UK employers accelerate AI adoption as workforce pressures reshape how work is delivered, SD Worx finds

UK employers are increasingly turning to artificial intelligence to manage workforce pressures and reshape how work is delivered, according to new research from leading European HR and Payroll provider, SD Worx.

The findings build on earlier SD Worx research from the 7th of May around pay transparency, showing persistent capacity pressures across UK organisations, with two in five employers reporting they do not have enough staff to get work done. Against this backdrop, AI is emerging as a practical response to workforce constraints, rather than a purely experimental technology.

AI adoption in the UK is now entering a new phase. The research shows 65% of UK employers are actively exploring AI for the workplace, placing the UK ahead of the European average of 54%.

This shift is being driven by operational necessity as much as innovation. More than half (52%) of UK employers say AI and automation are already prompting them to redesign workflows and reduce the need for certain roles and tasks, suggesting organisations are beginning to adjust how work is structured in response to ongoing capacity pressures.

At the same time, 40% say they are increasingly relying on AI to drive productivity gains rather than increasing headcount, reflecting a broader shift away from traditional hiring-led approaches to workforce scaling.

Nearly half (46%) expect their organisation to operate with a smaller workforce in the coming years, indicating that AI is now influencing long-term assumptions about workforce size and structure.

The impact is particularly visible within HR itself, where AI is both being adopted and driving organisational change.

Some 44% of UK employers are already using AI-powered agents within HR, while the same proportion expect AI and automation to reduce the size of HR teams within the next year. This suggests HR is both at the forefront of adoption and directly exposed to the structural changes it enables.

Workforce planning is playing an increasingly important role in this transition, with 30% of employers citing preparation for AI and automation as a key driver of workforce planning priorities, underlining how closely AI adoption is now tied to broader organisational management.

Alongside AI adoption, employers are actively rethinking how their workforces are structured and supported.

Half (51%) of UK employers are investing in reskilling and upskilling to support an AI-enabled workplace, while 50% say they are redesigning HR operating models to enable more effective human-AI collaboration. A further 49% report having dedicated budget in place for AI investment within HR.

This reflects a shift from point solutions to organisational redesign, with AI increasingly influencing not just tools, but skills strategies and operating models.

As adoption accelerates, organisations are also putting frameworks in place to manage risk and ensure responsible use.

Six in ten (60%) UK employers now have governance measures in place to ensure AI is used ethically and responsibly in HR, significantly ahead of the European average of 47%.

However, translating AI adoption into measurable outcomes remains a challenge. Among organisations not yet seeing significant results, the most common barrier is a lack of internal skills or expertise (34%), followed by cultural resistance (31%) and misalignment with business priorities (29%).

Looking ahead, employers are prioritising AI investment in the systems that underpin workforce decision-making.

Reporting and analytics (32%) ranks highest, followed by performance management (29%) and payroll management (29%). Workforce planning and scheduling (27%) and learning and development (27%) also feature strongly.

This suggests AI is becoming embedded within the core infrastructure of workforce management, shaping how organisations measure performance, allocate resources and plan future capability needs.

Overall, the findings indicate that AI is increasingly being used as a response to ongoing workforce pressure, with organisations moving from reactive staffing approaches towards more structural, technology-enabled workforce design.

SD Worx, the leading European provider of HR and payroll services, supports both small and large organisations in addressing their HR and payroll challenges. To stay in touch with employers and employees, SD Worx regularly conducts in-depth surveys across Europe. The analysis of the most recent “HR & Payroll Pulse” survey offers organisations valuable insights to refine their HR and payroll strategies and make them future proof.

The survey was conducted between January 27 and February 15, 2026, in 16 European countries -  Belgium, Croatia, Finland, France, Germany, Ireland, Italy, Luxembourg, Norway, Poland, Romania, Serbia, Slovenia, Sweden, The Netherlands, and the United Kingdom - by the SD Worx Research Institute. A total of 5,936 HR decision-makers / employers were surveyed. The results provide a representative picture of the labour market in each country.