Peter Lyall:

The first in a four-part series on the forces reshaping work — and the operating models built to survive them.

People have become the biggest investment line in most organisations — with their costs often the least rigorously managed.

Leaders are debating where work happens, how many days count as “hybrid”, and whether flexibility is a perk or a policy. That debate makes for good theatre. But it’s not the real issue.

The real issue is that the employment deal has been repriced at the same time three forces are converging: a trust recession, a widening skills mismatch, and AI-driven repricing of work itself. And most organisations are still managing talent with programmes and slogans rather than the discipline they apply to any other major spend.

Three forces that are hitting at the same time

1) The trust deficit

A growing number of employees have reached the same conclusion: loyalty is a one-way street.

Time-served veterans who gave decades to the firm have watched reciprocity evaporate. Goodwill is thin on the ground. “Going the extra mile” has been replaced by “going by the clock”. Tenure has shortened. Tours of duty are now the norm—not careers.

This isn’t moral decline. Employees feel they have been taken for granted and so, it’s rational adaptation.

According to an August 2025 Harvard Business Review article: when leadership teams treat culture as “a messaging strategy” (purpose statements, values rollouts, internal campaigns), it gets worse because people can smell the gap between what’s said and what’s done.

2) The skills mismatch and the training retreat

At the same time, businesses complain they can’t fill roles while investment in capability stays stubbornly hard to defend and easy to cut.

The market mismatch is visible from both sides: employers want “ready now” talent; education systems produce “ready eventually” credentials; and both sides quietly assume the other one should fix it.

Here’s the part leaders often ignore: people will leave when they feel their skills are stagnating. A 2025 Randstad Workmonitor survey cited by HR Executive found 23% of workers said they’ve left a job due to insufficient learning opportunities (up from 16% the prior year).

If that’s true, then “we can’t find talent” and “we can’t keep talent” aren’t separate problems. They’re the same problem — capability treated as a cost-centre rather than a competitive asset.

3) AI is repricing work

Then there’s the real accelerant: AI.

For a meaningful chunk of the global workforce, the nature of work itself is being challenged as never before. Even high-value tasks are being done faster, cheaper, “good enough” and that’s the bit that stings.

If the choice is 80% accurate in 20 minutes versus 90% accurate in two weeks, it’s hard to criticise an employer for taking the 20-minute option. That’s not cruelty. That’s arithmetic.

And while leaders argue about office attendance, the productivity drag is often hiding in plain sight: wasteful meetings. One HBR piece from June 2024, citing Microsoft research, notes 68% of employees say they don’t have enough uninterrupted focus time during the workday.

The great distraction: policy theatre

With these forces converging, many leadership teams reach for the familiar: more policies, more programmes, more process, more slogans, more awaydays. It looks like management. It feels like action. It is often theatre.

Some say: be more directive. Tell staff to come into the office…or else.

Others repeat the line that passes around executive circles like a nervous tic: train them and they’ll leave; worse still, don’t train them and they’ll stay.

Meanwhile, the evidence on hybrid working itself is more nuanced than most boardroom rhetoric. HBR has summarised research from August 2023 suggesting that, on average, hybrid work can have little net effect on productivity and may even increase it, depending on job type and management practices.

So, if hybrid is not the silver bullet or the villain, what is?

A lot of it comes down to whether leaders can run the business with clarity, accountability and focus—regardless of where work happens.

Apply procurement principles and marketing creativity to talent management

Imagine discovering your business’s annual travel and accommodation spend has quietly doubled to 10% of revenue rather than 5%. The individual expense claims all look “reasonable”. But you don’t run a business on reasonable. You run it on results.

So, you do what any serious operator would do. You build a baseline and a spend taxonomy. You identify leakage and duplication. You separate essential travel from habitual travel. You challenge suppliers, negotiate rates, consolidate vendors, tighten approvals, and put governance around decisions. Within weeks, you know what you’re spending, why you’re spending it, and what you’re getting back.

Now apply the same logic to your biggest cost line: people.

Start with the same procurement questions—just translate them:

Spend taxonomy: Where is people spend really going: recruitment, agencies, learning, retention, HR tech, management time, contractors, overtime, backfill, and the hidden costs of churn and vacancy drift?

Demand management: Do we actually need this role as designed — or do we need the output? Can we redesign the work, redeploy talent, simplify handoffs, or use AI to remove low-value activity before we hire again?

Supplier discipline: Are we managing external partners (recruiters, universities, training providers, platforms) against outcomes — quality-of-hire, time-to-productivity, retention in critical roles — or just paying invoices and hoping?

Governance: Who has decision rights, what are the thresholds, what gets measured monthly, and where do we see “leakage” early — regrettable attrition, capability gaps, manager churn, performance variance, productivity drag?

Most organisations will run a forensic review on a 5% overspend in travel. Then they manage personnel costs, often many times larger, with policy memos and hope.

And before anyone says “people aren’t commodities”: correct. This isn’t about treating humans like suppliers. It’s about treating people investment like capital and insisting on understanding the return. If you can’t draw a line from people spend to outcomes—productivity, quality, retention, capability, margin—you’re not investing. You’re just spending.

That’s not a strategy. It’s negligence dressed up as “culture”.

What this means for the key audiences

This article is the platform for a deeper series of pieces we’ll publish in the next few weeks as well as a future podcast series.

For now, here’s the “so what?” by audience.

For Internal and Brand Comms professionals:

Your job is no longer “broadcast what the executives said”. It’s enabling behaviour change, and you’re probably overestimating how well you’re doing. One HR Executive write-up cites a sharp perception gap: 80% of leaders think their comms are clear and engaging; only 50% of employees agree.

That gap isn’t a comms problem. It’s an alignment problem and comms is either the accelerant or the antidote.\

For HR and Talent leaders:

The centre of gravity shifts from programme operator to outcomes owner. You’ll need stronger measurement discipline and a clearer link from capability-building to business performance—especially as HR budgets tighten. A Gartner survey referenced by HR Executive reported fewer HR leaders planned to increase budgets (down to 35%) while more planned to cut spending (33%) in the year ahead.

For C-suite leaders:

Stop treating “people” as a soft subject. It’s your biggest investment line. If you can’t explain how people spend turns into performance, margin, risk reduction, or growth, you don’t have a talent strategy…you have a collection of activities.

For the market (and employees):

The trust deficit, the skills mismatch, and AI-driven repricing all push people to act like free agents. If organisations want commitment, they need a value exchange that earns it—not a slogan that demands it.

Where this series goes next

This article lays out the forces. The next four pieces will build on it:

What this means for Internal + Brand Comms (from broadcast to behaviour change).

What this means for HR/Talent (moving from activity to outcomes).

What this means for the C-suite (the operating model and the metrics that matter).

What the market is actually saying — based on a survey we’ll deploy.

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About the Authors:

This workforce management series was developed by Peter Lyall, Director of Ascent Advisory Services and Ed Davis and Kevin Beagley of Agency X, and published in partnership with Strategic.Magazine (Media Partner).

The work was created in cooperation with Malcolm O’Neal — Chief Human Resource Officer and advisor to boards and executive teams in complex, global B2B and B2C companies.