Restructured workplaces in the age of AI

While AI is causing a ripple effect of redundancies in the workplace, avoiding the tough conversations around the changing nature of work only allows fear and disengagement to fester, one expert has explained.

While a small difference to some, according to Neal Woolrich, HR advisory director at Gartner, the distinction between AI replacing jobs and it instead transforming work systems is everything.

This distinction is central to managing employee anxiety around job certainty and retention.

With recent Gartner research finding that only 1 per cent of job losses are due to AI productivity gains, but rather different skills requirements for employees, job uncertainty and skills shortages remain critical issues in the workplace – both of which HR managers can rectify.

According to Woolrich, having conversations around the reality of AI in the workplace can “filter out the noise that can build up over time in employees’ minds” and clarify how a workforce is being repositioned.

Woolrich noted a difference in contemporary redundancy layoffs as AI adoption becomes rampant. While previous economic downturns saw a moderate, safe approach that saw multiple stages of layoffs, “this time, from what I’ve observed, a lot of organisations are trying to get redundancies in one hit rather than a staggered approach”, he said.

As recently reported by HR Leader’s sister brand, Cyber Daily, major software firm Atlassian announced it will be axing roughly 1,600 employees. And while it claimed that AI has reduced the need for these workers, CEO Mike Cannon-Brookes also noted: “Our approach is not ‘AI replaces people.’ But it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas.”

He added: “This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future.”

For Woolrich, the solution is also more complex than just replacement.

Looking at patterns from the previous year, he noted that “AI is not delivering the productivity gains that organisations have been hoping for. There is [a lot] of uncertainty when we will turn the ship around.”

He also explained that, while there haven’t been signs of redundancy regret from Australian organisations, it’s a question “that can’t be answered yet”. However, according to Woolrich, this may be different in 12 to 24 months.

It remains true, however, that as Australian organisations continue to announce large-scale redundancies, the cultural toll becomes heavier. As Woolrich explained, a ripple effect is created across employee experience and trust, and this most often shows up as emotional fatigue and anxiety, two of the biggest drivers of engagement and performance.

For HR leaders, Woolrich recommends shifting focus from the workforce to how the work will be different and supporting employees accordingly.

He said: “After a restructure, employees need leaders who are prepared to acknowledge emotional reactions, address uncertainty and clearly reset expectations around the work itself.”

This also includes identifying opportunities for reskilling and upskilling within the remaining workforce to allow employees to stay competitive and be engaged in the process.

Without turning attention to remaining employees, acknowledging the different environment and having the difficult conversations, and managing AI expectations, organisations will not achieve their restructuring goals, nor will they retain happy employees.