Rising employment costs have driven many UK businesses towards investing in AI instead of hiring new employees, while workers are resisting efforts to increase office mandates in favour of working from home (WFH).
New research from Linkedin and Pleo has revealed the tension between using AI as a cost-saving tactic, and the need for meaningful human collaboration in the workplace.
Janine Chamberlin, head of Linkedin UK, told CityAM that the platform has recently seen a far higher application rate for hybrid and remote jobs compared to in-person roles.
The impact of AI has also had a huge impact on the employment sector, with 70 per cent of skills for jobs predicted to change by 2030.
Rising costs push businesses towards AI
With a combination of national insurance and minimum wage increases, many UK business leaders are turning to AI as a more cost-effective alternative to expanding their workforce.
Pleo’s latest data revealed that over half of UK businesses (59 per cent) were more likely to adopt AI than hire new staff.
This shift is driven by financial pressures as well as the perceived ease with which AI can boost productivity.
Its report found that nearly six in 10 business leaders admitted that introducing automation was simpler than inspiring their workforce, a figure that only rose among firms already investing in AI.
Chamberlin said: “What we’re seeing even more of is companies looking to hire people who know how to work with AI.”
“Naturally, policy changes are going to have an impact. However, I think there is a much bigger trend I’m seeing in the UK, which is people hiring for skill sets that are much harder to find,” she added.
Despite the promises of AI, many firms are finding implementation challenging.
Almost half of business leaders (47 per cent) reported that digital overload was pushing them back to traditional tools.
The struggle of incompatible systems is also taking a toll on productivity, with workers spending an average of 123 hours a year, equivalent to over three working weeks, switching between tools that don’t integrate well.
A recent survey by ANS and Yougov also highlighted this problem, with 35 per cent of UK businesses citing a lack of expertise as the biggest hurdle to AI adoption.
“AI is transforming all of our jobs, at a much faster pace than it was before”, Chamberlin added.
Employees push against office mandates
At the same time, employees are resisting rigid return to office mandates.
Research from Linkedin found that over half of UK employees did not want their employers to increase mandated office attendance.
Yet the majority still recognised the value of in-person interactions in certain situations.
“Employees are still keen on in-person meetings for moments that matter, like brainstorming or making key decisions”, Chamberlain said. “But they don’t want to come into the office just for the sake of it”.
According to figures by Morgan McKingley, in the UK over half of workers (51 per cent) would forgo a pay rise in order to not work from the office full time.
Employees are also more likely to feel confident in closing deals and making important decisions when meeting face to face, with 59 per cent saying they would be more inclined to spend with a supplier they had met in person.
As a result, UK business leaders have adjusted their strategies to offer more hybrid, flexible options, to ensure that in-person time could be made more productive.
Chamberlin emphasised the importance of this approach, saying that the future of work was not about forcing employees back into the office, but ensuring the time that was spent in person, was valuable.
“You need to keep employees motivated, improve productivity and make in person time count”, she said.
LinkedIn’s latest work change report found that 39 per cent of UK business leaders were redesigning their hybrid policies in 2025, with flexibility remaining a priority.
Broader WFH trends
This shift towards flexibility has been played out globally, with international executives, like Kate Johnson, chief executive of Lumen, pushing for a hybrid model.
She emphasised that an “all in, all out” approach didn’t work for her workforce.
“Our employees are much happier and more productive with a balance between work and personal life”, she said.
Pat Geraghty, chief executive of Guidewell, also advocates for a hybrid approach as he lets his workers decide whether to come into the office.
“They don’t have to commute, buy work clothes, or lose that chunk of their day”, he said.
But a few key figures have advocated for the end of remote work.
Sadiq Khan recently expressed concern about the decline in office attendance and urged employers to attract workers back.
He warned that London “cannot afford” to become a city where the centre is “hollowed out” due to remote working.
Across the pond, Musk announced that he may terminate remote work for millions of federal employees.
He said: “Requiring federal employees to come to the office five days a week would result in a wave of voluntary terminations that we welcome”.
And companies like Amazon and Walmart have already announced full 5-day week return to office mandates, leading in an exodus of high performing employees.