The International Bar Association (IBA) Global Employment Institute (GEI) has identified workplace AI governance, skills shortages and employee wellbeing as the dominant issues transforming employment law and workforce management globally.
Its 14th Annual Global Report, based on responses from legal experts across 48 countries, examined employment and HR developments during 2024 and 2025, highlighting how organisations and regulators are adapting to technological disruption, changing workforce expectations and evolving compliance demands.
The report found AI is now increasingly embedded in recruitment, workflow automation, employee monitoring and workplace data analysis, creating growing legal and ethical concerns around transparency, employee rights and data protection. While only a limited number of countries currently have employment-specific AI regulations, the report noted a clear shift towards stronger oversight and governance frameworks.
Despite concerns around automation, the report pointed to workforce transformation rather than widespread job losses, citing global projections suggesting around 85 million jobs could be displaced while 97 million new roles may emerge.Dr Björn Otto, partner at CMS in Germany, said AI is rapidly becoming part of everyday workplace operations, pushing employers and regulators to reassess the legal and operational implications of technology-driven work environments.
Alongside AI disruption, the report highlighted persistent skills shortages as a structural workforce challenge across multiple economies. In the UK alone, 54% of organisations reported skills shortages as of June 2025, reflecting similar patterns globally. Ageing populations and skilled migration continue to intensify labour gaps, prompting governments and employers to expand upskilling, reskilling and targeted immigration initiatives.
The report also found employee wellbeing and mental health are becoming core compliance concerns. Increased workloads, blurred work-life boundaries and lingering post-pandemic pressures are driving new workplace regulations addressing psychosocial risks, flexible work and psychological wellbeing.
Todd A Solomon, partner at McDermott Will &Schulte in the US, noted that employers are increasingly expected to actively manage mental health and psychosocial risks, even where legal frameworks remain fragmented.
Flexible and hybrid work arrangements also remain firmly embedded across organisations globally, although many employers are tightening return-to-office expectations with mandates ranging from three to five in-office days per week. This has increased regulatory attention on working-time compliance, occupational safety obligations for remote workers and employees’ right to disconnect.
The report further identified employment disputes linked to dismissals, remuneration and technology-driven restructuring as major litigation concerns across jurisdictions. At the same time, governments are modernising labour legislation to address platform work, evolving contractual models and pay transparency obligations, particularly ahead of the European Union’s Pay Transparency Directive implementation in 2026.To navigate these shifts, the IBA urged employers and governments to prioritise long-term workforce planning, invest in skills development, establish clear AI governance frameworks and integrate employee wellbeing into broader compliance and risk management strategies.
According to the report, organisations that balance innovation, operational efficiency and employee protection through more adaptable and transparent workplace frameworks will be better positioned in an increasingly automated and data-driven global economy.