Mind the 40% Gap: Is Your Talent Strategy Failing AI?

Organisations are failing to realise up to 40% of the potential productivity benefits from artificial intelligence, which could be a direct result of inadequate talent strategies and underdeveloped workforce capabilities, according to new research from EY.

EY's 2025 Work Reimagined Survey, which gathered responses from 15,000 employees and 1,500 employers across 29 countries, highlights a large disparity between the rate of AI adoption and the human readiness needed to leverage the technology effectively.

While AI use is becoming common, with 88% of employees reporting they now use it at work, the application is often basic. The majority of use cases remain limited to simple tasks like search functions and summarising documents.

The EY research indicates that a mere 5% of employees are deploying AI in a manner that fundamentally transforms their roles.

This limited application comes at a time when employee workloads are perceived to be increasing, with 64% of those surveyed reporting a rise in their workload over the past year.

The impact of training gaps and skill erosion

A primary factor in this unrealised potential is a deficit in training. The survey revealed that just 12% of employees feel they receive sufficient AI training to unlock the technology's full capabilities.

This lack of formal guidance could contribute to the widespread use of 'shadow AI'. Between 23% and 58% of employees across different sectors report bringing their own AI tools to work, which could show a disconnect between the solutions provided by employers and the actual needs of the workforce.

Furthermore, there is a tangible concern among staff about the effect of the technology on their own abilities. The survey found 37% of employee respondents worry that an overreliance on AI could lead to the erosion of their existing skills and professional expertise.

Kim Billeter, EY Global and EY Americas People Consulting Leader, says: “AI is everywhere – but companies seem to be missing out on its full potential, held back by a gap between adoption and human readiness. Most employees surveyed are still using AI for basic tasks, while concerns around job security, skill erosion and rising workloads are creating resistance. When organisations master both talent and technology, AI helps deliver outsized results, but neglecting the human side can erode those gains.”

Establishing a 'talent advantage' in the AI era

The EY research puts forward the idea of a “Talent Advantage”, which it defines as the effective integration of talent and technology strategies. According to the survey findings, only 28% of organisations are currently on a path to achieving this synergy.

When AI is implemented upon what EY describes as “fragile talent foundations” marked by a weak company culture, ineffective learning programmes and misaligned reward structures, the potential returns are greatly reduced.

Leadership emerges as a critical component in bridging this adoption gap. In organisations where AI has been adopted effectively, 75% of employees state their leaders are aligned on a clear vision for the technology.

The research suggests that leaders who foster care, trust and empowerment are responsible for 44% of what the report terms talent health.

The training and retention paradox

Investing in advanced AI training presents a complex retention challenge for employers. According to EY, employees receiving more than 81 hours of AI training annually report an average productivity increase of 14 hours per week, far exceeding the median of eight hours.

These highly skilled employees, however, are also 55% more likely to leave their organisation. This could be because the competitive external market for AI talent often presents opportunities that move faster than internal promotion cycles.

To counter this retention risk, EY suggests that employers should develop comprehensive total rewards packages that go beyond salary.

These packages could include access to cutting-edge technology, flexible working arrangements and distinct career paths that leverage newly acquired AI skills.

Kim says: “The widespread adoption of AI is evident, yet many organisations are still seeing only modest returns. Our findings highlight the urgent need to address the human side of AI adoption. As AI reshapes the workplace, leaders must build cultures that support both talent health and effective technology use.

"Organisations that strengthen their talent foundations while advancing AI applications will be best positioned to achieve transformational results. It's about creating the right conditions for people and technology to thrive.”