Why Businesses Need More Managers, Not Fewer
The narrative surrounding artificial intelligence (AI) often includes predictions of widespread automation and a potential flattening of organizational hierarchies. Many have speculated that as AI takes over routine tasks, the need for human managers would diminish. However, recent in-depth research challenges this assumption, revealing a surprising counter-trend in the labour market. A comprehensive study analysing over 375 million US job vacancies has uncovered that companies actively integrating AI technologies are, in fact, increasing their demand for managerial roles.
The Growing Need for Skilled Managers
While the impact of AI on various job functions is a subject of ongoing discussion, new evidence suggests a compelling dynamic at play within management structures.
According to research from IESE Business School, adoption is driving a greater demand for leadership, particularly for managers with strong cognitive and interpersonal skills. As businesses implement AI-driven processes, they require professionals adept in collaboration, creativity, and problem-solving to oversee these technological shifts effectively.
The study found that when companies use AI more intensively, their managerial vacancies rise—both in absolute numbers and as a proportion of total job openings. In fact, for every 1% increase in AI adoption, managerial job postings jump by 2.5% to 7.5%.
Why AI Doesn’t Replace Managers—It Reinforces Their Role
Far from making managers obsolete, artificial intelligence is expanding their responsibilities. The research suggests that as systems become more complex, businesses need leaders to coordinate between human teams and AI tools. This demonstrates that rather than replacing managers, automation is powering up the need for their strategic guidance. Managing this interaction is crucial to ensuring efficiency, ethical oversight, and strategic decision-making.
Additionally, systems are not a “set and forget” solution. They require continuous monitoring, fine-tuning, and human oversight to function effectively. This adds a layer of complexity that reinforces the necessity of skilled management.
The EU AI Champions Initiative
The newly established EU AI Champions Initiative aims to accelerate adoption across Europe by coordinating efforts between technology, industry, capital, and policy. With backing from major players like Airbus, Siemens, Deutsche Bank, and Volkswagen Group, this initiative seeks to mobilise talent and investment, fostering AI-driven growth in established industries.
As artificial intelligence becomes more deeply embedded in European businesses, the demand for strategic managerial oversight will only grow. The initiative’s commitment to AI transformation highlights the increasing need for leaders who can navigate the evolving landscape, ensuring both technological advancements and ethical considerations are managed effectively.
Furthermore, with over €150 billion earmarked for AI investments in the next five years, businesses that proactively integrate AI with strong leadership structures will be well-positioned for success. The EU’s approach underscores how critical it is for companies to develop management teams capable of steering innovation.
Balancing Automation and Human Expertise
While AI may replace certain non-managerial roles, the study highlights that businesses investing in it tend to see an overall shift in workforce composition rather than a complete reduction in jobs. As automation enhances productivity, firms recognise the value of both managerial and non-managerial employees, leading to increased salaries and career growth opportunities.
The Future of Work
The findings challenge the notion that artificial intelligence will lead to flatter corporate structures with fewer leadership roles. Instead, they indicate that businesses will need more capable managers to navigate AI’s complexities. By embracing AI as an enabler rather than a disruptor, companies can create workplaces where human intelligence and artificial intelligence work hand in hand.
At The Small Consultancy, we help businesses adapt to evolving work environments by offering expert talent solutions and strategic insights. If you’re looking to build a future-ready workforce, we’d love to help you navigate these changes. Find out more here.