What’s Shaping Work: Is AI replacing people – or reshaping work?

Looking beyond the headlines

Almost every conversation I have about AI eventually comes back to the future of work. Depending on whom you listen to – or what you read, or what you watch – AI is either transforming organisations beyond recognition or replacing people altogether.

The more conversations I have with CEOs, business leaders, technology specialists, and HR professionals, the less convinced I am that either narrative tells the whole story.

What I’m seeing instead are organisations making very different leadership decisions about how to use AI and emerging technologies. And while the technologies may be the same, the outcomes are remarkably different.

Some organisations are using technology to reshape work, amplify capability, and create new value. Others are using the same technology primarily to reduce labour costs and shrink their workforce. The difference isn’t the technology. It’s the leadership decisions behind it.

IKEA recognised that AI could successfully manage nearly 60% of routine customer enquiries. But instead of viewing that as an opportunity to reduce headcount, the business looked more closely at the remaining 40% of conversations. They discovered customers weren’t simply asking transactional questions; they were seeking advice, guidance and expertise. Rather than downsizing, IKEA reskilled parts of its customer service workforce into interior design consultants, creating a new advisory service that has since generated more than €1 billion in revenue.

Closer to home, Perpetual Guardian shares a similar philosophy. Rather than replacing junior legal professionals, AI has enabled them to complete routine work more efficiently, providing an opportunity to contribute to more meaningful work earlier in their careers. Technology hasn’t reduced the value of their people; it has increased what they’re capable of delivering.

The same technology, different leadership decisions

Of course, not every organisation is taking this approach.

One of Australasia’s biggest law firms recently announced it would reduce its graduate intake, with leadership acknowledging that AI is now undertaking much of the routine work junior lawyers traditionally performed. Klarna, meanwhile, became one of the most prominent examples of AI-led customer service automation before later acknowledging that its pursuit of efficiency had affected service quality, prompting renewed investment in human support.

Neither example suggests AI has failed; far from it. What they reinforce is that many organisations are still working out how to measure the value of AI and emerging technologies.

Too often, the cost of ‘digital labour’ is compared directly with the cost of ‘human labour’, as though its purpose is simply to do the same work for less money. But the comparison is rarely that straightforward and often overlooks the true environmental cost of the data centres powering AI and emerging technologies – although that’s a conversation for another day.

What this reinforces is that ‘digital labour’ isn’t nearly as simple or as inexpensive as it’s often made out to be. It brings its own costs, capabilities and constraints, and its real value isn’t in replicating existing jobs more cheaply. It’s in enabling organisations to redesign work, unlock new capability, and create value that wasn’t possible before.

Perhaps this is why the public conversation has become so dominated by job losses. When workforce reductions are announced alongside AI and emerging technology investments, it’s easy to assume one caused the other. In reality, the economics are often far more complicated. Gartner recently observed that while AI-related layoffs have captured attention, many workforce reductions have been driven by broader economic conditions rather than by AI and automation alone, predicting that by 2027, half of the organisations that attributed headcount reductions to AI will rehire people into similar functions under different job titles.

A new era of accountability

To me, this signals something much bigger than a debate about technology.

Around the world, the conversation is maturing. Courts, regulators and policymakers are beginning to ask tougher questions about how AI is being used in the workplace. In China, courts have ruled that adopting AI alone is not sufficient justification for redundancies. In the United States, the proposed AI-Related Job Impacts Clarity Act (aka the AI Layoff Bill) seeks to provide greater transparency around AI-related job impacts. Meanwhile, the European Union’s AI Act will introduce enforceable obligations for the use of AI systems in employment, from recruitment and candidate assessment to workforce management.

For staffing businesses, the EU AI Act isn’t simply another piece of regulation to monitor. It has practical implications for every stage of the recruitment process, from the technologies we use to the decisions we make. Compliance doesn’t sit with the technology provider alone. It sits with the organisations choosing how those tools are used.

For me, this moves the conversation beyond keeping a human “in the loop”. The real opportunity – and responsibility – is ensuring humans remain in the lead.

The leadership opportunity

Technology will continue to evolve, and AI will undoubtedly become part of almost every organisation’s future. The implications will extend beyond individual organisations to entire economies. Governments have every reason to encourage innovation, but they’ll also be thinking about employment, productivity and long-term economic growth. AI agents may improve efficiency, but they don’t pay income tax – at least not yet!

I believe the organisations that create the greatest long-term value won’t be those asking how technology can replace people. They’ll be the ones asking how technology can help people create value that wasn’t possible before.

The real opportunity for leaders is not to adopt AI and ask how it can replace people within your organisation, but to explore how it can reshape work to enable both your people and technology to leverage their greatest strengths.