AI Adoption Set to Reduce Labour Costs by 25% in Five Years
Indian HR leaders are preparing for a workforce where humans and AI agents work side by side. Nearly 85% agree this mixed workforce will be the norm within five years. Yet, 88% acknowledge their organizations have not fully implemented agentic AI tools.
A recent study surveying 200 HR executives in India reveals that AI adoption is expected to grow significantly, with labour costs potentially falling by a quarter over the next five years. Currently, only 12% of organizations use AI agents, but projections show this will jump to 58% by 2027—an increase of 383%.
Workforce Redeployment and Reskilling
Chief Human Resource Officers (CHROs) anticipate redeploying nearly 25% of their workforce to new roles as digital labour becomes more common. About 93% of CHROs believe AI agents will help employees shift into more relevant positions rather than replacing them outright.
This shift is driving a focus on reskilling. Around 15% of employees have already been retrained, and plans are in place to reskill 73% more to prepare for roles with better future prospects. CHROs see redeployment and reskilling as more cost-effective than hiring externally.
Productivity Gains and Cost Savings
- Average employee productivity is expected to increase by 41.7% once agentic AI is fully integrated.
- Labour costs are projected to drop by 26.2% with AI adoption.
Despite these benefits, many employees remain unclear about how digital labour will affect their daily work. Clear communication and training will be essential to ease this transition.
What HR Professionals Need to Focus On
AI adoption is not just about technology—it's about people. HR teams must prioritize:
- Redesigning jobs to complement AI agents.
- Strategic reskilling to equip employees for new responsibilities.
- Transparent communication to build trust and clarity around AI’s role.
This approach positions organizations to improve productivity while managing costs effectively. For HR professionals looking to deepen their knowledge on AI integration and skill development, exploring targeted training can be a valuable step. Resources like Complete AI Training’s latest AI courses offer practical insights for navigating this shift.
Conclusion
AI adoption within Indian companies is accelerating, with clear benefits for productivity and labour expenses. HR leaders have a crucial role in guiding their workforce through this change by focusing on redeployment, reskilling, and clear communication. Preparing employees for collaboration with AI agents will ensure a smoother transition and sustainable growth.
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