The AI talent challenge nobody is talking about.
Artificial intelligence is rapidly becoming the defining business story of the decade. Organisations are dedicating significant resources to automation, data systems, and AI tools to increase productivity and efficiency, accelerate decision-making, and cut costs-but this focus risks overlooking deeper organisational implications.
The commercial logic for the uptake on AI is clear. Those businesses that cannot adapt to a rapidly changing business environment risk falling behind their rivals, who can move faster and operate more cheaply. This is inevitable.
Despite the excitement about AI, a critical long-term risk remains largely absent from the debate: how automation might undermine leadership development pipelines.
What if, in automating, companies are removing essential roles that have historically nurtured future leaders?
This is a question all organisations should be asking themselves.
Baker Tilly research found that 57% of business leaders believe AI could cause a future leadership crisis by replacing or reforming many entry- and mid-level positions.
While most discussion of AI has focused on productivity and innovation, much less attention has been paid to what this shift will mean for the development of leaders and leadership skills over the next ten to fifteen years.
This could become one of the most significant yet underestimated labour challenges for businesses.
Where future leaders traditionally learned their skills
For decades, leadership development followed a fairly predictable pattern.
Graduates and junior employees typically joined businesses through operational or support roles, gradually gaining experience upon which to build a career path. These positions gave them exposure to the realities of commercial life. They learned how organisations operated on a day-to-day basis, dealt directly with customers, managed competing deadlines, learned how to work under pressure, and solved problems as they came along. Over time, this direct experience helped build and develop skills such as commercial awareness, professional judgement and the confidence needed to take on greater responsibility.
Most senior leaders did not start out on their careers by making strategic decisions. They learned through exposure, repetition and responsibility. The early stages of a career often provide something more valuable than technical knowledge alone. They help people develop judgement.
That process matters because leadership is rarely developed in a classroom environment. It is usually formed through practical situations, difficult conversations, learning from mistakes, setbacks and experience gained over many years.
Many core roles previously held by senior leaders are now among the most vulnerable to AI disruption.
Administrative support, reporting, research, scheduling, data analysis, and routine communications are increasingly automated or enhanced by AI. Many juniors already use technology to handle tasks that once required human effort.
From a productivity standpoint, automation is a major breakthrough - but it disrupts essential development steps for emerging leaders. From a leadership perspective, this disturbance poses unresolved risks to the development of future leaders.
The risk is not just job loss - it is capability loss
The real danger is not merely that some jobs disappear. The real risk is that, by automating key roles, organisations may lose vital training opportunities for future leaders.
The business environment is now described as VUCA-dominated, characterised by greater volatility, uncertainty, complexity and ambiguity. The result of a VUCA world is that economic uncertainty, geopolitical instability, cybersecurity threats, compliance pressures and rapid technological change are compelling leaders to make decisions amid increasingly complex conditions.
Senior executives who succeed over the next decade will need much stronger communication skills, resilience, adaptability, and the ability to lead during difficult times. Ironically, these capabilities are least likely to be developed solely by automation.
The Baker Tilly findings reflect this growing concern. Business leaders identified effective communication, problem-solving, and leading during uncertainty as the most important skills for success by 2035.
Yet only a relatively small proportion believe their organisations are currently strong in these areas.
This ability gap should be a top priority for employers seeking future leadership strength and depth. Although technology investment continues to surge, far too little attention is being paid to how leadership capacity will be sustained in an automated future.
Experience still matters
There is also a wider cultural issue emerging across organisations.
For many younger employees, the early stages of a career have traditionally provided far more than technical training. Much of what people learned came through everyday workplace experience - sitting in meetings, watching senior colleagues handle pressure, dealing with customers, managing setbacks, and gradually being trusted with greater responsibility. Over time, these experiences helped to build confidence, judgement and professional maturity in ways that official training programmes often cannot fully replicate.
If AI reduces the importance of such formative roles, businesses may end up with technically capable employees who lack the essential judgement and confidence for leadership. That creates a markedly different workforce dynamic.
Future organisations could become highly efficient yet struggle to develop leaders skilled in managing people, navigating through times of crisis, or making decisions under pressure. Technology can process information rapidly, but leadership depends on trust, emotional intelligence, communication, and reliability.
These qualities remain difficult if not impossible to automate.
The organisations that change early will gain a major advantage
This challenge is likely to become particularly important for mid-market businesses.
Large organisations sometimes struggle to redesign their workforce structures quickly because of bureaucracy and organisational complexity. Mid-sized firms may be better placed to adapt their talent strategies earlier and more effectively.
Baker Tilly research shows that mid-market organisations have advantages such as agility, less bureaucracy, and closer proximity to senior decision-makers. These advantages are increasingly valuable as workforce models rapidly change.
Businesses that recognise the leadership pipeline risk early are likely to gain a significant competitive advantage.
Leadership development will require deliberate, proactive investment in opportunities for emerging talent, rather than passive reliance on past models.
A future leadership development could include:
More structured mentoring
Greater cross-functional exposure
Earlier participation in decision-making
Rotational development programmes
Increased client-facing responsibility
Earlier introduction of communication and leadership training
Greater investment in resilience, communication and hands-on decision-making skills
Ultimately, firms can no longer assume that future leaders will naturally emerge from traditional career structures alone. As AI reshapes many early-career roles, organisations will need to think far more critically about how younger employees gain real experience, develop judgement and build the confidence required to lead. The companies that adapt successfully will be those that create deliberate opportunities for people to learn through responsibility, collaboration and exposure to real business challenges, rather than allowing technology to gradually remove those developmental stepping stones altogether.
AI will change leadership - not replace it
None of this suggests that businesses should resist the adoption of AI. The commercial opportunities created by artificial intelligence are enormous, and organisations that fail to modernise are unlikely to remain competitive in the long term.
Organisations must distinguish between automation for efficiency and the protection of the core human skills required for leadership.
But technology investment alone is unlikely to be a lasting competitive advantage, as access to AI tools becomes increasingly widespread. What may ultimately separate successful organisations from weaker competitors is how effectively they integrate technology with strong human leadership.
Long-term competitiveness will depend on developing leaders alongside automation - not merely on accelerating operational speed.
The companies most likely to thrive and grow over the next decade are unlikely to be those that simply remove labour fastest. They are more likely to be the organisations capable of building resilient workforces, developing adaptable leaders and creating cultures in which technology strengthens human capability rather than gradually replacing it.
Organisations should take concrete steps now to assess and strengthen their leadership pipeline. This includes identifying key experiences needed for leadership, investing in early development opportunities, and aligning talent strategies with the changing landscape as AI transforms the workplace. Acting intentionally today will help guarantee long-term success.
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