AI spending won't fix productivity without leadership change: report

HR professionals might want to audit their organization's incentive and approval structures to see if they still reward "the old way of working" is holding back productivity gains from artificial intelligence adoption.

That's because BDO Canada's Productivity Paradox 2026 report found that only 18% of organizations have embedded AI into daily workflows and operations. Another 46% are experimenting with AI tools but have achieved no meaningful return on investment, while 26% are still modernizing core systems such as cloud platforms and ERP software. 

Nearly 3 in 10 (29%) organizations have delayed major investments due to economic uncertainty, citing margin pressure, revenue volatility, workforce costs and regulatory complexity as leading risks over the next year.

HR departments could be exposed to liability, privacy, and workplace-fairness risks from autonomous AI agents already operating inside their organizations without clear ownership or oversight, according to recent research.

Leadership, not tools, identified as core barrier

BDO Canada's report – based on a survey of 520 Canadian business leaders in April 2026 – states that organizational inertia, including layered approvals, fragmented ownership and siloed functions, is limiting the productivity benefits organizations might otherwise see from AI adoption.

"Organizations are trying to solve the future of work while still looking through the rear-view mirror," said Sonia Edmonds, Key Account Partner at BDO Canada, in the report.

Edmonds also linked the problem directly to incentive design, a core HR responsibility. "Organizations can't expect people to change how they work if they're still rewarding them for working the old way," she said.

Jeff Chapman, Managing Partner, Advisory at BDO Canada, said no single technology purchase will resolve the issue. "Canada's productivity challenge is ultimately a leadership challenge. There is no single technology investment that will solve it," Chapman said in the report.

BDO Canada's recommended priorities

BDO Canada's report outlines five priorities for leaders over the next one to two years:

• identifying high-friction workflows
• redesigning processes from first principles
• reallocating resources away from low-value activity
• building organizational adaptability, 
• and strengthening AI literacy among leadership teams.

Paul Dostaler, National Manufacturing & Distribution Industry Leader at BDO Canada, said manufacturers making the most progress are moving beyond pilot projects. "The manufacturers leading the way are breaking out of the 'R&D prison' — a cycle of pilots and proof-of-concept initiatives that never make it into production," he said.

BDO Canada's report concludes that the organizations best positioned for the next decade will be defined not by the size of their technology investment, but by how effectively their leaders redesigned work and empowered employees, an outcome that depends heavily on HR translating strategy into workforce practice.

Recently, the federal government launched its new National AI Literacy Initiative. The program includes a dedicated training stream for workers and job seekers through Employment and Social Development Canada's Job Bank.

Here are five leadership pointers HR professionals can use to guide their organizations through the AI adoption surge, based on current data from different source: