Many HR tech companies’ go-to-market strategies are fixated on enhancing employee experience. There’s often a heavy emphasis on frontline efficiency achieved through a bottom-up approach to bolster business. They aim to help employees first, enabling them to be more productive, which in turn benefits the company as a whole. A significant part of this movement is facilitated through the use of AI as a vehicle to accelerate progress.
At HR Tech 2025, there was a recurring emphasis on the concept of “human in the loop” — the idea that even with advancements in AI, such as agentic AI, human oversight will always be necessary for its actions. Many business and tech leaders argue that AI is meant to assist, rather than replace, workers. And this is all well and good, until someone realizes the technology has advanced enough that oversight is no longer needed, and these AIs can be fully autonomous.
During a recent conversation with a representative from a large technology vendor, I asked how the company was messaging to decision-makers and buyers about this employee-first and human-in-the-loop AI strategy. He shared that the company is driving change from the top down, targeting shareholders and senior leadership with data that directly links employee experience to business performance. The hope is that once these stakeholders see the numbers, they’ll recognize that reducing headcount for short-term profits is a losing strategy.
But why should that shareholder care if headcount goes down? Isn’t that better for them?
In any business, employees are often the most considerable cost on the balance sheet. From a shareholder’s perspective, reducing headcount usually means increasing their profit margins. There’s little incentive to stop investors from pushing for fewer employees altogether, and as this happens, many freshly laid-off workers will be pushed into the job market.
Thrust Into the Great Unknown
Tech moves fast and grows exponentially. The job market, on the other hand, moves in fits and starts and will inevitably lag behind.
While not guaranteed, this is likely to lead to job displacement – the involuntary loss of a job due to factors beyond the worker’s control. AI, in turn, could then start having the blowback impact of a digital offshoring in the 2020s and 2030s, similar to what devastated swaths of the industrial and manufacturing sectors in Western economies in the 1980s and 1990s. However, AI is poised to have even broader effects, as it stands to impact both cognitive and manual labor across a wide range of industries.
Workers laid off due to AI-driven automation will be thrust into a labor market that already suffers from a growing skills mismatch as well.
According to the 2023 Future of Jobs Report by the World Economic Forum, 44% of workers’ skills are expected to be disrupted over the next five years, and nearly one billion people will require reskilling by 2030. However, many individuals will lack the necessary resources—time, money, or access to training—to reskill quickly enough to remain competitive.
World economies will surely find their way to stability, but the transition period could be turbulent.
Where We’re At
With roughly 70% of Americans feeling that the economy is rigged against them and workplace engagement hitting a ten-year low, likely due to the general malaise or “vibecession” that people are feeling, I’m left wondering how the messaging I mentioned early is actually going or if it’s just falling on deaf ears.
If many of these fundamental issues aren’t addressed, other industries downstream will feel the pain. Much of the HR technology industry relies on a per-employee pricing model; if employee numbers shrink due to automation, that model will erode, and HR tech vendors risk undermining their own revenue streams while contributing to a weakened labor force. This is why it’s so important that HR has a seat at the table in strategic business discussions.
Getting the Message Across
While this shouldn’t be a reason to stifle innovation, it will be essential for business leaders, HR organizations, and HR tech players to take a measured approach to these changes to avoid causing the very labor cuts that will undermine their price-per-employee business model or the economy more broadly.
Shifts in workplace culture and employee engagement require buy-in from senior executives and shareholders, who ultimately have the final say in organizational change. However, the statements and targeting of leaders and shareholders needed to be bolder if any significant change was ever going to happen. Real workplace transformation requires top-level buy-in.
My more optimistic take on this, however, is that the economy is just undergoing an adjustment period. As the larger Baby Boomer generation exits the workforce with each passing year, and the younger generations are too small to fill their vacant roles, we may see an increased emphasis on the value of workers with these skill sets. I do hope the unrest this period of flux leads to a diminishment of the Friedman Doctrine in modern business – that “an entity’s greatest responsibility lies in the satisfaction of the shareholders.”
If we continue on our current trajectory, there will be few benefits for most people. At the end of the day, we need to ask ourselves: what kind of world do we want to live in? Is it one that creates the highest number of “winners” possible? Or the one that makes the highest number of winnings possible?