00 / The perspective
Artificial intelligence has moved quickly from experimentation into decisions about work. Executive teams are no longer considering only where the technology can be deployed. They are deciding which activities should remain human, which should be augmented, which can be automated and how operating models must change around that new division of work.
The public discussion tends to reduce this to a question about jobs. Inside the enterprise, however, the decision is wider. It concerns the allocation of investment across people, technology and capability, and the performance the organisation expects that combined system to produce. It reaches into organisational design, workforce planning, recruitment, learning, succession, productivity and risk. It also forces leadership to decide what the enterprise can change without weakening the capabilities on which its strategy depends.
The World Economic Forum's Future of Jobs Report 2025 captures this tension. Among the employers surveyed, 77% expected to upskill workers in response to AI, while 41% expected to reduce their workforce as certain tasks became automatable. Almost half expected to move employees from roles exposed to disruption into other parts of the business. These responses point to materially different investment choices, often being considered at the same time, rather than variations of a single workforce response.
The quality of those choices depends on what leadership can see. Most enterprises know what their workforce costs. They can describe its size, structure and movement in considerable detail. Far fewer, however, can show with comparable confidence what their people and capabilities contribute to customer performance, productivity, risk, growth and enterprise value.
That gap matters before AI changes the workforce, because a decision made with a clear view of cost and an incomplete view of value can appear economically sound while removing the very capacity the enterprise will need next.
01
The decision behind the AI jobs debate
There is no single answer to how AI will affect work. The same technology can automate one set of activities, improve the judgement applied to another, and create entirely new work elsewhere. Its effect depends on the business model, the work being performed, the maturity of the technology and the way people are reorganised around it.
PwC's 2026 Global AI Jobs Barometer reinforces this complexity. Companies in the most AI-exposed sectors recorded faster headcount growth than those in the least exposed sectors, measured against a 2018 baseline. PwC also found that AI-exposed entry-level roles were increasingly demanding capabilities usually associated with more senior work, including judgement, leadership and strategic thinking. The evidence does not support a simple assumption that greater AI exposure must lead to fewer people. Instead, it suggests that the result depends on how the technology is used and what human capability is built around it.
For leadership, the decision is therefore more demanding than choosing between people and technology. It must determine how each contributes to the performance of the whole enterprise. That requires a view of the work that creates value, the capability required to perform it, the role technology can play and the consequences of changing the current system.
This is where the quality of the available evidence becomes decisive.
02
The evidence behind the decision
A significant technology proposal is normally expected to explain the investment required, the capacity it will create, the work it will change and the productivity or financial improvement it is expected to support. The assumptions may be challenged and the return may remain uncertain, but the proposal is usually presented as an economic decision.
When Human Capital enters the same conversation, it does so through a different evidence base. Leadership can see payroll, headcount, organisational layers, recruitment cost and programme expenditure. It can monitor turnover, engagement, learning participation, performance ratings, mobility and succession coverage. Together, these measures provide an increasingly detailed description of the workforce and the Human Capital function.
The difficulty, however, arises when the enterprise asks those measures to support a capital-allocation decision. A headcount number does not explain whether capability is concentrated where strategy requires it. Labour cost does not show what performance that investment enables. An engagement score can identify sentiment, but it does not by itself establish how a change in sentiment affects customer retention, execution quality or risk. Training hours show that development activity occurred, while leaving open whether capability improved and whether that improvement changed business performance.
Technology and Human Capital are consequently brought into the same decision through evidence that answers different questions. One side is generally framed around an expected business effect, while the other is often represented through cost, activity and operational health. Human Capital evidence remains important, but it may stop before reaching the board's central question: What is the economic value of the investment in people?
03
The Human Capital Metric Autopsy
Every established Human Capital metric has a legitimate purpose. Headcount allows the organisation to understand workforce scale. Labour cost supports budgeting and financial control. Turnover indicates movement and may identify retention pressure. Engagement provides a view of employee experience. Time-to-hire tests recruitment responsiveness. Learning measures show where development effort is being directed. Spans and layers reveal how the organisation is structured.
Problems begin when descriptive measures are treated as evidence of value. A lower time-to-hire does not establish that the enterprise appointed the capability it needed. A higher engagement score does not prove that productivity, innovation or customer experience improved. Learning completion does not show whether employees can perform different work or make better decisions that improve tangible business performance. A narrower organisational layer may reduce cost while weakening oversight, coordination or specialist depth.
GC / HUMAN CAPITAL VALUE
What the familiar metrics reveal — and where they stop
Each measure is useful for its intended purpose. An investment decision requires additional evidence of capability, performance and consequence.
An evidence gap does not mean a function or measure lacks value. Representation, inclusion and wellbeing also carry important obligations beyond financial measurement.
The enterprise is not short of Human Capital data. The gap sits between the data and the economic consequence of the decision. Leadership needs to understand how a proposed investment or intervention is expected to influence the operating outcomes that matter to the business, and what evidence would indicate whether that contribution is materialising.
Financial robustness, in this context, does not require every element of human contribution to be converted into a single monetary figure. Nor does it mean placing a price on individual people. It does, however, require a credible line of sight between people investment, organisational capability, operating performance and the financial or strategic outcomes the enterprise is trying to achieve. Some of those outcomes will appear through revenue, margin or productivity. Others will appear through customer trust, risk reduction, resilience or the capacity to execute future strategy. They still need to be connected to the performance of the enterprise rather than reported as isolated Human Capital activity.
Without that connection, the board eventually returns to the measure it can evaluate with the greatest confidence: cost.
04
When cost becomes the proxy for value
Cost pressure creates real decisions. Organisations cannot preserve every role, structure or programme simply because its contribution is difficult to measure. Some work no longer warrants the capacity allocated to it. Some organisational layers add delay without adding control. Some capabilities must be replaced as strategy, customer behaviour and technology change.
The risk lies in whether the enterprise can distinguish between cost that can be removed and capability that will be expensive to recreate once it has gone.
A cost-to-income ratio can improve immediately after a workforce reduction. The financial effect is visible and can be tracked. However, the operating consequences often emerge later and in different parts of the business. Customer relationships may weaken because experienced judgement has left. Delivery slows because coordination depended on roles that appeared indirect. Risk increases because institutional knowledge was embedded in people rather than process. Growth plans are delayed because the organisation removed capacity before understanding where future demand would fall.
None of these possibilities proves that a workforce reduction is wrong. What they expose, however, is the incompleteness of a decision based primarily on the cost removed. Leadership needs to know which capability the expenditure supports, how that capability influences performance and whether technology, redesign or redeployment can preserve the value while improving the economics.
AI increases the importance of that distinction. Automating work that adds little differentiated value can release capacity and improve performance. Automating a task without understanding the judgement, relationships or control surrounding it can move cost elsewhere or weaken the outcome the task was meant to support. The same applies to reducing roles after automation is introduced. The saving is visible at the point of decision; the capability loss may only become visible when the enterprise tries to execute.
05
The voice of the CPO at the investment table
The absence of a stronger value connection affects more than the quality of the workforce decision. It shapes the influence of the CPO when that decision is made.
The Chief Financial Officer can examine an investment through its expected effect on cash, cost, margin, return and risk. The Chief Commercial Officer can increasingly connect acquisition, retention and customer lifetime value to commercial performance. The CPO, however, often enters the same discussion with measures that describe the workforce accurately but do not carry the argument into the economic consequences of the choice with equal force.
This does not reflect a lack of strategic understanding among CPOs. Many understand clearly where leadership depth, scarce capability, culture, organisational friction or workforce confidence may affect performance. The difficulty is that the evidence used to express those consequences has not travelled far enough. When the discussion turns to capital, the quantified saving can outweigh an organisational risk that remains descriptive.
The CPO's voice is therefore weakened at precisely the moment when Human Capital judgement is most important. AI, restructuring and changing business models are forcing decisions about the future composition of work. If the Human Capital contribution cannot be expressed in terms that other executives can test against enterprise performance, the CPO is left defending headcount or programmes rather than shaping the investment itself.
The CPO can strengthen that voice by building Human Capital's own credible bridge between people decisions and business performance.
06
A value-led mandate for the CPO
Given the abundance of Human Capital data, the CPO mandate now needs to extend beyond workforce reporting. It must help the enterprise understand what its investment in people makes possible and how that contribution changes when work is redesigned.
The starting point is the ambition of the enterprise. Leadership must be clear about the growth, customer, productivity, risk or transformation outcome it is pursuing. From there, the organisation can identify the capabilities required to deliver that outcome, the work through which those capabilities operate and the people, technology and organisational conditions needed to sustain them.
This creates a line of sight from business ambition to capability, from capability to workforce decisions, and from those decisions to operating and financial performance. It allows the CPO to explain where Human Capital creates value directly, where it enables other parts of the enterprise to create value, and where it protects value by maintaining control, resilience or continuity.
The distinction matters. A sales capability may influence revenue directly. A product or data capability may enable innovation and future growth. A risk or operational-control capability may protect earnings and reputation. Their contribution does not take the same form, and they should not be governed through one generic productivity measure. Each requires evidence suited to the performance it is expected to influence.
With that evidence, the CPO can participate in workforce and AI decisions before the solution has been chosen. The discussion can move beyond how many roles might be removed and consider which work should change, which capabilities become more important, where judgement remains critical and how displaced capacity can be redeployed. Human Capital becomes part of the investment logic rather than a function responsible for implementing its consequences.
07
Human Capital as an investment in enterprise value
Treating Human Capital as an enterprise investment does not mean treating people as assets that the organisation owns. It means applying greater discipline to the capital committed to workforce, capability and organisational performance. Leadership should understand what capacity that investment creates, what business performance it enables and what value may be placed at risk when the capacity is changed or removed.
GC has applied this logic across different enterprise settings. In each context, the work showed that the connection between Human Capital and enterprise performance extends beyond any single type of transformation. It becomes relevant wherever strategy depends on organisational capability and investment decisions require a clearer view of that dependence.
Reframing a Human Capital transformation
For a major African banking group, GC reframed an ambitious Human Capital agenda as an enterprise investment. The work began with the bank's strategic and financial ambitions, its customer-value opportunities and the capabilities required to compete and grow. Only then was the Human Capital transformation considered. This changed the central question from how the function should improve to what Human Capital needed to enable for the enterprise.
The resulting architecture connected the People strategy, operating model, execution capability and commercial contribution within one transformation thesis. Directional modelling allowed leadership to examine potential effects on earnings, return on equity and enterprise value, giving the CPO and Human Capital Executive Committee a stronger basis for evaluating proposed Human Capital investments.
Explore the caseAllocating workforce capital
For a global insurer and financial services group, GC examined workforce investment as a capital-allocation question. The enterprise had improved overall efficiency, yet the trajectory of workforce investment and its commercial yield required a different view. Six years of workforce economics and business performance were considered alongside customer value, organisational capability, technology and external market evidence.
The analysis shifted attention from the size of the workforce to the enterprise capacity being funded. It supported an architecture for deciding where roles, skills, sourcing, mobility, development and automation could contribute most strongly to strategic and customer outcomes.
Explore the caseBuilding the human system behind capital discipline
A capital-allocation mandate in a global energy and chemicals group approached the same principle from the opposite direction. The financial framework and governance principles had already been defined, but the organisation still required the human and operating system through which disciplined capital choices could become repeatable.
GC connected strategy, capital and risk governance with leadership, behaviour, capability, ways of working and value measurement. The work demonstrated that a technically sound capital framework cannot execute itself. The quality of capital allocation also depends on the people who interpret the framework, the capability with which they apply it and the organisational system that reinforces decisions over time.
Explore the caseAcross the three cases, the pattern is consistent. Human Capital value becomes visible when people and capability are examined in relation to the enterprise outcomes they support. In one case, that logic reframed a functional transformation. In another, it changed how workforce investment could be allocated. In the third, it showed why capital discipline itself depends on a capable human system.
Once the enterprise can see those relationships, Human Capital decisions can become more precise.
08
Making Human Capital decisions more precise
Organisational design changes when leadership can see where capability contributes to performance. The discussion is no longer limited to how many layers exist or how wide a manager's span should be. It can consider where decisions are delayed, where accountability is unclear, where specialist depth matters and where capacity should be repositioned around customers or strategic priorities.
Talent acquisition can move beyond filling approved vacancies. The enterprise can identify which roles and capabilities are most consequential to strategy, what the delay in securing them means for execution, and whether the requirement should be built internally, recruited, sourced through a partner or redesigned through technology.
Learning and development can be governed through the capability and performance it is intended to change. Participation and completion remain useful, but they become the beginning of the evidence rather than its conclusion. The more important questions concern whether people can now perform different work, whether decisions have improved and whether the capability is affecting the operating outcomes for which the investment was made.
Performance management can connect contribution more closely to the results the organisation is pursuing, while recognising that value is often created across teams and systems rather than by isolated individuals. Succession planning can distinguish between position coverage and the actual capability, knowledge and relationships placed at risk when a critical person leaves. Workforce planning can test different combinations of employees, technology, contingent capacity and partners against the work and performance the future strategy requires.
This also produces a more intelligent basis for AI decisions. Instead of beginning with the number of roles that might be automated, leadership can begin with the value the work is expected to create and then redesign the system around it. Some work will be removed. Some people will need to move. Some capabilities will become less relevant, while others will become more valuable. The enterprise can make those choices with a clearer understanding of what it is gaining, what it may be giving up and where further investment is required.
Human Capital strategy then becomes a connected portfolio of investment choices. Organisational design, talent, learning, performance and succession are no longer separate programmes competing for budget. They become different ways of building and deploying the capacity required by the enterprise.
09
The boardroom test
The enterprise does not need a perfect valuation of Human Capital before it can act. The complexity of people, work and performance will always require judgement. It does, however, need evidence that extends beyond cost and activity when leadership is making decisions with long-term consequences.
Before approving a significant workforce, technology or organisational change, the board and executive team should be able to work through six questions:
- 1. What business value is the enterprise trying to create?
- 2. Which Human Capital capabilities create, enable or protect that value?
- 3. How will AI change those capabilities and the work through which they operate?
- 4. What value could be lost through the proposed decision, and where would that loss appear?
- 5. What evidence will show whether performance is improving after the change?
- 6. How will leadership continue to govern the decision as the operating consequences become visible?
These questions do not predetermine whether leadership should invest, automate, redeploy or reduce. They improve the basis on which that choice is made. They also give the CPO a more substantive role in the decision by connecting Human Capital judgement to the performance and value concerns shared across the executive team.
AI will allow enterprises to change the workforce faster. The quality of those decisions will depend on whether leadership can see the human capability it is changing, the performance that capability supports and the value the decision is expected to create.
Make the value behind workforce decisions visible
If your organisation is preparing to redesign work, deploy AI, restructure the workforce or reconsider the capabilities it will need next, begin with the value behind the decision. Identify which Human Capital capabilities create, enable or protect enterprise value, what performance depends on them and what may be placed at risk when they change.
Germishuys Consulting works with Boards, executive teams and CPOs to connect workforce investment, organisational capability, business performance and enterprise value within one decision architecture. We help leadership determine what to invest in, redesign, automate, redeploy or reduce, and build the evidence required to govern those choices over time.
The objective is a stronger investment decision, with the value of Human Capital visible before the workforce changes.
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