Productivity pressures emerge as biggest business threat

As employers look beyond technology to combat modern-day operational difficulties, new data signals that change is already underway for Australian businesses.

Productivity pressure has beaten out AI, economic uncertainty, geopolitical and regulatory risk, business reinvention, and financial governance as the defining challenge for business leaders.

According to experts, this ranking suggests employers are examining where productivity stems from in 2026 and putting greater focus on balancing employee wellbeing with metrics.

The CEO Institute’s chief executive, Richard Wynn, said: “CEOs are no longer treating productivity as a technology problem to be solved with a new tool. They’re asking much harder questions about how work is designed, how decisions get made, and how much capacity their people actually have left.”

“The risk is assuming the answer is to push people harder, when many teams are already dealing with burnout, disengagement and overloaded managers.”

As recently reported, research from ELMO has highlighted that AI-enabled productivity boosts are no longer advantaging employees; and in fact, they are only raising productivity expectations and demand.

However, workplace psychologist Dr Amantha Imber said the most valuable use of AI-enabled productivity is not squeezing more output, but “better thinking, stronger client relationships, learning, collaboration and higher-quality work”.

This, she said, is where “AI starts to feel genuinely useful to both employees and employers”.

Tracking recurring themes in discussions among the CEO Institute’s 1,027 members in Australia and New Zealand, the study revealed that employers are discovering answers to workplace design beyond technological solutions.

Wynn noted that many employers mistakenly focus purely on AI, efficiency or cost-cutting when considering productivity, adding: “those things matter, but they will not fix poorly designed work”.

He said: “The clearest message from leaders is that productivity has to start with the work itself: what creates frustration, what adds time but little value, and what stops people [from] doing their best work.

“Leaders should focus on clearer priorities, fewer low-value meetings, stronger manager capability and systems that help people perform, rather than adding more noise.”

“The next productivity frontier is not how much more we can get out of people. It is how much wasted work we can take out of their way.”

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