recognition that successful AI implementation depends on governance, workforce planning and investment in people alongside technology.”
He added that employers needed to understand where human oversight remained necessary as AI became more widely embedded across HR and payroll functions.
“Organisations that combine responsible AI governance with long-term skills planning will be much better placed to adapt as workplace expectations continue to evolve,” he said.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. He is a prolific author and contributor at Workplace Wellbeing Professional, with over 127 published posts covering HR, employee engagement, and workplace wellbeing topics. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers, and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
