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Brain Circuits

5 AI-related workforce challenges every CEO must address in 2025

Published 9 January 2025 in Brain Circuits • 3 min read

In every digital transformation there is a technical side of change and a human side – which is where transformation efforts most often go off the rails. These are the key AI-related workforce challenges every CEO must tackle in 2025.

1. Acquire and retain talent

Skilled AI professionals – data scientists, machine learning engineers, AI product managers – are in short supply. Even when you recruit them, retention can be difficult. Build strong recruiting pipelines through university partnerships and specialized training programs. Offer compelling career paths and a culture of innovation to keep top talent engaged. If you can’t hire the talent you need, find the best external partners to work with.

2. Overcome cultural resistance

Implementing AI inevitably triggers fear and skepticism. Employees worry about losing autonomy or being replaced. To reduce resistance, communicate clearly how AI augments their work, share quick wins from pilot projects, and celebrate early adopters.

3. Foster cross-functional collaboration

Successful AI implementation requires cross-department coordination among IT, finance, marketing, and others. Siloed data and conflicting goals slow progress. Create and staff cross-functional teams with the right leaders. Pair domain experts with AI professionals to align solutions with real business needs.

4. Embrace upskilling and reskilling

Many roles will require at least basic AI literacy. Offer in-house academies, online courses, and hands-on workshops so employees can apply what they learn directly to their tasks. This democratization of AI skills boosts efficiency and morale.

5. Manage job loss and its implications

Automation will likely consolidate work and eliminate roles. Be transparent about the potential for displacement. Where possible, redeploy or reskill affected employees to retain institutional knowledge. Showing empathy – through career counselling or severance options – helps maintain trust with your remaining employees and preserves a positive employer brand.

Key learning

The technical side of digital transformation isn’t easy, especially when you need to clean up and harmonize your data. This is especially true of AI, which is becoming a competitive necessity. Success is not just about algorithms, but also about how people adapt, collaborate, and evolve alongside emerging technologies. Addressing these five workforce challenges will enable you to lead your organization into a more innovative, resilient future in 2025 and beyond.

Authors

Michael Watkins - IMD Professor

Michael D. Watkins

Professor of Leadership and Organizational Change at IMD

Michael D Watkins is Professor of Leadership and Organizational Change at IMD, and author of The First 90 Days, Master Your Next Move, Predictable Surprises, and 12 other books on leadership and negotiation. His book, The Six Disciplines of Strategic Thinking, explores how executives can learn to think strategically and lead their organizations into the future. A Thinkers 50-ranked management influencer and recognized expert in his field, his work features in HBR Guides and HBR’s 10 Must Reads on leadership, teams, strategic initiatives, and new managers. Over the past 20 years, he has used his First 90 Days® methodology to help leaders make successful transitions, both in his teaching at IMD, INSEAD, and Harvard Business School, where he gained his PhD in decision sciences, as well as through his private consultancy practice Genesis Advisers. At IMD, he directs the First 90 Days open program for leaders taking on challenging new roles and co-directs the Transition to Business Leadership (TBL) executive program for future enterprise leaders, as well as the Program for Executive Development.

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