Millennial business leaders are emerging as key drivers of skills-based strategies and AI integration in response to growing concerns over future workforce shortages, research shows.
A cross-generational analysis, part of The Global State of Skills study released by AI platform Workday, found that 60 percent of millennial leaders (aged 28 to 43) anticipate a skills shortage within the next three years. While 47 percent of Gen X leaders (aged 44 to 59) expressed similar concerns, millennials are taking a more proactive stance.
According to the report, 92 percent of millennial leaders consider skills-based talent development essential for economic growth, compared to 76 percent of their Gen X counterparts.
While there is alignment between generations on the importance of digital capabilities such as digital literacy and generative AI, generational differences were found in other areas. Gen X leaders are more likely to prioritise operational and technical expertise, including project management and engineering. In contrast, millennials give greater importance to leadership and communication skills.
The shift towards skills-based models comes as organisations attempt to manage talent challenges and maintain agility amid ongoing technological change. Both age groups recognise the potential of AI and data in identifying and predicting future skills needs.
Skills strategies to support social and economic goals
Beyond business performance, the research shows that millennial leaders also see skills-based approaches as a means to address broader societal challenges. Among millennial respondents, 89 percent believe such strategies can help close productivity gaps and equalise access to employment opportunities. A further 82 percent said it could support diversity and inclusion initiatives and 74 percent said it could reduce unemployment. These views were also shared by Gen X leaders, although to a lesser extent.
However, despite general optimism about the role of AI in accelerating these changes, some millennial leaders raised concerns about execution. Thirty-four percent said their organisations lacked clarity on how to apply AI to address talent challenges, compared to 14 percent of Gen X leaders. This suggests that while appetite for AI is strong, practical implementation remains a concern.
Workforce transformation and generational leadership
The findings also reveal that most business leaders believe their organisations are already moving towards skills-based workforce models. Ninety-two percent of millennial leaders and 86 percent of Gen X leaders said their organisations were successfully transitioning. Additionally, 90 percent of millennials and 83 percent of Gen X leaders supported hiring practices based on validated skills profiles rather than traditional credentials alone.
Prasun Shah, Global CTO and AI Lead, Workforce Consulting at PwC, said, “Skills are now a strategic asset, not a side conversation. Successful AI adoption depends on an organisation’s ability to reskill at scale, align workforce strategies with business goals and design work where people and AI complement each other.”
When it comes to driving internal change, generational differences remain. Millennial leaders are more likely to emphasise change management as key to transformation success. Gen X leaders are more inclined to focus on communication of business benefits and strategic goals. The research points to the need for organisations to tailor change strategies across different leadership demographics to maintain alignment and momentum.
Senior business leaders across sectors agree that aligning people, processes and leadership is essential to successful skills transformation. Daniel Pell, Vice President and Country Manager, UKI at Workday, said that the UK workforce is not evolving quickly enough to keep up with technological change.
“To compete in an AI-driven economy, businesses must rethink how they identify and develop skills. This is not a question of technology alone, it is a question of leadership, agility and long-term competitiveness.”