Employers risk losing AI-capable talent while cutting the roles that develop future leaders
Employers should watch out for workforce imbalance in the wake of AI transformation in workplaces, where they risk losing talent who are capable of utilising the technology, according to a new report.
The Human Resources Midyear Market Outlook from Zywave told employers that the adoption of AI is delivering real reductions in the scope of work that requires headcount.
It comes as various tools, such as Claude and Copilot, allow employers to complete mundane tasks more cost-effectively and help them become more productive.
On the other end, demand is growing for employees who can operate alongside AI, who can command a wage premium.
"Employers who ignore either side of that equation risk both overstaffing roles that AI can absorb and losing talent that knows how to use it," the report read.
Warnings against entry-level cuts
Meanwhile, the report also cautioned employers against reducing their entry-level pipeline, following recent reports that entry-level roles are being reduced.
A report from the British Standards Institution (BSI) late last year revealed that 39% of employers cut entry-level roles due to efficiencies made by AI on research, admin, and briefing. Another 43% said they are expecting these cuts this year.
The Zywave report warned that cutting away at entry-level roles may generate short-term savings, but puts at risk the development pathway for future mid-level managers.
"Employers who invest in reskilling now and prepare workers to operate in AI-augmented roles will be better positioned for a labour market where the competitive divide between AI-capable and AI-excluded workers is only expected to intensify," the report read.
"As AI capabilities continue to expand through the back half of 2026 and into 2027, organisations that have already built internal fluency with these tools will hold a meaningful advantage, both in operational efficiency and in their ability to attract workers who expect AI to be part of how they do their jobs."
AI is already the leading reason for job cuts in the first half of 2026, according to data from Challenger, Gray & Christmas.
But the Zywave report said that the full picture is "more nuanced," stating it has not fully materialised.
"Instead, AI is reshaping the workforce through structural shifts that are quieter and, in many ways, more consequential," the report read.
"Hiring patterns are changing, entry-level pipelines are thinning, and the types of roles employers are actively seeking are moving in a clear direction."
