5 Impacts of AI in the Workforce
AI is redefining work. From the tasks we perform to the skills we need and the paths we take to get hired; the workforce is undergoing a major transformation.
As AI becomes more deeply embedded across industries, it’s not just changing how we work, but also what work looks like. It’s creating new opportunities, phasing out outdated roles, and reshaping the expectations placed on workers at every level.
1. The Nature of Work is Changing
AI is not eliminating work, it’s reshaping it. As intelligent systems take on more routine and repetitive tasks, the human role in the workplace is shifting toward creativity, problem-solving and collaboration. The World Economic Forum projects that by 2025, 85 million jobs will be displaced by automation and AI, while 97 million new roles will emerge that are better aligned with the evolving relationship between humans, machines and algorithms.
But this isn’t just about job loss or creation, it’s about how work itself is being redefined. Tasks that once required hours of manual effort can now be completed in minutes with the help of AI, freeing up time for higher-value activities. This shift is prompting organizations to rethink job design, workflows and even the structure of the workweek.
Business leaders are already envisioning what this future could look like. JPMorgan Chase CEO, Jamie Dimon, has suggested that AI could automate up to 70% of current tasks, potentially enabling a 3½-day workweek. Rather than replacing humans, AI could enhance productivity, reduce burnout and improve overall well-being.
However, bringing this vision to reality depends on one critical factor: skills. As the nature of work evolves, so too must the workforce, requiring a renewed focus on upskilling, adaptability and lifelong learning.
2. Lifelong Learning Is Becoming a Necessity
As AI changes the nature of work, it is also transforming the expectations placed on employees. In this new era, a single degree or credential is no longer enough to sustain a lifelong career. Instead, the ability to continuously learn and adapt has become a defining trait of workforce resilience.
This shift is fueling what some call FOBO, the fear of becoming obsolete. According to Cengage Group’s Employability report, nearly half of U.S. workers worry their job could be replaced by AI, and 60% say they’re more focused than ever on gaining new skills to stay competitive.
The pressure to keep up is real and business leaders are taking notice. A recent Gartner survey found that 85% of learning and development leaders expect a dramatic increase in skills development needs over the next three years due to AI and digital trends. And 93% agree it’s their responsibility to ensure employees have the time and resources to keep learning.
In this environment, lifelong learning is no longer optional, it’s essential. The most future-ready professionals are those who embrace continuous growth. As the shelf life of skills shortens, a willingness to learn may be the most valuable skill of all.
3. Entry-Level Jobs Are Disappearing
AI is reshaping the job market in ways that disproportionately affect young workers as entry-level roles are being increasingly automated or restructured. At Fortune’s Workplace Innovation Summit, Indeed CEO, Chris Hyams, noted that for nearly two-thirds of all entry-level jobs, more than 50% of the required skills can now be performed reasonably well—or very well—by generative AI.
Additionally, according to recent data from Handshake, entry-level corporate roles traditionally available to graduates have declined 15%, while the number of applications per job has surged 30%. With fewer traditional starting points available, Gen Z faces a steeper climb into the workforce.
However, this generation may also be uniquely equipped to adapt. As digital natives, Gen Z brings fluency with technology that can be a powerful asset in an AI-driven economy. But to unlock that potential, employers and educators must work together to create new on-ramps to employment—through apprenticeships, micro credentials and project-based learning that provide both practical experience and confidence.
4. Uniquely Human Skills Are Vital
As AI becomes more capable, it’s easy to assume that technical skills alone will define the future of work. But the reality is, what sets humans apart in an AI-driven world are skills that machines can’t replicate like critical thinking, creativity, emotional intelligence and collaboration. In fact, 59% of employers say the rise of AI has prompted them to prioritize different skills when evaluating candidates, according to Cengage Group’s Employability report.
“The workplace has changed rapidly in the last few years, and now we are witnessing a new shift as AI begins to reshape worker productivity, job requirements, hiring habits and even entire industries.” – Michael Hansen, Cengage Group CEO
In this new landscape, employers are looking for a blend of technical fluency and human-centered capabilities. LinkedIn’s 2025 data shows that the top five in-demand skills for U.S. workers include AI literacy, conflict mitigation, adaptability, process optimization and innovative thinking. These aren’t just buzzwords, they reflect a growing recognition that success in the age of AI depends on the ability to lead, empathize and adapt.
5. New Collar Workers Are Bridging the AI Skills Gap
As the nature of work changes, so are hiring practices. A growing number of employers are turning to “new collar” workers: individuals with nontraditional education backgrounds but strong technical skills.
These workers are helping to fill a critical gap. According to Cengage Group’s 2024 New Collar Worker survey, 68% of business decision-makers expect to create new roles to support AI adoption, and 59% have already hired new collar workers to do so. In a world where demand for AI fluency is outpacing traditional education pipelines, these professionals are proving that a four-year degree isn’t the only path to a successful tech career.
A report from Test Gorilla found that 88% of tech companies are now using skills-based hiring to recruit talent, and 89% say they’re satisfied with the results. It’s a model that opens doors for a more diverse and inclusive workforce, while helping employers find the talent they need to stay competitive.
As organizations race to integrate AI, new collar workers are emerging as a vital bridge, bringing fresh perspectives, practical skills and a readiness to adapt. They’re not just filling roles; they’re helping to shape the future of work.
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AI is reshaping the workforce in real time. From the rise of new-collar workers to the decline of traditional entry-level roles, the path forward will require adaptability, continuous learning and a renewed focus on the uniquely human skills that machines can’t replace.
Interested in learning more about AI’s impact? Check out our previous blog, AI’s Impact on Education in 2025, to see how these workforce shifts are already taking root in the classroom.