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Artificial intelligence (AI) is changing how work gets done, but the benefits are not yet clear-cut. The AICD’s latest Director Sentiment Index (DSI) reveals that almost half of directors report only small improvements in productivity as a result of AI adoption.
The DSI for the second half of 2026 draws on a survey conducted by Roy Morgan of 1,371 directors. For boards, the findings raise a practical question: how do changes to roles and day-to-day work translate into better results? The challenge is not simply to introduce new tools, but to understand what they achieve and how they affect employees.
That question comes as director confidence weakens. The index combines weighted survey responses on the economic outlook, business conditions, government policy settings and directorship conditions, with negative scores indicating pessimism. The index has fallen 18.4 points to -42.4, its lowest level since 2020. With costs rising and investment plans under pressure, the findings put the value of technology spending into sharper focus.
How AI is changing jobs
More than two in five directors (44 per cent) report workforce changes in their organisation over the past 12 months resulting wholly or partly from AI and AI-enabled automation. Redesigning existing roles was the most commonly reported change, ahead of creating new jobs or reducing the number of employees needed.
Directors reported several kinds of workforce change:
- 28% said existing roles had been redesigned.
- 15% reported new roles or job types had been created.
- 14% said fewer employees were needed in some roles.
- 10% reported some roles had been eliminated.
- 9% reported employees being redeployed to different roles.
- 9% said vacant positions had been left unfilled.
Forty-seven per cent of directors surveyed said no workforce changes had occurred in their organisations, and only four per cent said their organisation did not use AI or AI-enabled automation. The findings show that the effect on jobs is far from uniform.
The next challenge: moving beyond small gains
Changes to jobs don’t necessarily mean large improvements in output. Asked how much AI and AI-enabled automation had improved their organisation’s productivity over the past year, around half (48 per cent) of directors said only to a small extent. A third (33 per cent) reported a moderate or great contribution, while 13 per cent reported none.
How much difference is AI making?
Directors rated how much AI and AI-enabled automation had improved their organisation’s productivity over the past 12 months:
| Extent of improvement | Directors |
| To a great extent | 9% |
| To a moderate extent | 24% |
| To a small extent | 48% |
| Not at all | 13% |
| Don’t know / can’t say | 5% |
Base: all 1,371 surveyed directors, not just AI users. Figures are rounded.
The AI workforce and business-benefit questions were new this survey, so they provide a starting point rather than evidence of change. They also raise an important question for boards: what separates a useful trial from an improvement that lasts?
Broader report highlights
Beyond AI, the report captures directors’ views on the economic outlook, investment, interest rates, taxation and policy reform. Some of those views have shifted since the previous survey earlier this year:
| Finding | First half 2026 | Second half 2026 | Change | |||
| Expect a weak Australian economy over the next 12 months | 43% | 64% | ↑ 21% | |||
| Expect current monetary policy to cause a major rise in business insolvencies | 41% | 59% | ↑ 18% | |||
| Expect weak business conditions over the next 12 months | 43% | 60% | ↑ 17% | |||
| Consider a further interest rate rise within six months likely | 84% | 93% | ↑ 9% | |||
Note: Changes are percentage-point differences, not percentage changes, and do not necessarily indicate statistical significance. Second-half interest rate expectations were recorded on 22–29 September 2026.
The report also offers several standalone findings:
- Interest rates: 58 per cent agree the Reserve Bank’s approach suits economic conditions.
- Investment outlook: 39 per cent expect their organisation to invest less over the next year; 28 per cent expect an increase.
- Investment barriers: Regulatory complexity or uncertainty (52 per cent), high taxation or unfavourable tax policies (51 per cent), and policy or economic uncertainty (48 per cent) were leading detractors.
- Tax reform: Priorities for lifting productivity included personal income tax (47 per cent); capital gains, company and state-based taxes each 43 per cent.
AI’s changing place on the board agenda
AI is costing directors almost as much sleep as domestic economic conditions, with 39 and 40 per cent respectively citing each among the key issues keeping them awake at night. Cyber-crime and data security isn’t far behind, at 35 per cent.
The report’s findings suggest AI’s effect on jobs is already visible, while improvements in business performance remain uneven. Against a backdrop of rising costs and weaker confidence, the relationship between tech spend, workforce changes and measurable benefits is a central theme, also explored in the AICD’s latest guide to AI governance.
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