New findings underscore need to invest in people amid AI transformation at work
The majority of Australian chief executive officers are expecting skills shortages to become a bigger barrier to growth in the future, according to a new report, as artificial intelligence reshapes roles and the capabilities that employees need.
The latest EY-Parthenon CEO Outlook Survey, which included 60 Australian business leaders, found that 72% of them are expecting access to skills to become a greater barrier to future growth than access to capital over the next three years.
The concern comes as 70% of Australian CEOs expect AI to have a greater impact on roles, skills, and how work is organised, slightly more than the 67% of CEOs who believe they can achieve long-term growth with a smaller workforce.
Despite this concern, only 18% of business leaders said they are using productivity gains to fund workforce reskilling and capability building.
EY-Parthenon Oceania Leader Shannon Cotter has underscored the need to match the investment made in technology with investment in people, as the workforce impact of AI will "extend well beyond changes in employee numbers."
"Technology investment must be matched by investment in people so employees can use AI effectively and organisations can redesign roles and ways of working," Cotter said.
"Without those capabilities, businesses risk applying AI only to existing processes rather than using it to create new value."
Workforce gaps haunt CEOs
Workforce capability gaps are already the third-highest concern among Australian CEOs for their organisations over the next 12 months, as cited by 37% of the EY respondents.
Topping their list of concerns is regulatory and policy certainty (42%), followed by macroeconomic volatility (40%).
Geopolitical uncertainty, which was the top concern of CEOs in May, saw a sharp drop in attention as just 33% of CEOs identified it as a significant pressure facing their organisation.
"Geopolitical uncertainty remains part of the operating environment, but business leaders are concentrating more heavily on the issues they can address directly," Cotter said.
"Regulatory settings, economic volatility, and workforce capability are becoming more immediate considerations as leaders decide where to invest and how to position their businesses for growth."
Oversight gaps on AI ROI
So far, only 37% of Australian CEOs rank AI-enabled tools as one of the leading contributors to productivity gains over the past 12 months.
Just 58% said they can confidently assess the return on AI investment, leaving the rest unable to do so with confidence.
"Lacking oversight of AI impact makes it difficult to distinguish promising applications from those that are unlikely to deliver meaningful value," Cotter said.
She advised CEOs to define the business problem, establish how returns will be measured, and determine which applications merit continued investment at scale.
"Businesses need clear measures of success so they can make informed decisions about where to continue investing, what to scale, and when to change course," Cotter added.
