Manager effectiveness is changing fast and HR must catch up

The definition of an effective manager has fundamentally changed in 2026, and most organisations have not caught up.

That is the shared warning from two of Australia's foremost voices on management and leadership, backed by new research showing that the human-centric model that carried workforces through the pandemic is now actively working against business performance.

Jonathan Tabah, director analyst in the human resources (HR) practice at Gartner in Sydney, has been tracking a significant and measurable shift in what drives manager effectiveness.

His firm's research shows that 47 per cent of managers report increased expectations placed on them, and 66 per cent say they prioritise managing people on their teams above driving progress towards organisational goals and priorities.

"What makes a manager successful now is quite different than what made a manager successful a couple of years ago, because the environment and the business need has changed so rapidly," Tabah said.

"The message hasn't cut through. Your chief executive officer knows it, your chief financial officer knows it, probably your chief human resources officer knows it too. But as you start getting a couple of layers down in the organisation, that message has not cut through yet."

The post-pandemic management hangover

Tabah traces the problem back to the pandemic, when organisations adopted a human-first philosophy to hold their workforces together. Staff banded together through the crisis, performance held better than expected, and the great resignation that followed reinforced the message: support the whole person, or risk losing your best people. The approach worked. The problem is it has not been updated since.

"Managers and employees still think they are operating in the human-centric environment of the pandemic or post-pandemic work arrangement," Tabah said. "And they're not."

Gartner's data shows the average manager now spends nearly one-quarter of their working time engaging with employees on personal and emotional issues – a figure that points to both a productivity problem and a management burnout crisis.

Tabah noted that manager burnout levels are now higher than they were during and after the pandemic, precisely because many feel personally responsible for the wellbeing of every individual on their team.

The consequence, Tabah argues, is that managers are making decisions that benefit employees at the direct expense of the enterprise. Almost half of managers now tell Gartner they are prioritising the requests of their staff over the needs of the business.

The way forward is a shift from counsellor to performance coach – where feedback becomes more direct and centred on goal achievement, and managers are evaluated not just on engagement and retention metrics but on their contribution to organisational outcomes.

"Is their job to keep people happy, or is their job to drive the business performance through those people?" Tabah said.

"The pendulum just swung very heavily in one direction during the pandemic and post-pandemic environment to an aggressive human-first environment. In today's business environment, a purely, exclusively human-centric approach to what it means to be a manager will actually have a negative impact – for the business and for the manager themselves."

Unbossing, AI, and the case for middle management

The pressure on managers is not just internal. The rise of artificial intelligence (AI) has intensified a public debate about whether the middle manager tier is obsolete – a concept that has gained the shorthand "unbossing."

The term refers to a growing argument that AI can now handle the coordination, scheduling, and administrative functions that traditionally justified management layers. In early 2026, high-profile restructures at Block, WiseTech Global, and Atlassian placed that argument in sharp relief across Australian boardrooms.

The data behind the narrative is real. In the United States, job postings for middle managers fell 42 per cent from their 2022 peak to late 2025, according to workforce analytics firm Revelio Labs.

As HRD Australia has documented, the so-called great flattening of management layers is already costing organisations more than they bargained for, with research showing that 37 per cent of employees say the absence of managers has left them feeling directionless.

A March 2026 study by Anthropic examined AI's potential impact across occupational categories, and Professor Clinton Free of the University of Sydney applied the findings to Australia's workforce – concluding that management occupations sit at 92 per cent theoretical exposure, translating to more than 1.5 million Australian management roles potentially affected.

Sam Bell, CEO of the Institute of Managers and Leaders Australia and New Zealand (IML ANZ) in Brisbane, pushes back firmly on the more extreme versions of that argument. IML ANZ's April 2026 Adaptive Leadership in the AI Era report makes the case that the unbossing narrative is, at best, a partial picture.

"AI is not replacing managers, it is reshaping what management means," Bell told HRD. "The challenge is adaptive, not technical."

The whitepaper points to a critical counterweight: Jobs and Skills Australia projects management roles across the Australian economy will grow by 14.9 per cent to 2035 – an increase of approximately 279,600 positions.

The sectors driving that growth – aged care, community services, state government – are precisely those where human-to-human interaction and empathy-driven decision-making remain irreplaceable.

In occupations where experience commands the highest wage premium, AI exposure is associated with positive wage growth. The market is already pricing in what the unbossing thesis ignores: experienced human judgement becomes more valuable in the presence of AI, not less.

What Google's failed experiment still teaches us

Both Bell and Tabah invoke Google's Project Oxygen as a proof point that remains as relevant today as when the experiment was first conducted. In the early 2000s, Google attempted to eliminate management roles entirely, convinced that engineers were best left to their own devices.

The experiment lasted only months. Employees went directly to founder Larry Page with expense questions, interpersonal conflicts, and day-to-day problems the founders had no capacity to resolve.

"The CEO was signing off on expense claims and approving things that were so minor to Google that it took all the attention away at an executive level," Bell said.

"And those skills that they identified are still true today – being a good coach, empowering your team and not micromanaging, expressing interest and concern for team members' success, making sure that the team is productive and results-oriented, being a great communicator."

Google's subsequent Project Oxygen research identified eight attributes of effective managers, and all eight were fundamentally human capabilities. Technical skills ranked last.

"AI is not going to help with that," Bell said. "Is actually sitting down with someone – where do you want to go in your career and how can we help you get there?"

The IML whitepaper frames this through the lens of what it calls the Jevons Paradox: the historical pattern in which greater technological efficiency drives up total demand rather than reducing it.

The Australian legal sector offers a recent example – law firm Allens increased non-partner fee-earners by 11 per cent to a record 1,078 while deploying more than half a dozen AI tools. Across the Australian Financial Review Law Partnership Survey, 70 per cent of 53 firms increased lawyer numbers, even as AI dramatically accelerated the pace of individual tasks. AI did not shrink the profession. It created more complex work requiring more human oversight.

What HR leaders must do now

For Australian HR leaders, the practical implication is direct. Organisations that cut headcount in anticipation of AI productivity gains are, Bell warns, making a strategic error.

"The mistake executives are making right now is they're anticipating an improvement in productivity as AI streamlines the processes, and so they are releasing or reducing staff in anticipation of that outcome," Bell said. "That is a mistake. They should not do that."

Innovation requires trial and error – it is inherently inefficient. Cutting staff before that cycle matures simply slows the productivity gains organisations are chasing. At a CEO roundtable Bell hosted recently, none of the attending service-based businesses reported removing staff because of AI.

What they were doing instead was augmenting position descriptions: identifying tasks AI could absorb, reconfiguring roles around those efficiencies, and redeploying the time saved into higher-value work.

The IML whitepaper identifies six priorities for HR and learning and development (L&D) leaders navigating this shift – among them, building checkpoints into AI-driven decisions, designing governance for iteration rather than permanence, and deliberately capturing freed capacity to invest in human capabilities AI cannot replace.

Critically, a February 2026 National Bureau of Economic Research paper surveying nearly 6,000 senior business executives across the US, UK, Germany, and Australia found that more than 90 per cent reported no impact of AI on their firm's employment and 89 per cent reported no impact on labour productivity over the past three years. The tools may work. The capability to extract value from them remains the unsolved challenge.

Tabah's message to HR leaders is that productivity is now the defining organisational priority, and HR has a responsibility to ensure that message reaches every level of the workforce.

"Our job in HR is to provide a workforce that can help the business achieve its goals," he said. "If we aren't helping the workforce adapt to those new objectives and new outcomes that the business is trying to achieve, we will fail in that goal."