Artificial intelligence adoption in manufacturing often triggers early setbacks, but proactive change leadership can reduce the damage. Manufacturing firms adopting AI often face a "J-curve" — initial performance declines of up to 60% before rebounding with productivity, revenue, and market-share gains, according to a 2025 MIT-backed study.
For HR leaders, that dip represents more than lost output — it reflects stress on employees, resistance to change, and potential setbacks to morale and retention. "Whenever technology updates, at first it takes more time to do things, and people ask, 'Why did they have to change that?' But then it's worth it in the end, because it makes us more efficient and effective," said Matt Poepsel, vice president of talent optimization at The Predictive Index.
Left unmanaged, the J-curve becomes a costly setback - but with proactive HR change leadership, it can be a catalyst for long-term growth.
Identifying the J-curve in Manufacturing
The J-curve of AI adoption begins with companies seeing a slowdown in productivity, performance and morale while adjusting to new technologies.
According to the MIT study, the impact can be big in hands-on industries like manufacturing: short-term losses for newer companies and even greater disruption for older firms with legacy processes and systems.
This early dip in productivity and morale is heavily influenced by how change is managed and led.
"In organizations, it's much more complicated when you start talking about human systems and people working on complex projects," Poepsel said. "The J-curve could be shallow or steep depending on whether we focus just on technology, or if we put equal emphasis on psychology and people."
Companies that ignore the human element risk steeper dips, slower recoveries and frustrated employees. For HR leaders, the size of the dip isn't predetermined — it depends on whether they step up as change leaders who center trust, communication, and workforce readiness. In other words, HR's role in guiding people through change is what determines whether the J-curve is a steep painful drop or a shallow dip followed by a faster recovery.
How HR Change Leadership Shortens the Curve
Effective HR change leadership requires shifting focus from managing change to guiding it. According to Poepsel, this means adjusting mindsets on two levels: executive and employee.
At the executive level, senior and middle management often focus on technology capabilities first, overlooking the human capabilities needed for AI adoption and how to streamline the process. Workers, on the other hand, may be resistant to change or afraid of being replaced by technology, potentially slowing adoption.
By taking charge of change management efforts, HR helps bridge the gap between management and employees.
"Leadership is about people's energy and getting them to work collaboratively toward a shared goal," Poepsel said. "HR needs to see themselves as consultants, coaches and confidants."
Real-world manufacturers are already demonstrating these principles:
Conducting audits: Assess workers' perception of psychological safety, trust, transparency, and alignment across teams. This can become a baseline for employee-focused efforts.
Torani, a midsize company selling flavored syrups, shares profits and offers employee stock ownership programs, creating a high-trust, collaborative environment. Torani is also known for never having layoffs and boasting an employee retention rate of 90%.
Listening and responding: Throughout the change management process, implement information-sharing through feedback loops, pulse surveys, and town halls.
When employers in Fresno, Calif. struggled to find a skilled manufacturing workforce, the local government, education system, and manufacturing companies formed a partnership. Today, the San Joaquin Valley Manufacturing Alliance collaborates with schools and local colleges to help students learn advanced technology and become the workforce of the future.
Reskilling employees: Offer role-specific AI, robotics, and analytics training and professional development opportunities. SHRM research found that organizations that proactively train and upskill employees for AI integration are 2.6 times more likely to report successful outcomes.
Major manufacturer Bosch, a Predictive Index client, has trained more than 65,000 workers at their "AI Academy" since 2019.
"Whether you're a large enterprise like Bosch, a midsize company like Torani, or a small manufacturer, it takes getting the human part right before the technology can fully deliver," Poepsel said.
Embracing the Challenge
AI adoption in manufacturing is as much a human challenge as a technical one. HR leaders who embrace change leadership can flatten the J-curve, accelerate AI adoption and enhance workforce engagement.
"AI is going to help manufacturing, but only if HR leadership helps us absorb it," Poepsel said. "Manufacturing is inherently a people business. Always will be. Our job is to ensure people —and technology — succeed together."
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