AI Increases Companies’ Productivity But Frustrates Leaders and Employees

A majority of C-suite leaders say their AI investments have resulted in increased productivity, although many are still frustrated with the technology’s implementation, according to a study released last month. Meanwhile, many employees say the technology has left them burned out and struggling with bigger workloads.

Eighty-one percent of C-suite executives at companies that deployed AI said it boosted workforce productivity, according to research from Upwork, a San Francisco-based company whose platform connects freelancers with jobs. However, half of executives at companies that use AI believe their organizations are falling behind their competitors and that a lack of employee AI skills and adoption has stalled overall productivity.

Employees are frustrated too. Nearly half (47%) said they don’t know how to achieve the productivity gains their employers expect, and 77% said AI tools have decreased their productivity and added to their workload. Additionally, 71% of full-time employees said they were burned out, and 65% reported difficulty meeting their employers’ productivity demands. 

AI ‘Anxiety at the Top’

Kelly Monahan, managing director for the Upwork Research Institute, said AI is challenging for both leadership and employees because companies are still figuring out the best way to use it. Yet even though executives may lack a clear vision for the technology, they continue to invest in AI. For workers, AI becomes just another tool they aren’t sure how to use.

“There’s anxiety at the top not to miss out with the next technology wave, and a lot of CEOs will tell you they feel a little left behind,” said Monahan, who has a Ph.D. in organizational leadership. She added that executives view AI as a way to address talent shortages and increase efficiencies. But that can’t happen by simply layering the new technology over existing procedures.

Investment Must Include Training

“AI requires as much of an investment in management and talent development as it does the tech side,” Monahan said. “I think that’s where we’re experiencing this disconnected tension [between executives and workers].”

Monahan added that leaders need to take a bottom-up, nuanced approach to deciding what areas could be enhanced by AI, then give employees the necessary training to incorporate these tools into their work.

However, there is concern that employers will use AI to replace human workers, rather than to make them more effective.

Human Touch Gets Less Attention

Meanwhile, CEOs are pulling back on investing in people, culture, and hiring, according to a survey released last month by Gartner, a Stamford, Conn.-based consulting company. Gartner found that 57% of CEOs plan to increase investment in people and culture in 2024-2025, down from 69% the prior year. Similarly, less than half of CEOs (46%) plan to increase investments in hiring, compared to 54% in 2022.

The emphasis CEOs are putting on growth and technology, particularly AI, “is causing workforce-related attention to wane,” said Alexander Kirss, a senior principal in Gartner’s HR practice. He said that over half (56%) of CEOs surveyed expected company productivity to increase by at least 11% from the use of generative AI over the next two years.  

“CEOs are making tough decisions with their limited resources,” Kirss said. “But I think it's very dangerous for CEOs to believe that an investment in AI can replace talent.”