Artificial Intelligence & Machine Learning

CEOs Push AI Agenda Amid Workforce and Cultural Challenges

The IBM Institute for Business Value study showed a growing gap between CEOs' AI ambitions and their organizations' readiness. Among the more than 2,500 CEOs surveyed, 61% are pushing for faster AI adoption, but their teams are grappling with incorporating this technology. This has resulted in an urgent need for strategies to align technological advancements with workforce capabilities.

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Despite the aggressive pursuit of AI, the human factor remains crucial. The study results showed that the success of AI depends more on human adoption than on the technology itself according to 64% of CEOs.

CEOs' AI Ambitions and Workforce Readiness

Half of the surveyed CEOs recruited for AI-related positions that did not exist previously, which indicated the rapid evolution of job roles. Many organizations are struggling to fill these key technology positions, but 53% of CEOs reported that hiring for these roles is progressively becoming more difficult. CEOs anticipated that 35% of their workforce will require retraining and reskilling over the next three years, a significant increase from 6% in 2021.

Generative AI and Workforce Integration

Gen AI promises significant opportunities, but moving beyond productivity gains to business model innovation requires buy-in at all levels of the organization. Many employees now perceive gen AI as a tool that works for them.

"Our research underscores the immense pressure CEOs face to maintain a competitive edge. Besides focusing on profitability and productivity, acquiring the right skills is a significant challenge, with CEOs now recruiting for roles that have only recently emerged," said Shanker Ramamurthy, global managing partner, banking and financial markets, IBM. "The workforce requirements in the financial services sector are evolving rapidly, necessitating upskilling programs as a crucial component of any strategy to scale gen AI."

The 2024 Work Trend Index Annual Report from Microsoft and LinkedIn supported the IBM IBV report findings. The report showed that 66% of leaders would not hire individuals without AI skills. But, despite the high demand for technical expertise, many companies are not adequately investing in training their existing talent. In the United States, nearly 45% of executives are not investing in AI tools or products for their employees, and only 39% of global employees using AI at work have received AI training from their organizations.

Balancing AI Tools and Employee Upskilling

With the rising demand for AI-related roles, companies must invest in upskilling and reskilling programs to ensure their workforce can effectively utilize AI. Cultivating a culture of continuous learning is essential to building a more agile and adaptive workforce. The IBM study also showed a shift in priorities, with product and service innovation becoming the primary focus for the next three years. Only 36% of CEOs funded AI investments with new IT spending, while the remainder reallocated existing budgets.

"Most leaders focus more on deploying gen AI tools than on upskilling employees to be successful. That’s a potentially costly mistake. Employees - the humans at the center of your AI ambitions - must possess sufficient levels of understanding, hard and soft skills, and ethical awareness to effectively use AI as a tool in their jobs or to design customer-facing AI solutions," said J.P. Gownder, vice president and principal analyst at Forrester Research, in his blog.

Navigating the Dual Challenges

"Technology leadership today is about navigating the dual challenges of rapid AI adoption and ensuring our workforce is equipped with the necessary skills," said Piyush Malik, chief digital and transformation officer at Veredic Solutions.

CEOs need to both drive technological innovation and ensure their workforce is equipped to harness its potential. The success of AI initiatives will largely depend on companies' ability to bridge the skills gap, foster a culture of continuous learning, and align AI strategies with their employees' capabilities.

"CEOs must strike a delicate balance between technological advancement and workforce readiness. It's about pacing transformation to match our teams' capabilities," said Sarfaraz Nawaz, product executive in residence at Mighty Capital.