In a recent article, I explored the impact generative AI was having on jobs, after researchers examined changes in recruitment on a popular gig work platform. The study found that work in areas like graphic design and copywriting was significantly affected by generative AI as companies (rightly or wrongly) thought they could automate those tasks.
While tasks like graphic design and copywriting are increasingly seen as automatable, the story for managers is quite different. Research from IESE reveals that AI investments are actually increasing the demand for managerial roles, highlighting a critical shift in how organizations adapt to AI.
“Our empirical analysis demonstrates that AI adoption significantly increases the demand for managers, as firms require more managerial oversight to integrate and manage AI systems alongside human teams,” the researchers explain. “Contrary to concerns that AI might reduce managerial needs,
our results indicate that firms adopting AI tend to increase both the number and share of managerial positions.”
Managerial oversight
The researchers analyzed nearly 400 million job vacancies posted in the United States between 2010 and 2022 and found that when organizations started investing more in AI, they also recruited more managers. Interestingly, this not only meant more managers in absolute terms but also in relative terms as a proportion of the workforce.
The researchers also found that the skills profile of managers changed, with managers with key cognitive and interpersonal skills in high demand. This is in marked contrast to a previous study of the impact investment in robotics had on the workforce in France. This found that while there was negligible impact on jobs across the board, there was a pronounced fall in managerial jobs as workers were more productive and therefore didn’t need so much supervision.
The IESE researchers believe that this reflects the changing nature of management in an AI age, with tasks shifting from more basic oversight to complex decision-making and strategic oversight. It also stems from the need to align AI outputs with business goals, manage the human-AI interface, and address the complexities AI introduces into decision-making processes.
“Furthermore, while AI adoption raises managerial salaries, it does so in a way that reflects broader labor market trends, suggesting that firms value both managerial and non-managerial roles more as they integrate AI,” the researchers say. “Overall, our findings underscore the profound organizational changes AI brings, particularly in enhancing the strategic importance of managerial expertise.”
Managing in an AI age
So what does management look like in the AI age? A start is to make better use of data when making decisions, as AI significantly helps us to analyse vast quantities of data both quickly and accurately. AI is also essentially a predictive technology, so this can be tapped into to spot market trends, customer behaviour, and operational inefficiencies. These can help us to forecast the future more efficiently and optimize our resources.
Managers should also be using AI tools when performing their various roles, including in project management, employee evaluation, and supply chain optimization. This collaboration with AI can augment leadership and ensure managers make better decisions.
For example, at Novartis, they had real-time information being shared, but this required AI to crunch the data to provide useful sales forecasts. By using AI, they removed things like politics and negotiations from the tasks performed by managers. Errors were also reduced, with managers tasked with supervising and validating the AI outcomes.
This required a change in how the company operated as it allowed the company to create multiple scenarios, with investment, production, and cash flow decisions joining forces with the sales forecasts. This increased the responsibilities of managers, both in a direct sense and also in redesigning this process to effectively utilise AI.
The experience at Novartis exemplifies how AI transforms management by shifting focus from routine oversight to strategic integration and scenario planning. This reflects the broader trend of AI-driven changes in managerial responsibilities.
Rethinking management
As technology races ahead, artificial intelligence (AI) is reshaping nearly every part of modern life. Industries are being disrupted, workforces are shifting, and decisions are being made in new ways. Nowhere is this impact more clear than in management.
From factory floors to boardrooms, AI is changing how organizations run, compete, and grow. With AI tools guiding tasks and strategies, businesses are rethinking what it means to manage and lead effectively.
“Contrary to the common narrative that AI will lead to a reduction in management layers, the process of AI integration itself might actually increase managerial intensity,’’ the IESE researchers explain. “The need for more nuanced oversight, the complexity of managing the human-AI interface, and the interpretation of AI outputs all contribute to this likelihood.”
This does mean that new skills will be needed with managers needing to develop their digital literacy levels in order to effectively work with the new AI tools, all while retaining the soft skills, such as empathy and creativity that will remain crucially important for effective leadership. It will also place a renewed focus on strategic capabilities so that organisations can redesign the way they work to effectively capitalise on what AI can do for the business.
Managers are uniquely positioned to harness the transformative potential of AI. By combining digital literacy with timeless leadership skills like empathy and creativity, they can drive innovation and ensure that AI delivers meaningful outcomes for both organizations and their people.
