Organisations Face Growing Uncertainty Amid AI Expansion and Talent Shortages
Indian organisations are navigating an increasingly uncertain business environment shaped by the rapid integration of artificial intelligence (AI) and a worsening shortage of skilled talent, according to the 2026 People Risks Report released by Marsh. The study identifies increased health and benefit expenses, resistance to AI adoption, changing regulatory requirements and inadequate cyber threat awareness among the most significant risks confronting human resources and risk management professionals.
The report draws on responses from more than 4,500 HR and risk professionals across 26 markets worldwide. India accounted for 311 participants, including 155 HR professionals and 156 risk specialists. The findings suggest that technological disruption, mounting economic pressures and evolving workforce dynamics are fundamentally altering the enterprise risk landscape. In India, these people-related challenges are having a direct impact on organisational resilience and overall business performance.
AI-Related Workforce Risks Move to the Forefront
One of the most notable developments highlighted in the report is the rise of AI-related workforce concerns. A mindset barrier toward AI adoption has emerged as one of the leading people risks for organisations in India. Nearly 49% of respondents expressed concern about investing in AI technologies without providing employees with the necessary training and support to use them effectively.
Cybersecurity awareness has also become a major concern. The report ranks inadequate cyber threat literacy as the third-largest workforce risk, with 52% of respondents worried that employees lack sufficient understanding of digital threats and the measures required to mitigate them.
Although organisations continue to invest heavily in technology and digital transformation, the findings indicate that technology spending alone may not deliver the expected benefits. Respondents noted that focusing primarily on technological and capital investments without making comparable investments in employee development could significantly reduce the effectiveness and value of AI initiatives.
Employees See Both Opportunity and Risk in AI
Commenting on the findings, Prawal Kalita, Managing Director and India Leader, Mercer Marsh Benefits, said that AI-related workforce risks have become one of the most significant trends identified in the latest edition of the report.
According to Kalita, employees increasingly view AI as a tool capable of improving productivity and supporting career development. However, many workers simultaneously perceive the technology as a potential threat to their future employment prospects. This dual perception is contributing to a growing psychological barrier that is slowing AI adoption within organisations.
The report suggests that the challenge is not solely technological in nature but is closely linked to workforce confidence, trust and readiness. As organisations accelerate AI implementation, employee concerns about job security and changing workplace expectations are becoming more pronounced.
Addressing AI Anxiety Through Communication and Training
The survey emphasises that organisations can reduce AI-related concerns by recognising employee anxiety as a genuine workforce issue rather than treating it only as a technology challenge. Clear communication regarding the role of AI within a company’s long-term business strategy is considered essential for building employee confidence.
The report also recommends involving employees in the planning, design and implementation of AI initiatives to foster trust and encourage a sense of ownership. In addition, organisations are encouraged to invest in ongoing reskilling and upskilling programmes to help workers adapt to evolving job requirements.
Creating environments where employees can safely experiment with AI tools and learn new technologies without fear of failure is another key recommendation. Alongside these measures, strong data privacy frameworks and cybersecurity protections are viewed as critical for ensuring responsible and confident AI adoption across the workforce.
Labour Shortages and Leadership Challenges Remain Major Concerns
Beyond AI-related issues, India’s workforce risk profile includes labour shortages, shortages of specialised technology skills and growing employee financial insecurity. The report also identifies concerns related to transparency, fairness and inclusion, a changing regulatory environment, deteriorating mental health and inadequate management of investment risks within employee benefit programmes.
Labour shortages are ranked as the leading concern among HR professionals in India and the fourth-largest workforce risk overall. The findings reflect continued pressure on organisations to attract, retain and develop critical talent in an environment characterised by significant skills mismatches.
Leadership capability has emerged as a particularly influential risk factor. According to the survey, 62% of respondents believe inadequate supervisory and leadership skills could have a catastrophic or high impact on their organisations. Weak leadership can contribute to a range of challenges, including declining mental health, workplace misconduct and unsafe working environments. Despite these concerns, only 46% of respondents reported having highly effective leadership assessment systems in place.
Financial Insecurity and Mental Health Add to Workforce Pressures
The report further highlights transparency, fairness and inclusion as prominent concerns within India, where these issues rank among the top five workforce risks. Their higher ranking compared with global results indicates that leadership behaviour and equitable treatment of employees are increasingly viewed as measurable business risks.
Employee financial insecurity ranks eighth among India’s workforce risks. Survey participants identified financial stress as a factor that can negatively affect employee retention, engagement, workplace conduct and even cybersecurity awareness.
Mental health deterioration also remains a significant concern. More than 54% of HR and risk professionals surveyed in India expressed concern about insufficient support for employees’ mental health and emotional well-being. Additionally, 41% of respondents stated that risks associated with unsafe physical or psychological working conditions could have a catastrophic or high impact on their organisations.
Workforce Investment Seen as Key to Long-Term Resilience
The findings of the 2026 People Risks Report indicate that Indian organisations face a complex mix of technological, economic and human-capital challenges. While AI adoption continues to accelerate, the report stresses that successful implementation will depend not only on technological investment but also on workforce preparedness, leadership effectiveness, employee well-being and cybersecurity awareness.
As businesses navigate a rapidly evolving risk environment, the study underscores the importance of investing in people alongside technology to strengthen organisational resilience and support sustainable long-term growth.
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