AI a priority, people and culture falling behind

A growing divide is emerging in leadership priorities among Australian executives, with AI adoption dominating the agenda while employees are increasingly overlooked.

This sharp deprioritisation of people and workplace culture has been highlighted in a new report, Executive Priorities for the Next Digital Workplace Era 2026, released by Staffbase.

The report provides an analysis of ASX 100 Executive Scorecards, combined with insights from more than 100 Australian business leaders, highlighting the cost of overlooking people and culture at the leadership level.

The data tells a compelling story in the sense that companies that exceeded their people and culture targets achieved annual revenue growth of 17.2 per cent. That’s nearly three times the index average of 5.7 per cent.

That suggests that executives focusing mainly on AI or technology while neglecting workforce engagement could risk undermining the performance gains that are needed to be successful.

The report showed that Australian executives have a primary focus on digital transformation over the next upcoming year and a half, with 18 per cent highlighting it as a key priority. This was closely followed by revenue growth (14 per cent) and innovation (11 per cent).

Meanwhile, the stark contrast is showcased through the fact that people and culture ranked towards the bottom, with just 6 per cent of leaders viewing the human touch as key to getting ahead, while only 2 per cent were focused on change management, despite unprecedented disruption.

While AI is expanding and ultimately aiming to make workers’ jobs more efficient, concerns are being raised by employees, with the report noting that 29 per cent of employees are most worried about AI jeopardising their job security, and not far behind was data and privacy issues, with 24 per cent raising this apprehension.

The report highlighted a tension in how leaders are approaching change, particularly as organisations accelerate digital transformation while navigating the human impact of that shift.

Ramak Salamat, regional vice president – JAPAC at Staffbase, said: “Australian leaders are optimistic about AI and digital transformation and rightly so. But the data makes clear that the organisations [that] will win in the next era of work are those who bring their people along for the journey, leading with empathy and care.”

The findings indicated that 33 per cent of Australian executives primarily rely on data-driven decision making, while 23 per cent described themselves as empathetic or people-centric leaders.

While employee engagement, trust and culture are all fundamental aspects that are critical to success in a business, Salamat exposed the emphasis that leaders have on AI, noting that, “AI and data accuracy are top of mind in transformation projects, while clear communication with staff is an afterthought”.

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