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Gartner: Over 80% of company leaders plan to permit remote work after pandemic

Dive Brief:

• More than 80% of company leaders surveyed by research and advisory firm Gartner said their organizations plan to permit employees to work remotely at least part of the time upon reopening from the COVID-19 pandemic, Gartner announced July 14.
• The survey of 127 HR, legal and compliance, finance and real estate professionals also found that 47% of respondents said they intend to allow employees to work remotely on a full-time basis, while 43% would grant flex days and 42% would provide flex hours.
• The majority of respondents said they were not worried about maintaining productivity under a "hybrid workforce" model, according to Gartner, but nearly one-third (30%) were most concerned about maintaining corporate culture. Sixty-one percent of respondents said they had implemented more frequent check-ins between employees and managers.

Dive Insight:

The pandemic has caused companies to not only move much of their workforce to remote status, but also create support systems and architectures that may allow permanent access to remote work and other forms of flexibility in the future.

Employers have buoyed this trend in recent months with announcements of permanent work arrangements. In May, Facebook CEO Mark Zuckerberg said that more than 95% of the company's workforce was working remotely and that it planned to make adjustments to ensure employees could continue to do so on a long-term basis. Verizon-owned phone service company Visible announced earlier this month a plan for all employees to move to permanent work-from-home status. Twitter launched a free, eight-week virtual program, called Camp Twitter , aimed at supporting working parents by allowing their children to participate in classes and other activities during the summer, Human Resource Executive reported.

Additionally, HR professionals appear to be supportive of remote-work arrangements. More than half of HR respondents to a recent survey by social network Fishbowl said they would elect to continue working remotely permanently. But other research has found that not everyone is onboard with a permanent shift: two-thirds of organizations who responded to a WorldatWork survey published last month said they would resume in-office operations by the end of the summer , if not sooner.

Some employee groups have experienced hurdles to remote work, however. During the initial wave of response to the pandemic in March and April, more than half of knowledge workers surveyed by workforce management software firm Asana said they lacked access to a dedicated desk, personal computer, laptop or reliable internet connection. A March report from the left-leaning Economic Policy Institute found that smaller percentages of Hispanic or Latino and Black or African American workers were able to work from home compared to their Asian and white counterparts.

"The question now facing many organizations is not how to manage a remote workforce, but how to manage a more complex, hybrid workforce," Elisabeth Joyce, VP of advisory at Gartner's HR practice, said in the firm's statement. "While remote work isn't new, the degree of remote work moving forward will change how people work together to get their job done."

Employers might be able to use the current moment as an opportunity to focus on initiatives that improve workers' sense of belonging, sources previously told HR Dive. Ideas for doing so include "windowed work,"  which describes a system in which employees are able to reconfigure their workweek so as to make it more flexible. Managers can also improve workflows by setting regular virtual check-ins and using a group approach for setting goals.

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9 Tips for Managing Remote Employees

April 2, 2020 Contributor: Mary Baker

Make remote work more productive and engaging for employees with these empathetic but practical actions.

Vast numbers of employees now work remotely, and it is too late to develop a set of remote-work policies if you did not already have one. But there are ways to make the remote-work experience productive and engaging — for employees and the organisation.

“At most organisations, scenario planning focuses on the necessary operational responses to ensure business continuity. Few of these plans address the ability or bandwidth of employees to focus on their work,” says  Brian Kropp , Distinguished Vice President, Research, Gartner.

HR should help managers with nine specific activities to ensure employees get the requisite support to tackle the emotional roller coaster of this crisis — and are productive and engaged.

1. Be on the lookout for signs of distress in your employees

Use both direct conversations and indirect observations to get visibility into employees’ challenges and concerns. Use every opportunity to make clear to employees that you support and care for them. To facilitate regular conversations between managers and employees, provide managers with guidance on how best to broach sensitive subjects arising from the COVID-19 pandemic, including alternative work models, job security and prospects, impact on staffing and tension in the workplace.

2. Equip employees

Make sure employees have the technology they need to be successful, which may be more than just a mobile phone and laptop. For example, if you expect employees to attend virtual meetings, do they have adequate cameras?

Even if you do not have an extensive set of technology and collaborative tools available, you can equip employees to function effectively when remote. But do not just assume that people know how to operate with virtual communications — or are comfortable in that environment. 

Acknowledge that virtual communications are different — and will not be perfect — but should still be professional and respectful of others. Be mindful that virtual communications may be less comfortable and effective for some, and coach employees on when and how to escalate ineffective virtual exchanges. For example, if you have not settled an issue in six emails, the conversation may need to be elevated to a virtual meeting to get closure.

3. Promote dialogue

Two-way dialogue between managers and employees ensures that communication efforts help, rather than hurt, engagement. Gartner research shows that employees’ understanding of organisations’ decisions and their implications during change is far more important for the success of a change initiative than employees “liking” the change.

Two-way communication with managers and peers provides employees with the information and perspective they need, and enables them to express and process negative emotions and feel more in control. Managers can create opportunities for two-way dialogues that focus on a realistic picture of both the positive and negative implications of the current COVID-19 outbreak.

4. Trust in your employees

“The best thing you can do as a manager right now is to suspend your disbelief and put utmost trust and confidence in your employees that they will do the right thing — which they will if employers provide a supportive structure,” says Kropp.

Managers may be concerned and even frustrated to lose the constant visibility they once had into their employees, but do not respond by micromanaging. That will only disengage and fatigue already stressed employees. Do not fixate on perceived performance problems; you will have plenty of time to lean on established performance management systems once the height of the crisis abates.

5. Reinforce organisational values

“Even before this crisis, employers were increasingly treating employees as key stakeholders. During this crisis, you can show employees that you plan to look out for them for the long haul,” says Kropp.

Many companies have spent the past couple of years building a set of values that describe how much they care about their employees, and how it’s important for them to create great lives and experiences for their employees. Make sure to reinforce these values with employees.  

Also continue to model the right behaviours — and encourage employees to call out unethical conduct. During periods of uncertainty, employee misconduct increases by as much as 33%. Remind employees of the channels for reporting misconduct and highlight punitive measures for noncompliance. This will promote work well-being — which has a huge impact on feelings of psychological safety.

6. Use objectives to create clarity

Role definitions may start to fall apart during the disruption, leaving employees unsure of where to focus. Focus on what employees should be accomplishing. Emphasise objectives over processes to create greater clarity for employees — and drive greater engagement levels.  

“One of the top engagement drivers for employees is seeing their work contribute to company goals,” says Kropp. “Employees who feel confident about the importance of their job to the success of the organisation feel less anxious about their job security.”

7. Focus on outputs not processes

In the remote landscape, where many people are juggling work and family commitments in their own homes, enable employees to complete their work in ways that are easiest and most productive for them.

Your 9 a.m. team meeting may have to go or you may have to forgo a lengthy approval process. Schedule collaboration at a mutually agreeable time, and lean on virtual tools wherever possible. Providing flexibility empowers teams to complete their assignments in their own way. 

“As a manager, you have to stop paying attention to the process and pay more attention to what things are getting done. Just talk to your team about what you want them to accomplish,” says Kropp.

8. Increase recognition

“During periods of disruption, employees’ desire for being recognised for their contribution increases by about 30%,” says Kropp.

Effective recognition not only motivates the recipient, but serves as a strong signal to other employees of behaviours they should emulate. Recognition does not need to be monetary; consider public acknowledgement, tokens of appreciation, development opportunities and low-cost perks. Managers at organisations facing a slowdown can take this opportunity to provide development opportunities to employees who normally do not have capacity.

“Use simple pulse surveys to ask specific questions or track output to collect data and find areas of recognition”

Managers previously identified employees’ work and contributions within the traditional office space, but they are now required to recognise more with less visibility. Remote workers and managers have limited unintentional interactions and fewer group interactions where colleagues can meet and share stories. 

Given the lack of visibility in a remote environment, try to improve your monitoring techniques and relationships with direct reports. Use simple pulse surveys to ask specific questions or track output to collect data and find areas of recognition. By meeting with employees virtually and asking what barriers they have overcome or ways peers have helped them, you can identify elements to recognise, thank and share the accomplishments of teams and their members.

9. Encourage innovation

With businesses sheltering in place amid high levels of uncertainty, managers and employees may understandably become more risk-averse. “There’s a natural hesitancy amongst employees during disruptive times to be afraid to try something new,” says Kropp.

But it is during such times that innovation and risk-taking become even more important for employee engagement and organisational success. The disengaging effect of constraints on innovation and risk-taking are particularly severe for high-potential (HIPO) employees, who tend to have a stronger desire for these types of opportunities. Even when the organisation has constraints on new investments, managers can emphasise the need and provide opportunities for incremental innovation or process improvements. 

Provide opportunities to share successes and safety for potential failures. The confines of social distancing mean that when employees take a risk and succeed in improving their productivity, only a few connections can build on that success. Make an effort to highlight the value of employees’ continuing to scale their activities, and ensure that any risks are worthwhile.

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Research: Where Managers and Employees Disagree About Remote Work

• Nicholas Bloom,
• Jose Maria Barrero,
• Steven Davis,
• Brent Meyer,
• Emil Mihaylov

Part of the disconnect hinges on how productivity is measured.

Survey research suggests that managers and employees see remote work very differently. Managers are more likely to say it harms productivity, while employees are more likely to say it helps. The difference may be commuting: Employees consider hours not spent commuting in their productivity calculations, while managers don’t. The answer is clearer communication and policies, and for many companies the best policy will be managed hybrid with two to three mandatory days in office.

Remote work is one of the biggest changes to working since World War II, but it’s being held back by a major disconnect between managers and employees. Case in point is Elon Musk. He decreed in November that employees must come into the office, only to walk it back after it threatened to speed up the pace of resignations. It was a “hardcore” mistake by Musk, but a less dramatic version of the same story is playing out across the economy.  

• Nicholas Bloom is a professor of economics at Stanford University.
• JB Jose Maria Barrero is assistant professor of finance at Instituto Tecnológico Autónomo de México.
• SD Steven Davis is a senior fellow at the Hoover Institution.
• BM Brent Meyer is an assistant vice president and economist in the research department at the Federal Reserve Bank of Atlanta.
• EM Emil Mihaylov is a Senior Economic Research Analyst at the Federal Reserve Bank of Atlanta.

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Gartner: Spending on social and collaboration software booms as remote work takes hold

The research firm confirmed that companies have been rushing to spend money on tools needed to keep their employees connected and productive..

Spending on social and collaborative applications will likely see double-digit growth this year, according to a Gartner forecast , as businesses focus on keeping remote workers connected during the pandemic and beyond.

While videoconferencing tools such as Zoom, Microsoft Teams, and Cisco Webex were the big winners of the global shift to remote working during 2020, there has also been an uptick in interest in other types of platforms that connect workers and facilitate ad-hoc communications and “watercooler”-style interactions.

Revenues in three software market segments – collaborative work management, enterprise social networks. and employee communication software – are set to reach almost $4.5 billion in 2021, a 17% increase from $3.8 billion in 2020, according to Gartner’s “Forecast Analysis: Social and Collaboration Software in the Workplace, Worldwide.”  

The five-year revenue forecast predicts that revenues will increase by double-digit percentages each year to $6.9 billion in 2024; the research firm increased its long-term revenue growth forecast in comparison to its 2019 expectations due to the global shift toward remote work. Other drivers behind the increase include a rise in the number of knowledge workers globally, according to Gartner.

“The need to suddenly empty out all the office buildings, while keeping businesses afloat, gave a jolt to many markets, with social and collaboration being one of those at the forefront,” said Craig Roth, research vice president at Gartner and one of the report’s authors. “Social and collaboration products went from ‘nice to have’ to ‘must have’ within a period of a few weeks.”

Of the three areas covered in the report, collaborative work management tools – including the likes of Asana , Trello and Monday – were the biggest driver of revenue growth, as businesses sought to digitize “non-routine” task management and coordination processes that would otherwise require back-and-forth emails. “Tracking and coordination of work outside of formal project plans became a lot more difficult when you couldn’t just ask for status over a cube wall. These tools, which were on an upswing anyway, got an extra boost [during the pandemic],” said Roth.

The report also forecasts that collaborative and social functionality will increasingly be embedded into CRM, HR and ERP business applications. Gartner predicts that 65% of enterprise application software provides will include collaboration features in their products by 2025.

That trend is well under way. Microsoft recently announced that its Teams collaboration tool will be made accessible in elements of its Dynamics 365 portfolio , for example, while Salesforce’s pending acquisition of team chat pioneer Slack is likely to bring tight integration across its suite of business apps.

The advantage of embedding social and collaboration functionality is the ability to include non-formalized processes, such as conversations or content sharing, in more process-oriented business tools.  

“Going forward, we’ll start seeing [collaboration] products integrated more into packaged business applications, as opposed to being a siloed product on the side that, every now and then, you exit your business application to do some collaboration, and then go back to ‘work,’” said Roth. “It shouldn’t feel that way.”

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Matthew Finnegan covers Microsoft, collaboration and productivity software, AR/VR, and other enterprise IT topics. He joined IDG in January 2013 and is based in Sweden.

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What employees are saying about the future of remote work

As organizations look to the postpandemic future, many are planning a hybrid virtual model  that combines remote work with time in the office. This sensible decision follows solid productivity increases  during the pandemic.

But while productivity may have gone up, many employees report feeling anxious and burned out. Unless leaders address the sources of employee anxiety, pandemic-style productivity gains may prove unsustainable in the future. 1 Besides anxiety and burnout, longer-term productivity in a hybrid virtual model will also require addressing the organizational norms that help create a common culture, generate social cohesion, and build shared trust. See Andrea Alexander, Aaron De Smet, and Mihir Mysore, “ Reimagining the postpandemic workforce ,” McKinsey Quarterly , July 7, 2020. That’s because anxiety is known to reduce job satisfaction, negatively affect interpersonal relationships with colleagues, and decrease work performance.

A McKinsey Live event on ‘Getting hybrid work right: What employees are saying’

As organizational leaders chart the path toward the postpandemic world, they need to communicate more frequently with their employees—even if their plans have yet to solidify fully. Organizations that have articulated more specific policies and approaches for the future workplace have seen employee well-being and productivity rise.

The following charts examine our survey findings and shed light on what employees want from the future of work.

Feeling included. Even high-level communication about post-COVID-19 working arrangements boosts employee well-being and productivity. But organizations that convey more detailed, remote-relevant policies and approaches see greater increases. Employees who feel included in more detailed communication are nearly five times more likely to report increased productivity. Because communicating about the future can drive performance outcomes today, leaders should consider increasing the frequency of their employee updates—both to share what’s already decided and to communicate what is still uncertain.

Communication breakdown. Valuable as a detailed vision for postpandemic work might be to employees, 40 percent of them say they’ve yet to hear about any vision from their organizations, and another 28 percent say that what they’ve heard remains vague.

Anxiety at work. At organizations that are communicating vaguely, or not at all, about the future of postpandemic work, nearly half of employees say it’s causing them concern or anxiety. Anxiety is known to decrease work performance, reduce job satisfaction, and negatively affect interpersonal relationships with colleagues, among other ills. For the global economy, the loss of productivity because of poor mental health—including anxiety—might be as high as $1 trillion per year .

Burning out. The lack of clear communication about the future of postpandemic work also contributes to employee burnout. Nearly half of employees surveyed say they’re feeling some symptoms of being burned out at work. That may be an underestimate, since employees experiencing burnout are less likely to respond to survey requests, and the most burned-out individuals may have already left the workforce—as have many women, who’ve been disproportionately affected  by the COVID-19 crisis.

Share more. Burnout is especially pronounced for people feeling anxious due to a lack of organizational communication. These employees were almost three times more likely to report feeling burned out. The obvious recommendation for organizational leaders: share more with employees, even if you’re uncertain about the future, to help improve employee well-being now.

Employees want flexibility. So how do organizations help their anxious and burned-out employees? One way is to find out what employees want for the future. More than half of employees told us they would like their organizations to adopt more flexible hybrid virtual-working models , in which employees are sometimes on-premises and sometimes working remotely. A hybrid model can help organizations make the most of talent wherever it resides, lower costs, and strengthen organizational performance .

Talent at risk. In fact, more than a quarter of those surveyed reported that they would consider switching employers if their organization returned to fully on-site work. Of course, even employees who say they might depart could ultimately decide to remain, depending on the policies companies end up adopting, the availability of jobs at the same or better rates of pay, and the role of automation in shifting the tasks people do .

Staying home. In describing the hybrid model of the future, more than half of government and corporate workers report that they would like to work from home at least three days a week once the pandemic is over. Across geographies, US employees are the most interested in having access to remote work, with nearly a third saying they would like to work remotely full time.

What parents say. Employees with young children are the most likely to prefer flexible work locations, with only 8 percent suggesting they would like to see a fully on-site model in the future. Employees without children under 18 are nearly three times as likely to prefer on-site work, but the majority still prefer more flexible models.

Hopes and fears. Across the board, employees are eager to see organizations put a greater emphasis on flexibility, competitive compensation, and well-being once the pandemic is over—and conversely, they’re concerned that future work, regardless of whether it is on-site or remote, will negatively affect these needs. Employees also fear that on-site work will lead to a greater chance of getting sick and that remote work will reduce community and collaboration between colleagues.

Policy matters. Which working arrangements and related policies do employees say will lead to the highest levels of well-being, social cohesion, and productivity? More than a third of respondents ranked clear hours and expectations for collaboration in their top five policies; several other collaboration policies, including technologies that enable on-site employees to dial-in to remote meetings and guidelines for documentation, also received significant support. Collaboration tools, and training for those tools, also rate highly for employees, as does reimbursement for remote-work office setups. Microconnectivity policies, meanwhile—from small team events to a listening and response strategy—were top policies for more than a quarter of all respondents.

Andrea Alexander is an associate partner in McKinsey’s Houston office. Aaron De Smet is a senior partner in the New Jersey office. Meredith Langstaff is an associate partner in the Washington, DC, office, where Dan Ravid is a fellow, research and knowledge.

This article was edited by Lang Davison, an executive editor in the Seattle office.

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Gartner: IT budgets shift to mature processes around remote business

The pandemic forced businesses to work remotely. now, almost a year on, cios must consider the it to run long-term remote business strategies.

• Cliff Saran, Managing Editor

IT budgets that were not spent last year are set to drive a rebound in spending in 2021, as CIOs restart digital initiatives put on hold during the pandemic.

Worldwide IT spending is projected to total $3.9tn in 2021, an increase of 6.2% from 2020, according to the latest forecast by Gartner. Worldwide IT spending declined by 3.2% in 2020 as CIOs prioritised spending on technology and services that were deemed “mission-critical” during the first stages of the pandemic.

Spending on devices plummeted by 8.2% in 2020, but is forecast to bounce back by 8% this year. “Device spending is not going away,” said John-David Lovelock, distinguished research vice-president at Gartner. “The dollars spent this year were committed to be spent last year.” The devices segment is projected to reach $705.4bn in IT spending. 

Lovelock said that at the start of the first lockdown, businesses bought ultra-high-end thin and light notebook computers, such as Microsoft Surface and Apple MacBook Air devices, to enable key members of staff to be able to work at home more easily.

But as the pandemic has dragged on, employers have needed to support greater numbers of home workers. This has led to purchases of computer monitors, keyboards and comfy chairs for the home market. “There is now the shift in device spending,” said Lovelock. “It is not just about enabling work tasks at home, but being able to do more of the day-to-day work from home.”

This is the concept of the “everywhere employee”, which recognises the fact that staff like the flexibility of choosing where they work.

“Employees like working from home some of the time,” said Lovelock. “We are halfway through Covid-19. It will be with us for the majority of 2021.”

According to Gartner, the unprecedented speed of digital transformation in 2020 to satisfy remote working, education and new social norms presented lockdowns and social distancing measures as double-edged swords – which has reduced the pandemic’s negative effect on IT spending going into the new year. 

Measures that were put in place earlier in the pandemic to help people collaborate while working from home are now being updated. Lovelock added: “Remote working technology to support workers saw immediate growth in April to June 2020. Now, longer term, we are seeing more industrial processes, such as cloud unified communications.”

If 2021 is to pave the way to new approaches to office work, CIOs will need to assess how to deliver a safe, fulling operational desktop IT environment for people who may not be going into the office regularly. Lovelock believes CIOs will be looking at device management and desktop as a service, which grew by 100% in 2020.

“There are a combination of factors pushing the devices market higher,” he said. “As countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, organisations are industrialising remote work for employees as quarantine measures keep them at home and budget stabilisation allows CIOs to reinvest in assets that were sweated in 2020.”

Read more about remote working

• Nearly a third of European workers at mid-sized organisations feel disengaged and unmotivated due to issues with technology while working remotely .
• Study finds distributed working practices – office, home, on the move or hybrid – have proven business and employee engagement benefits, but leadership and business culture need updating.

Lovelock said CIOs should not only consider how to support people doing work tasks at home, adding: “Now it’s about making people productive at home.”

For Lovelock, this will drive technology adoption in areas such as content collaboration platforms, secure connectivity and much broader scope for unified communications to encompass voice, email, chat, conference rooms, meetings and content collaboration.

Through to 2024, businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-Covid-19 world that will involve permanently higher adoption of remote work and digital touchpoints. Gartner forecasts that global IT spending related to remote working will total $332.9bn in 2021, an increase of 4.9% from 2020. 

According to Lovelock, companies that had digital business initiatives in place in 2020 were more successful than those that had not completed digitisation.

“Digital business represents the dominant technology trend in late 2020 and early 2021, with areas such as cloud computing, core business applications, security and customer experience at the forefront,” he said. “Optimisation initiatives, such as hyper-automation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks.”

In many ways, the pandemic has been a catalyst for aligning the business with IT. “Covid-19 has brought forward the future, which is digital business,” said Lovelock.

Lockdowns forced business leaders to rethink how to engage with their customers and employees when face-to-face contact is not possible, he said. “ Greater levels of digitisation of internal processes , supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed, not necessarily how much IT is financed.”

Lovelock said Covid-19 had forced business leaders to divert funds from other departments into IT. For example, the need to provide remote working meant that IT received money that had previously been budgeted to building maintenance, which is a significant U-turn in business leaders’ attitude towards IT spending.

“CIOs are getting money from other budgets,” he said. “IT shifts from an expense to a percentage of the cost of goods sold.” In other words, IT is linked directly to the revenue generated by the business.

This also means that the CIO’s role is confirmed as a strategic board adviser, said Lovelock. “CIOs have a balancing act to perform in 2021 – saving cash and expanding IT,” he added. “With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels.”

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Your Next Career Coach Could Be A Chatbot

Coaching programs that rely on artificial intelligence are cheap, accessible and increasingly popular for practicing tough workplace conversations or getting tips for negotiating a raise. but privacy questions and skepticism over the quality of non-human answers could slow adoption., by maria gracia santillana linares , forbes staff.

Y ou’ve trusted artificial intelligence to plan a vacation itinerary, write a cover letter for a new job and even flirt on your behalf with your next date . But would you trust it with career advice?

A growing number of businesses are betting you will. Coaching or workforce learning platforms like BetterUp, Multiverse and LinkedIn—as well as startups like Valence and Wisq—are only some of the AI-powered coaching chatbots entering the market.

During a time of layoffs and budget cuts, as companies seek to help workers hone their interpersonal skills, AI is emerging, ironically, as a cheaper and more accessible alternative to traditionally high-cost human coaching.

AI coaching refers broadly to a variety of apps and programs that are powered by generative AI technology and provide advice about tricky situations or career challenges. Users query a chatbot and get real-time, interactive feedback on everything from the best way to negotiate a raise to how to search for a new job to how to delegate work or give feedback to teammates.

This is still a relatively niche business—Gartner’s HR practice tells Forbes it is still too small of a market to measure—but both employers and workers are starting to embrace it. Its emergence comes at a time when more people and companies are seeking help with career development, and understandably so. In an economy where fewer people are quitting or changing jobs, workers are nervous about promotion opportunities. Meanwhile, many also feel frustrated by a lack of hands-on management training during the pandemic or concerned about how AI is already reshaping job descriptions and making some of their skills obsolete.

Some 47% of companies surveyed by LinkedIn for its 2024 Workforce Report said they are investing in career mentoring and coaching for their workforce, and a survey by Gartner found that 42% of employees would be comfortable asking an AI coach about the next steps in their career. Another survey by INTOO , a career and outplacement firm, found that nearly half of respondents aged 21 to 26 think they get better advice from AI, including ChatGPT, than from their managers.

So it’s no surprise that startups are attracting investments and companies are rolling out new products. For example, in June, Menlo Park, Cal.-based Rising Team closed an $8 million seed round that it’s using in part to add an AI leadership coach, aRTi , to its team performance platform. Management AI coaching tool Wisq, which has raised over $40 million in funding since May 2021, launched a new program aimed at mid-level managers in April.

“Employers are all over it,” says Ujjwal Singh, chief technology and product officer at London-based apprenticeship startup Multiverse, adding that 64% of its customers now use its AI career coach. That’s up 15% from last quarter. “They’re really pushing this hard.”

Yet even as demand rises, AI career coaching faces hurdles to widespread adoption, including concerns some workers may have about the privacy of employer-provided sessions and questions about the quality of tools’ responses. More customized responses rely on personal information users may be hesitant to give—and on the real-life experiences that human coaches can draw upon when counseling clients.

Some early research suggests that in some scenarios, AI coaching can be as effective as the human version. For example, a study published in the journal PLOS found that research groups using human coaches and those using AI coaches were just as efficient when it came to reaching set goals.

But at this point, skepticism is still warranted. “We're a long way from a typical human being wanting [coaching] from a machine,” says Joseph Fuller, a Harvard Business School professor who co-leads its Managing the Future of Work initiative. But, he adds, given the rapid improvements in AI, “it’s pretty dumb to bet against them.”

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T his much is for sure: AI coaching is a lot cheaper for employers than the human variety, which, with an average cost of $244 an hour, has typically been provided only to companies’ top performers or senior executives. (For comparison, Wisq charges between $50 and $150 per user per year for a combination of human and AI coaching.) It's also designed to be accessible, with several AI coaches integrated directly into apps most workers use daily, such as Slack or Microsoft Teams .

In 2023, the American market for coaching was worth $14.2 billion, according to market research firm IBISWorld. During the pandemic, Zoom enabled coaches to take on remote clients, expanding their client base further, points out Carlos Cuadrado Ortiz, an associate principal and coach at consulting firm Korn Ferry.

AI could be a big accelerator for the industry, enabling companies to provide coaching to more employees and human coaches to serve more clients by using AI tools to address the simplest questions. That explains why some big career businesses are adding AI features or acquiring smaller startups. LinkedIn, for instance, launched an AI virtual coach in October that helps users find new jobs personalized to their profile. The AI coach’s answers pull from large language models that are trained on advice provided by a handful of human coaches who earn royalty fees.

In March, BetterUp, a coaching and mental health platform that has reached unicorn status (it was last valued at $4.7 billion in 2021 according to Pitchbook), acquired Practica, an early AI coaching provider, to grow its own AI offerings. (The company still offers human coaching to all users.) The new AI services include a “role play” function that lets users practice conversations with a voice-prompted chatbot about thorny topics, such as asking for a raise or sharing critical feedback. The AI might tell a user, for example, that they sounded defensive when delivering bad news or too nervous when making a case for a promotion.

Meanwhile, startups like Toronto-based Valence and Paris-based Coachello added AI chatbots to their online coaching services last year. Grettel Seiger, a leadership development manager based in Basel, Switzerland, started trying out Coachello with a small group of employees a month ago and says it’s been a way for colleagues to get help earlier in their careers without the high cost.

Those who’ve started using it have opened up about the dilemmas they face, she adds, noting “you don’t feel judged” like you might with some managers. Asking the AI chatbot follow-up questions has also helped her define exactly what help she needs. “The whole process became cathartic,’’ she says.

B ut good coaching, and good advice, is rarely about quick answers; it relies on probing questions—or in AI speak, collecting more data. “Coaching is about guiding someone in a certain direction, [or] nudging people,” says Multiverse’s Singh. “I don’t think AI is quite there yet” when it comes to complex, relationship-focused questions, he adds.

At a broad level, some AI tools have been known to make up answers or at times give wrong information . Massara Almafrachi, a third-year law student at Western New England Law School, says that asking an AI chatbot for career advice has resulted in confusing and irrelevant answers. “I’m already confused about my career,” she says. “AI [only] throws me in a bigger loop.”

Katie Kirsch, the founder of a coaching company called Lume and a 2024 Forbes Under 30 listmaker , says she may one day incorporate AI features into her platform. But earlier this year she tried out AI tools herself and found the advice lacked nuance: "The kinds of conversations [my human coach and I] had felt impossible to replace in the AI format."

AI chatbots, after all, are only as powerful as the quantity and quality of the data they have been fed, and how well the tools are built. To provide a personalized approach, AI coaching companies must successfully coax users to divulge specific, personal information, says Harvard’s Fuller. “You end up having this chicken-or-the-egg problem of not having access to a lot of data until you’ve got the quality that you can only get by having a lot of data,” he says.

Then, there’s the question of sensitive information. Most AI coaching companies offer their services directly through employers, which could make users leery of asking what they really want to know. How many employees who want advice on leaving a job or dealing with a toxic boss would feel comfortable entering those questions into a chatbot offered by their employer?

AI coaching providers respond that confidentiality agreements prevent the tools from sharing personal details with employers, and any reports generated for employers show only aggregate and anonymized results. (Some, such as BetterUp, also say users can opt out of having their data train language learning models, while others, such as Valence, say it does not use employee conversations with its chatbot to train its models.)

Meanwhile, “workers are generally aware that a company-provided tool is tailored to enhance the company’s goals, which don’t always align with theirs,” says Hatim Rahman, management professor at the Kellogg School of Management at Northwestern University, who studies AI’s impact on employment.

Despite potential privacy fears and the fact that AI coaching models still have a lot to learn, tech-savvy workers are increasingly embracing them. “There is no judgment built directly into the tool,” says Michael Woodward, director of New York University’s Coaching Innovation Lab. “It’s purely mathematical.”

In addition to Gen Z workers, another unexpected demographic has become an unlikely power user of AI coaching: Middle-aged men. Multiverse reports it is seeing the most growth among people aged 40 and up; as of June, 46% of eligible employees older than 40 used Atlas, its AI-powered coaching service, compared to only 31% of users 24 and under.

Men in their 40s are one of the largest groups using BetterUp’s AI coaching feature, too. “These are [groups] where coaching may still be stigmatized,” says Moritz Sudhof, vice-president of AI at BetterUp. But if given the chance to share their career dilemmas with a chatbot, they’re actually “ready to open up and bare their weaknesses and problems.”

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