Future of Work Trends: Insights on AI, Skills Gaps, and Generational Change from Kelly's Re:work Report

The workforce has reinvented itself before—trading plows for factory lines during the Industrial Revolution, stepping into suits and office towers after WWII, and going digital with the rise of computers and the internet. Now, it’s happening again.

Three forces are converging to reshape the future of work across North America: accelerating AI adoption, a widening skills gap, and generational change as Boomers retire and new talent enters. 

The Kelly Global Re:work Report draws on insights from over 6,000 executives and workers to explain what this means for leaders and employers today—and you can start preparing now.

AI adoption in the workplace: why reluctance is the real risk

AI and automation promise major efficiency gains, but adoption remains uneven—and that widening gap is becoming the greater risk

Most executives and workers agree: the greater threat isn't AI itself, but failing to adopt it. In fact, 69% of global executives and 63% of global workers share this view.

Yet in practice, AI implementation still lags—especially in the business professional and industrial sectors. Only 4% of business professional and industrial executives say their organization isn’t using AI, but nearly a quarter of business professional and industrial workers (24%) say they don’t see any AI tools in use at work.

Even when AI is implemented, adoption is far from smooth. 80% of business professional and industrial executives report challenges, with nearly half citing technical issues. Others point to slow adoption (32%) or users struggling to understand the tools (30%).

That disconnect is fueling workplace tension. Three in five business professional and industrial executives (59%) say they would replace workers who resist AI, but only 43% of business professional and industrial workers believe their employer would follow through. Ultimately, more than a third of business professional and industrial executives say they’ve already started reducing headcount due to AI—significantly higher than workers anticipate.

In STEM sectors, the outlook is more optimistic: 73% of STEM executives believe AI won’t replace people but will reward those who master it. Among STEM workers, just over half agree.

The skills gap is widening across every industry

Skills shortages are widespread across industries. In STEM sectors:

• 64% of executives and 52% of workers point to AI and machine learning gaps.
• 46% of executives and 41% of workers report shortages in data science.
• 42% of executives and 34% of workers flag concerning gap in cybersecurity.

And it's not just technical skills. Soft skills are also in short supply. 38% of STEM executives and 27% of STEM workers say basic communication and interpersonal skills are lacking.

Executives and workers don’t always agree on what’s causing the problem. In business professional and industrial sectors, 35% of workers cite limited opportunities or time, while 34% of executives blame lack of motivation. 

Generational workforce shifts are reshaping talent pipelines

Baby Boomers are retiring at a rapid pace, creating urgent pressure to fill critical roles. Two in five global executives are deeply concerned about the labor shortages this retirement cliff will create.

Yet preparedness varies widely. Among business professional and industrial workers in the U.S., 20% say their company isn’t ready, compared to just 6% of executives. In Canada, the gap is similar—24% of business professional and industrial workers versus 9% of business professional and industrial executives.

There is optimism, though. 62% of global executives describe recent graduates as innovative and resourceful. Still, both global executives and global workers agree that new talent often lacks critical skills, including:

• Writing proficiency (cited by 35% of global executives and 28% of global workers)
• Public speaking (35% of global executives, 30% of global workers)
• Professionalism (56% of global executives, 50% of global workers)

The rise of skills-based hiring

Organizations are rethinking traditional job requirements. Nearly two-thirds (65%) of global executives say their company is moving toward skills-based hiring. And 42% of global workers say their roles don’t actually require a college degree.

This approach includes greater support for veteran hiring. In STEM sectors:

• 46% of executives say veterans bring technical skills
• 39% point to leadership value
• 31% note veterans fill quality assurance gaps

STEM workers agree, especially when it comes to the leadership and quality assurance contributions veterans add to their teams.

A growing divide in workplace perceptions

Executives and employees no longer share the same view of the workplace—and the disconnect is showing up in satisfaction, retention, and trust. Nearly nine in ten global executives (89%) say they understand worker performance, yet 16% of global workers believe leaders don't see how hard they work.

On satisfaction and loyalty, the gap widens even further:

• 42% of global executives say employee satisfaction is improving
• Only 27% of global workers agree
• In fact, 27% of global workers say their loyalty has declined

Career outlooks are diverging too. Six in ten global executives (60%) would recommend their career path to their children. In stark contrast, 59% of global workers wouldn’t—or aren’t sure. Even in fields like logistics, manufacturing, and higher education, about half of executives are hesitant to recommend their own careers.

Equity and inclusion efforts don't always match employee experience

Equity and inclusion remain a stated priority for many organizations. More than half of global executives (56%) say their company not only supports equity and inclusion, but also markets those efforts. On the employee side, most workers (57%) want that support to continue.

However, despite the headline support, many workers aren't feeling the impact in their day-to-day work. In STEM sectors, 82% of executives say they support women, but only 59% of workers agree. Zooming in on tech, the divide is even sharper: 88% of Tech executives say they support women, yet only 54% of women in tech share that view.

The same pattern shows up in broader equity and inclusion initiatives. In tech and industrial manufacturing, over 80% of global executives claim support—but only around 55% of global workers agree. Healthcare shows better alignment, with about 70% agreement on both sides.

Executives stay optimistic while workers brace for risk

When it comes to the future, executives are far more confident about the future than workers:

• 78% of STEM executives rate their industry’s 5-year outlook as very good or excellent
• Only 65% of STEM workers say the same
• 14% of STEM talent say the outlook is poor or fair—double the rate of executives

The gap is even wider in tech: just 4% of tech executives are pessimistic, compared to 17% of workers in the industry.

Tariffs (42%), generative AI (42%), data infrastructure (37%), and supply chain risks (37%) are cited as major disruptors.

How employers can turn insights into action for the future of work

To say competitive, organizations need to align their workforce strategies around three clear priorities that will define the future of work:

1. Turn AI adoption into everyday practice—not just a roadmap.
   AI tools are already reshaping how work gets done, but planning alone won’t deliver results. Companies need to close the gap between strategy and execution by investing in practical training, establishing clear policies for AI use, and giving employees the tools and support they need to integrate AI into their daily work. 
   
   
2. Prepare now for the retirement cliff
   Baby Boomer retirements are accelerating, threatening institutional knowledge and leadership pipelines. Succession planning, mentorship programs, and knowledge transfer strategies need to be in place now—not when it’s already too late. In addition to developing younger talent, solutions include reskilling existing employees, rehiring retirees in advisory roles, and rethinking how critical roles are filled and supported
   
   
3. Redfine talent through skills-based hiring
   Traditional hiring filters like college degrees don’t reflect the full picture of what someone can contribute. Skills-based hiring allows companies to cast a wider net and access adaptable talent with practical experience. At the same time, workers expect genuine opportunities for growth—and they’re paying attention to whether diversity initiatives feel genuine or performative. Career development and equity aren't side projects. They are key to attracting and keeping the people who will drive long-term success.

Workforce demands are shifting fast. Employers that move quickly and thoughtfully can build teams that are not only equipped for today's challenges, but ready to thrive in the future of work.