Retaining Employees In The AI-Powered Workplace: Emerging Challenges

We live in a technology-driven world filled with both promises and challenges. What appeared imaginable not long ago has become a reality thanks to continuous technological advancements. Just think about driverless cars, robot-performed surgeries, vending machines that prepare a fresh meal in five minutes, and a ChatGPT that thinks faster, remembers more, and writes better than most humans.

Looking at the profound transformations brought on by technology, have you wondered if humans will even be needed in the future workplace? If yes, in what areas? If not, do we even bother to retain employees?

Let me state clearly what I believe: talent trumps technology.

Human Talent Is Valuable

Research reveals the value of human capital is significantly higher than that of physical assets in business throughout the world. A leading British economic consulting agency, the Center for Economic and Business Research (CEBR), conducted a study of eight countries back in 2017 to understand the financial contribution made by people versus other assets. What they found was thought-provoking: human talent and intelligence is 2.33 times more valuable than all physical capital combined.

Why? Here are two viable explanations. First, human potential is unlimited and can be unleashed and enhanced to benefit the organization. Second, as people accumulate more knowledge, skills, and experiences, they will bring more value, unlike machines that typically operate at a limited output — once maximized, their value will depreciate over time.

See? Talent trumps technology. The problem is, many companies are not great at talent retention.

A Lot Of Employees Are Thinking About Leaving

If we buy the CEBR’s conclusions, and I do, it is clear companies must prioritize retention. Unfortunately, retaining employees has been a persistent challenge facing organizations and it seems to have been getting worse in the past decade. A 2024 Gallup report suggests that self-reported employee turnover risk is at its highlight point since 2015, and employees’ long-term commitment to their organization hits the lowest in nine years. Specifically:

• 51 percent of U.S. employees are open to leaving their organization.
• 77 percent of voluntary leavers either left within three months of searching for a new job or did not actively search for new employment in the first place.
• 36 percent of voluntary leavers did not talk to anyone before they made the decision to resign.
• 44 percent of  voluntary leavers who discussed their intention to leave did not talk to their direct supervisor or manager before deciding to leave.
• 42 percentof voluntary employee turnover is preventable but often ignored.

These statistics are concerning, calling for immediate attention and strategic interventions.

As artificial intelligence (AI) continues to transform the nature of work and reshape human experiences in ways that we are not prepared for, how to retain employees by empowering them in the technology-empowered environment is critical. With the ability to imitate the cognitive functions of the human brain and the goal to surpass the way humans work, AI has presented both exciting opportunities and serious threats.

Artificial Intelligence Is A Tool, An Extension Of Human Capability

On the positive side, the integration of AI technologies and tools into work processes has improved both organization- and employee-centric outcomes across diverse sectors, for example, manufacturing, business, hospitality, healthcare, and education, to name a few. For organizations, AI-empowered strategies have led to boosted performance, increased business value, digital innovation, operational efficiency, improved creativity, and better decision-making, among many others. For individuals, positive outcomes include competence development, enhanced productivity, task enjoyment, job satisfaction, and organizational commitment.

These benefits have driven more integration of AI into different aspects of management practices.

On the negative side, AI applications have disrupted traditional workflow, caused human fear and job insecurity, hindered the development of career competencies, reduced work engagement, and led to job burnout and a rise in employee turnover. Back in 2017, McKinsey Global Institute predicted automation could displace 400 to 800 million jobs by 2023, forcing up to 375 million workers globally to switch job categories and learn new skills. McKinsey’s latest analysis in 2024 indicates that current AI and other technologies have the potential to automate work activities that absorb up to 70 percent of employees’ time today.

As such, employees are worried they will lose their jobs to AI. They also are worried they may not be able to acquire the new skills needed for new occupational positions, causing prolonged unemployment and increased financial pressure.

To soothe these fears, I advise companies that AI should be considered an extension of human capabilities, rather than a replacement. In fact, I would argue that to achieve business sustainability, it is never more important than now to put people in the center of organization management and development. How can you do that? If you are an MSCI member, join me for a new four-part webinar series centered on the topic of talent retention. Through these webinars, you will learn different evidence-based strategies that will help you effectively engage your employees while integrating AI tools into their work activities.

The first session in the series is scheduled for March 27 at 11 a.m. CT. More information is at this link.

Jia Wang is a professor in the Department of Educational Administration and Human Resource Development at Texas A&M University. Her research focuses on international and national human resource development, organization crisis management, and learning within organizations.