How is AI changing the way employees work, and what does it mean for well-being?

Research suggests that around 29% of UK businesses use some form of artificial intelligence (AI), with a further 15% planning to introduce AI systems. Implementation varied throughout the country, with the highest rates found in London.

The most common uses of artificial intelligence were text generation and visual content creation using generative AI, analytics and reporting, and customer support functions such as chatbots that respond to messages or AI systems that answer the telephone. Most businesses reported including some human judgment and oversight when checking the work carried out by AI systems.

As you can see, these functions can replace some repetitive tasks and lead to job displacement, but there are other consequences of AI adoption as well. Let's look at how the use of AI systems can impact employee well-being.

Introducing AI tools will impact the employee experience and have knock-on effects for well-being and mental health. Implementing AI tools changes the way we work and could be perceived negatively. However, there's also potential to free employees from mundane, repetitive tasks, enabling them to focus on more creative work and spend more time on decision-making rather than analytical tasks. As with most new technology, the impact of AI depends on how you use it.

Here are some potential advantages and disadvantages of introducing AI systems in your workplace and how they impact employee well-being.

Job losses

When businesses adopt AI, job displacement is a primary concern for employees. The idea that AI-driven platforms could replace their jobs has significant implications for well-being. The data suggests that only 4% of businesses that have already implemented AI have seen reduced employee numbers, while 5% of those planning to introduce AI expect to reduce their employee headcount. However, any perceived lack of job security can cause stress and other mental health concerns.

Financial stress may already be a concern for employees due to the cost-of-living crisis, meaning the threat of redundancy could further increase it. The symptoms can include anxiety, depression, insomnia and difficulty concentrating, which can all impact their performance and create a vicious cycle.

Efficiency and productivity improvements

On a more positive note, AI tools can replace repetitive work tasks, allowing employees to focus on more meaningful work and increasing job satisfaction. AI can therefore increase efficiency and productivity while maintaining employee morale. This has clear benefits for employees' mental well-being, provided their role involves creative work and human decision-making.

AI's analytical functions also reduce the time your team spends on data analysis by quickly categorising and summarising large volumes of data. You can then make vital business decisions based on accurate data. If used well, this can reduce the likelihood of unfair outcomes, as managers can make decisions based on accurate data analysis and insights rather than on their gut feelings about staff performance and productivity. It gives managers more confidence, knowing that the potential for human error in data analysis is reduced and that they can use human judgment in their decision-making.

Personalised career development

A clear career development path is good for employee engagement and retention, as it helps staff envision a future with your business. It can also increase job satisfaction and give work a sense of purpose. Investing in staff development shows your team that introducing AI doesn't necessarily mean job losses and reduces anxiety.

AI can help you engage with your team to analyse their current knowledge and skill levels and gather employee feedback on their career aspirations. It can also suggest training and other support options to help them achieve their goals and improve your business outcomes.

Employees increasingly want to work with employers whose values match their own. Personalised learning and career development show that you value each employee's individual preferences and skills. While AI can provide an interactive training platform and gather real-time feedback, the human touch is still vital.

Work-life balance

Supporting staff to create a positive work-life balance recognises the importance of employees' lives outside work and the need to switch off. While workplace stress can significantly impact employee well-being, challenges employees face in their personal lives also contribute to their overall stress levels. When left unaddressed, stress can become chronic and lead to burnout.

AI adoption provides your team with tools to reduce mundane tasks and insights to manage their time, so they can focus on high-priority tasks that require human oversight. This can contribute to a positive workplace culture where leaving work on time becomes normalised.

Support in customer-facing roles

Working in a customer-facing role can be stressful for various reasons. Some roles can become repetitive when staff spend time responding to the same queries throughout their working day. High call or message volumes can be overwhelming and reduce customer satisfaction, as customers become frustrated by long wait times for a response. Ultimately, your staff may have to deal with an angry caller, even though the caller's query was relatively straightforward.

Using AI chatbots and virtual telephone assistants lets you respond to routine questions quickly and connect people who need further assistance to a member of staff. It improves your customer service and ensures your staff deal only with calls that require emotional intelligence or a more personal approach, making the work itself more fulfilling.

Reduced human contact

We've already mentioned the potential benefits for customer service, but there is a downside. AI adoption can generally reduce human contact, which can negatively impact employee well-being. Say your workforce includes many remote workers. In that case, they'll likely spend many hours working alone without any human interaction. Strong social bonds are vital to support employees' mental well-being and can improve employee engagement and performance.

If an employee is struggling, either because they're worried about the impact of AI on their job or for any other reason, their human managers and colleagues are best placed to recognise the signs. Retaining the human touch here is essential, as it provides connection and understanding in ways AI can't.

Privacy concerns

AI adoption raises questions about data security and privacy. If you're using AI to store and analyse employees' personal information, it can raise concerns that information they've shared with you in confidence could become public. This could include financial data or their medical history. A robust policy on the use of AI for data analysis, along with appropriate security measures, is essential.

Ensuring that staff understand the safeguards is equally important to having them in place. Even a perceived lack of privacy can have effects similar to those of a data breach, underscoring that a clear communication strategy can create psychological safety and well-being. Privacy concerns can lead to stress, anxiety and depression that can all be extremely debilitating.

Pressure to upskill

Your employees may feel the pressure to upskill from different sources. Firstly, using AI effectively means staff must learn new skills to operate AI platforms and other technologies. Employees with high levels of technical literacy may adapt easily, while others struggle. As we've mentioned, AI can help to identify skills gaps and create personalised training. However, including a human element in the training process, such as manager check-ins or in-person training sessions, ensures that staff understand what they're learning.

More generally, employees may worry that AI could replace their roles. This creates pressure to upskill to move to a different team or gain promotion to a more senior role that's less easily replaced. Ensuring employees feel supported in progressing their careers in ways that are meaningful to them and that they understand the potential impact of AI on their current role helps reduce anxiety.

We've discussed some of the potential benefits and downsides of using AI in your business and how they can impact employees' well-being. Now let's consider how you can create effective policies and design an employee benefits package that supports well-being in light of these factors.

AI can support employee well-being when used effectively. However, you should also be mindful of potential disadvantages and consider which employee benefits will provide the right level of support.

Health insurance

Employee health insurance is a highly valued employee benefit that provides quick access to private medical treatment. You can invest in a group policy that covers all team members, enabling them to access treatment and other health services as needed. We've mentioned the potential impact of AI on employees' mental health. Core policy coverage provides 8-10 counselling sessions as standard, plus most offer access to meditation and mindfulness apps via their member reward programmes. However, it's worth considering paying an additional premium to extend your coverage to include more talking therapy sessions and in-patient or out-patient psychiatric treatment.

An employee assistance programme offers additional counselling sessions plus access to telephone helplines with guidance on financial or legal worries. These can provide vital support for staff experiencing financial stress.

Finally, business health insurance usually includes employee health assessments that provide anonymised data to help identify workplace health trends. This can help you identify any issues that arise following AI implementation and introduce initiatives to provide tailored support.

Financial support

Providing your team with financial support helps to ease financial stress and demonstrates your commitment to their financial security. This is particularly helpful if they have concerns about AI's impact, as it demonstrates an investment in their financial future.

Death in service benefits pay a lump sum if an employee dies during their employment, providing their loved ones with a financial safety net. You can also invest in critical illness cover that pays a lump sum if they're diagnosed with a serious illness, and income protection insurance that covers a percentage of their usual salary if they're absent due to illness or injury. Enhanced pension benefits, such as pension contribution matching, help to boost their retirement fund.

It's also worth considering introducing bonuses or an employee profit-sharing scheme so that staff benefit directly from business gains. This could also increase their awareness of AI's benefits, including greater efficiency and profitability.

Employee discounts

Employee discount schemes let your staff save money on the things they normally buy, or on treats such as dining out, holidays and spa days. Most insurance providers have a member reward scheme for their health and life insurance customers, with a range of free perks and discounted products and services from their corporate partners. Some provide the same discounts to all members, while others offer enhanced rewards for healthy living.

You can also invest in a standalone scheme from an independent provider. Either approach helps relieve financial concerns and can enhance their access to support services.

Flexible working arrangements

Flexible working arrangements let your staff tailor their working hours and location to their circumstances. For example, starting the working day earlier or later can help employees avoid a busy, stressful commute or let parents start work after the school run.

Working from home could also allow workers to focus without office distractions or reduce their commute costs.

Offering flexible working arrangements helps you support employees in creating a positive work-life balance and shows you're committed to their long-term health.

Annual leave

There's a statutory requirement to provide all staff with 5.6 weeks of annual leave. You can set a higher allowance for all staff, increase the annual leave allowance based on long service, or combine the two. Increasing the annual leave allowance at regular intervals shows that you're still investing in people in the long term, which could help alleviate concerns about job losses.

Personalised career development

We've already mentioned AI's ability to analyse skills gaps and create a personalised training plan that also factors in employees' career goals. Tailored training shows your staff you're willing to invest in their professional development and long-term employment with your company.

While AI can create training, consider taking a hybrid approach. AI is useful as an analytical tool, but a human manager, training professional or your HR teams can employ human empathy to understand different learning styles and make recommendations based on individual preferences and needs. Non-AI approaches could include coaching and mentoring schemes that provide a sounding board. Where necessary, training could provide redeployment support if a staff member needs to be redeployed due to AI use.

Workplace and community initiatives

Workplace wellness initiatives can support staff to improve their health in various ways. If you have health insurance, you can use the data from health assessments to identify trends and areas for improvement. For example, if your health insurance reward programme provides access to a mindfulness or meditation app, you can incentivise usage and run training sessions on the benefits of mindfulness. You could also use an initiative of this kind to introduce mental health first aiders, who are trained to identify concerns and provide support. An initiative could encourage staff members to train or introduce their services after training.

Community initiatives, such as team events or charity volunteering days, help staff build positive relationships with their colleagues.

A clear privacy policy

Your privacy policy sets boundaries for AI use and helps you determine which safeguards to implement to protect confidential information. When developing the policy, gathering staff feedback helps you understand their concerns and identify measures you might not otherwise have considered. Consulting staff increases trust that you're taking their concerns seriously and including them in the decision-making process.

Staff forums, surveys and individual discussions can all help you gather information. When you've finalised the policy, ensure you communicate the details to your team via multiple platforms. An in-person meeting that allows staff to ask questions is key. However, also ensure it's available on a central platform, such as your intranet, and summarise the details in an email so employees can review them and ask questions later if necessary.

An effective employee benefits package can help your business harness the benefits of AI while supporting employee well-being. Contact us for tailored advice to help you choose the right insurance policies to support high-quality employee benefits.