Artificial intelligence (AI) is increasingly shaping business competitiveness, but cracks in its widespread adoption emerged in 2025 as many organisations reported failed pilot programmes and underwhelming outcomes.
Despite the challenges, companies that successfully implemented AI recorded significant productivity gains, largely driven by a strong focus on human capital rather than technology alone.
Heinrich Swanepoel, Head of Business Development at Deel Local Payroll, powered by PaySpace, said most AI projects fail due to insufficient human input and enablement.
According to him, while AI adoption has coincided with workforce reductions in some sectors, it is often wrongly blamed for job losses that are largely driven by broader economic pressures and over-hiring trends. Data indicates that fewer than five per cent of job cuts in the United States since 2023 are directly linked to AI.
Swanepoel cautioned that positioning AI as a replacement for human workers creates a misleading narrative that can result in costly rehiring and missed opportunities to maximise AI’s potential. He emphasised that successful AI deployment depends on empowering and upskilling employees.
Industry experts note that digital transformation continues to rely on the foundational hierarchy of people, process, and technology, with AI placing even greater emphasis on workforce readiness. This underscores the critical role of human resources (HR) in driving AI adoption.
Echoing this view, Catriona Campbell, AI Client Strategy Leader at EY, described AI as an organisational transformation rather than a purely technological shift, stressing that HR must lead the process to unlock its full strategic value.
Analysts say the most effective AI use cases currently focus on enhancing the productivity of high-value roles, such as automating Know Your Customer (KYC) processes and anti-fraud verification. These targeted applications have delivered measurable efficiency gains due to close collaboration between technical teams and domain experts.
However, broader AI deployment across functions—such as customer service, management, and sales—has proven more complex. Many organisations underestimate the scale of change required, resulting in poor adoption rates and widening skills gaps. Surveys show that more than half of employees consider enhanced training a top priority for improving AI outcomes.
Experts warn that AI strategies often fail when they are not aligned with an organisation’s workforce and operational processes, highlighting the need for HR-led insights into talent, skills, and organisational structure.
They recommend that organisations invest in modern HR systems to improve data visibility, conduct comprehensive skills audits, and promote continuous workforce insights beyond annual performance reviews. Additionally, fostering AI literacy, establishing clear policies, and creating a culture of accountability around AI use are seen as critical to success.
Measuring the impact of AI on productivity and workforce dynamics is also essential to determine the appropriate balance between human input and automation.
Swanepoel concluded that understanding and empowering the workforce remains central to AI success, warning that outdated HR systems and processes could undermine even the most ambitious AI strategies.
