Artificial intelligence is reshaping jobs faster than many organizations are reducing headcount, according to Workday’s October 2026 Global Workforce Report. The findings point to a widening gap between the skills employees need to adapt to AI and the development support employers provide.

Artificial intelligence is changing the skills and responsibilities organizations expect from workers, but most business leaders do not currently expect AI to significantly reduce their workforce, according to new research from Workday.

The enterprise software company’s October 2026 Global Workforce Report found that 40% of business leaders expect AI to help organizations get more value from existing employees, while only 28% expect the technology to reduce headcount.

The bigger workforce challenge may therefore be adaptation rather than displacement. Workday’s data shows that employees are experiencing changing job requirements at a time when traditional routes to career progression are becoming less accessible.

Internal mobility declined at 57% of employers, according to the report, while global promotion rates remained essentially flat. Nearly four in 10 employees also said their organization had undergone a reorganization or restructuring during the previous year.

That combination could make skills development more important for HR teams. Employees may not need to leave their organizations to experience disruption; their existing roles can change as AI takes over tasks, introduces new workflows or increases expectations around technical capabilities.

Workday’s analysis of job requisitions from more than 550 employers using Workday Recruiting provides an indication of how quickly those expectations are shifting.

Demand for basic AI skills, including simple prompting, increased through late 2025 before peaking in January 2026. It subsequently fell 25%. At the same time, demand for more advanced capabilities—including building AI tools, automating workflows and AI engineering—increased 51% between September 2025 and July 2026.

The shift suggests that familiarity with generative AI is becoming less differentiated as a workplace skill. Employers are increasingly looking for workers who can integrate AI into business processes or build systems around it.

Employees appear aware of that transition. In a September 2026 survey of 6,000 full-time workers, 79% said they knew which skills they needed to succeed, but only 66% said their employer helped them develop those skills. That creates a 13-percentage-point gap between employee expectations and employer-provided development.

The survey also found relatively high confidence among workers: 65% said they were confident they could learn new skills when required. But Workday’s separate AI@Work Pulse research suggests that workers who rely heavily on AI are already questioning the durability of their existing capabilities. Among workers using AI for nearly all their work, 62% said they expected AI to make their current skills less valuable.

At the same time, 76% of those heavy AI users expected AI to create new career opportunities.

That tension—skills becoming less valuable while new opportunities emerge—is becoming a central issue for HR technology. Organizations need to identify which capabilities are declining, which are becoming strategically important and how employees can transition between them.

Workday’s recruiting data suggests that some traditional workforce capabilities may also be receiving less emphasis. Mentions of management and leadership skills in job requisitions fell 7% between September 2025 and July 2026, while references to training skills dropped 13%.

The problem extends to internal career mobility. Employees attempting to move within their companies most commonly cited hiring pauses, managers who did not support transfers and selection processes they considered unfair. Around half of employees did not attempt an internal move during the previous year, with 27% of those workers saying they saw no attractive internal opportunity.

That may be pushing more workers toward the external market. Workday found that 84% of job seekers used AI during their job search. As AI makes applications easier to produce and submit, the number of applicants for each filled position increased to a median of 69, compared with 58 a year earlier.

The increase has not translated into faster hiring. Median time to fill remained around 60 days, suggesting that greater application volume does not necessarily produce a larger pool of qualified candidates.

The effect is particularly pronounced in financial services and technology and media, where applicants per filled position increased 27% and 40%, respectively.

For HR teams, the findings highlight a more complicated AI transition than a simple headcount story. Organizations may retain employees while simultaneously changing the work those employees perform, raising the importance of reskilling, internal mobility and skills-based workforce planning.

Workday also found that employees are remaining with employers even as their connection to those employers appears to weaken. Voluntary turnover was approximately 16% annually, with about 70% of employees still at the same company after two years.

Yet employees who planned to stay were less likely to recommend their employer to others across every industry examined. The difference reached 11 percentage points in the public sector.

That suggests retention alone may be a weak measure of employee engagement in an uncertain labor market. Workers may stay because changing jobs carries greater risk, rather than because they believe their current organization offers the best long-term opportunity.

For HR leaders, the emerging challenge is to make staying economically and professionally sustainable. That means connecting AI adoption with skills development, career mobility and workforce planning rather than treating those areas as separate HR programs.

As AI changes the definition of valuable work, organizations that can identify emerging skills and give employees credible pathways to acquire them may have an advantage over employers that simply automate existing processes.

Market Landscape

Workday’s findings reflect a broader shift toward skills-based workforce management as generative and agentic AI change job requirements. The immediate HR challenge is increasingly less about predicting mass displacement and more about managing workforce transitions.

The data also highlights growing pressure on recruitment technology. AI is increasing application volumes while employers continue to face skills mismatches, making skills-based matching, internal mobility and workforce analytics more important to HR technology platforms.

For providers such as Workday, Microsoft, SAP, Oracle and Salesforce, AI is consequently becoming intertwined with talent intelligence, learning, recruiting and workforce planning rather than remaining a standalone productivity feature.

Top Insights

• Workday found that 40% of business leaders expect AI to increase the value of existing employees, while only 28% expect workforce reductions.
• Demand for basic AI skills declined after January 2026, while demand for AI engineering, automation and AI-building capabilities increased 51%.
• A 13-point gap exists between employees who know which skills they need and those receiving employer support to develop them.
• AI is increasing job application volumes without accelerating hiring, highlighting persistent skills mismatches between candidates and employers.
• Stable retention rates may mask declining employee advocacy as workers remain with employers amid uncertainty about external opportunities.

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