Australian organisations are racing to adopt artificial intelligence and digital transformation while failing to bring their own people along, according to a new report.
New research by employee communications platform Staffbase found that people and culture rank near the bottom of executive priorities despite evidence that organisations which invest in their workforce significantly outperform those that do not.
The report, Executive Priorities for the Next Digital Workplace Era 2026, surveyed more than 100 Australian business leaders and analysed the Executive Scorecards of the ASX 100.
Digital transformation topped the list of executive priorities for the next 12 to 18 months at 18%, followed by revenue growth at 14% and innovation at 11%.
People and culture, on the other hand, was named a priority by just six per cent of leaders.
Change management was cited by only two per cent, despite what the report describes as unprecedented disruption across industries.
The gap between ambition and execution comes despite the benefits from focusing on people and culture at work.
Analysis of the ASX 100 found that companies which exceeded their people and culture targets recorded annual revenue growth of 17.2%, approximately three times the index average of 5.7%.
“Australian leaders are optimistic about AI and digital transformation and rightly so. But the data makes clear that the organisations who will win in the next era of work are those who bring their people along for the journey, leading with empathy and care,” said Ramak Salamat, Regional Vice President – JAPAC, Staffbase, in a statement.
Struggling leadership culture
Optimism on AI and digital transformation comes in the wake of widespread job insecurity among employees due to the technology, according to the report.
Nearly a third of employees (29%) cited job insecurity as their biggest concern about AI, followed by data and privacy issues.
It comes amid recent reports and experts warning that AI could lead to a job apocalypse, with some roles predicted to be eliminated as AI takes over tasks.
“Anxiety about AI is widespread, with our data showing that almost one in three leaders cite job security as their employees’ top concern with AI and digital transformation. Clearly, we still have work to do to ensure people trust the leadership and change decisions being made,” Salamat said.
Leadership’s current qualities are not helping the situation, according to the report.
Fewer than one in four executives described themselves as empathetic or people-centric leaders, with nearly one in three saying they lead primarily through data-driven decision making.
Challenges in communication also make things worse, with fewer than half of leaders saying they consistently check that team communication is understood.
This indicates that employers strongly favour broadcast communication over verified and reciprocal communication in the workplace.
“There is a gap in leadership strategies as organisations navigate change. AI and data accuracy are top of mind in transformation projects, while clear communication with staff is an afterthought. And yet, digital transformation is an area where employee engagement, trust, and culture are critical to success,” Salamat said.
The expert underscored the need to improve communication strategies with employees.
“With half of today’s leaders assuming messages have been clearly communicated among their people, Australian organisations have a long way to go in prioritising people and culture above AI adoption. We must close the communication gap to get ahead,” Salamat said.