Should Companies Invest in AI or in People?
The Question Every Employer Must Answer in 2025
By Tess Hilson-Greener | FutureInsight
As UK business confidence seems to be collapsing and the recruitment market tightens, a fundamental question is rising to the surface, which is:
Should companies invest in people or pivot to AI instead?
With rising employment costs, new regulatory pressures, and a future shaped by automation, many companies are searching for scalable, cost-effective ways to stay competitive. For some, artificial intelligence (AI) offers the answer. But what does this shift mean for the workforce and for HR as a profession?
It’s Not All Doom and Gloom - Although It Seems Like It At Times
Two major reports from early 2025 reveal the depth of concern facing UK employers.
A recent Adam Smith Institute (ASI) report shows a significant collapse in business confidence. 77% of business leaders expressed ‘low or very low’ confidence in the UK’s business environment. Just 3.8% reported “high or very high” confidence—resulting in a Business Confidence Score of just 2.6 out of 10.
Top concerns include:
Taxation on profits – 75%
Price and wage inflation – 71%
High energy and input costs – 64%
High taxation on outputs (e.g. VAT and duties) – 59%
Regulatory burdens – 45%
Policy changes: such as the increase in employer National Insurance contributions and the lowering of salary thresholds—are further eroding business confidence. The threat of legal disputes dubbed “lawfare” is an emerging worry for medium and large businesses.
At the same time, the CIPD Labour Market Outlook shows that UK employer confidence has declined to levels not seen since the COVID-19 pandemic. The net employment balance—a measure of hiring intentions—has dropped to +8, down from +21 in autumn 2024. This marks the lowest point outside of the pandemic.
CIPD key findings:
Redundancies – 24% of employers plan job cuts (median reduction: 5%)
Hiring Plans – Only 61% plan to recruit this quarter, down from 64%
Retail Sector – From +23 to –19; only 11% expect growth, while 30% expect cuts
Contributing factors:
Increased Costs – A 6.7% rise in the National Living Wage and a 1.2 percentage point NI increase
Legislative Changes – The Employment Rights Bill mandates day-one sick pay and limits on fire-and-rehire practices
While these indicators suggest contraction, they also point to a shift: organisations are investing elsewhere particularly in automation and AI.
The Way Ahead: Redesign, Not Retreat
This isn’t just a talent squeeze it’s a clear signal to redesign work itself.
As I shared in my recent article, Innovative Organisation Design: Start by Rethinking How Work Gets Done, we must challenge long-held assumptions about structure, roles, and how value is created.
Now is the moment to:
Redesign roles with human-machine collaboration in mind
Embed explainable, ethical AI into HR, recruitment, and workforce planning
Invest in capability-building, not just cost-cutting
Balance productivity with purpose, and automation with empathy
What the Experts Say
The case for urgent transformation is growing:
The World Economic Forum predicts that while 85 million jobs will be displaced by AI by 2025, 97 million new roles will emerge.
The TUC AI Manifesto calls for stronger regulation, fairness, and transparency in algorithmic decision-making.
Leading HR tech platforms like SAP SuccessFactors, Workday, and Visier are embedding auditable AI features, but it is still up to HR professionals to ensure these are used responsibly.
Where Are the New HR Roles?
Forward-looking organisations are inventing new value-based roles:
Skills Architect: Building fluid talent ecosystems
Organisational Network Analyst: Surfacing hidden value and connections
Workforce AI Ethicist: Governing transparency, fairness, and trust at scale
The best career moves will not be up a ladder—but into dynamic capability ecosystems where human ingenuity and intelligent machines co-create outcomes.
This isn’t about adding AI to old roles. It’s about redesigning how we create and deliver value in human-AI systems of the future. I’ve explored this concept in detail in my three-part Substack series:
Part 1: Why We Must Redesign Work Now - Read
Part 2: Will AI Take Your Job? Only If We Don’t Redesign It - Read
Part 3: Redefining HR Roles – A Practical Guide Using the CIPD Profession Map
Together, these articles reflect a shift in HR’s mission from supporting the business to shaping the future of it.
HR Voices Matter: Take the 2025 HR Challenge Survey
To surface what’s really happening in today’s HR job market, we’re gathering insights from professionals across all sectors.
Click here to take the HR Challenge Survey
It’s quick, confidential, and anonymous.
The survey includes:
Employment Landscape – Current status, job search, and hiring experience
Career Confidence & Outlook – Security, next steps, and career resilience
Workplace Experience – Flexibility, age bias, and inclusion
AI in Recruitment – Transparency, fairness, and candidate experience
Final Thought: The Future Is Still Human
This isn’t a binary choice between AI or people it’s a call to rebalance how we value both.
Companies that get this right will not only weather the economic downturn they’ll emerge more resilient, more trusted, and more human.
Let’s lead the way.
Take the survey. Join the conversation. Shape what comes next.
Start the HR Challenge Survey Here It is totally confidential 🤫
Tess Hilson-Greener is a futurist HR AI Transformation leader, speaker, and author of HR2035: Reimagining the Role of HR in an AI World. She helps organisations redesign work, build capability ecosystems, and lead human-AI transformation.
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