C-suite, HR are misaligned on AI workforce strategy: Mercer

NEW YORK, UNITED STATES — A Mercer survey of nearly 12,000 executives, HR leaders, and employees worldwide found 99% of executives expect AI to reduce headcount in the next two years — while only 19% of HR leaders account for AI’s emotional impact in their workforce plans.

AI redesign vs. retention: C-suite and HR diverge

“Leaders are not short on vision, as they are already designing the future and have access to the technologies and insights needed to transform their organizations. The challenge now is execution at scale,” said Ilya Bonic, President of Mercer’s Career Practice. 

The 2026 Global Talent Trends report, now in its 11th year, found 63% of executives want to redesign work around AI and automation — while HR’s primary focus remains enhancing the employee experience for retention.

Only 32% of executives believe their workforce can optimally combine human and machine capabilities, and only 27% have faith in HR teams to advise on human capital risk — a confidence gap that points to structural misalignment rather than a mere difference of opinion.

Employee wellbeing deteriorates as AI execution gaps widen

Pat Tomlinson, Mercer’s President and CEO, said growth depends on organizational coherence. 

“Leaders are striving for growth this year, but to achieve it, organizations need every team performing at their peak,” he said. 

The survey also found 98% of executives plan organizational design changes within two years.

Employee concern about job loss from AI jumped from 28% in 2024 to 40% in 2026.

The share of employees reporting they are thriving at work collapsed from 66% in 2024 to just 44% in 2026 — a 22-point drop in two years.

62% of employees believe leaders underestimate AI’s emotional impact — yet only 19% of HR leaders have incorporated those impacts into their digital implementation strategies, as the gap widens with AI adoption.

For BPO providers, the Mercer findings frame a risk at the core of client delivery. The 22-point drop in employee thriving is not a morale issue — it is a productivity and attrition signal that cascades directly into service quality. 

BPO operators who build structured AI change management and upskilling into their delivery model are addressing the execution gap that 99% of their clients’ C-suites believe is coming — and that most HR teams are still not prepared for.