AI Fails to Deliver Expected Labour Savings, Employers Advised on Spending

A recent analysis reveals that artificial intelligence (AI) has yet to produce significant labour-cost savings for businesses, prompting experts to recommend a focus on employee satisfaction and productivity. The global advisory firm WTW indicated that, despite a marked increase in investments in AI and automation trials over the past two years, these efforts have not yet translated into financial benefits for organizations.

Gabriella Bergstedt, associate director for work and rewards at WTW, emphasized the importance of strategic budget allocation. “It’s key that organisations proactively plan how to make the best use of their budgets for employee satisfaction and productivity,” she stated. This advice comes in light of a new survey examining pay strategies that found a concerning trend among employers in Ireland.

According to WTW’s global Salary Budget Planning Report, one-fifth of Irish employers intend to reduce their salary budgets in 2026. The survey highlights that salary budgets in Ireland are stabilizing, with 60% of employers planning no changes to their projected pay budgets for this year and only 11% planning increases.

Bergstedt noted that Irish employers are approaching 2026 with clearer priorities regarding pay. They are demonstrating stronger fiscal discipline by treating salary budgets not merely as financial inputs but as strategic levers. “Yet beneath the steady medians lie meaningful shifts in how organisations allocate pay, manage complexity, and plan for a workforce that continues to evolve faster than traditional budgeting cycles,” she added.

For those employers adjusting their initial budget projections, various factors are influencing their decisions. These include inflationary pressures impacting 17% of responses, expectations of stronger financial results from 22%17%, and changes to compensation strategy influencing 15% of the surveyed employers.

The findings underscore a critical intersection between technological investment and human resource management. As AI technologies continue to develop, the link between productivity and worker satisfaction remains essential. Employers are urged to tread carefully as they navigate these changes, ensuring that they prioritize their workforce’s well-being while adopting new technologies.