Morale, Not Metrics, Will Decide Who Wins the AI Revolution

Companies worldwide face a serious problem. According to Gallup, employee engagement fell this year to just 20% globally. The lowest in a decade. This is due to a multitude of factors, many out of an employer’s control. But one significant factor is the rise of AI. 49% of employees report feeling exhausted by the pace of change, with a further 33% worrying about their jobs being replaced.

Employee disengagement poses serious risks to businesses, costing the world economy US$438 billion in lost productivity in 2024 (Gallup). It makes it more difficult for businesses to be agile in the face of change, to innovate, and to work cohesively toward a common goal. All things that are vital for adoption.

For companies looking to win with AI, morale will be the most important metric for success.

The morale problem in the post-AI era

Rapid AI adoption within an organization can be a double-edged sword. On the one hand, AI can boost efficiency, innovation, and productivity. On the other hand, if implemented thoughtlessly, it can also lead to low morale, quietly undoing those gains.

Of course, not all of the blame can be placed on AI. Employees are also dealing with economic uncertainty, hybrid fatigue, overwhelmed managers, and a cooling labour market.

What leaders need to know is the impact overall disengagement has on their AI efforts. Is low morale really such a problem? In Gallup’s survey, respondents were asked to report negative emotions they experienced the previous day. 40% reported feeling stress, 21% anger, 23% sadness, and 22% loneliness. Over a prolonged period of time, these sentiments make teams less adaptable, less collaborative, and more close-minded. None of these lend themselves to an effective AI strategy.

The importance of psychological safety

Enthusiasm and motivation are important, but psychological safety is also a key driver of innovation and transformation. When we ask our team members to embrace change, we’re asking them to do more than invest their time in learning new tools. We’re asking them to challenge ideas, ask “stupid” questions, and make mistakes. This is impossible without first building a culture of psychological safety.

This has been an important topic in HR for many years now, but AI innovation may require a few specific tweaks. Team members should feel free to admit to skepticism or ethical concerns without being labelled ‘anti-progress.’ This helps to identify blind spots and ensure responsible deployment whilst also building trust across teams.

It also allows team members to admit to knowledge gaps, something increasingly important as AI becomes a standard in the modern workplace. This openness is key to continuous learning and will help you to design more effective L&D strategies.

The Deel perspective: How high morale leads to wins with AI

At Deel, the strides we’ve made bringing AI to our teams and our partners are due in large part to the attitude and enthusiasm of our team members. In my experience, teams with high morale:

1. Embrace AI workflows and tools with little resistance. Our teams trust that anything we build is designed to augment them, not replace them. This means they join any conversation around new AI processes with an open mind.
2. Raise blockers early. Because we create an environment of psychological safety, team members are comfortable flagging issues and raising concerns.
3. Adapt more quickly and easily to change. Without high morale, change quickly becomes exhausting. But change is also part and parcel of building a fast-growing company. We meet our teams in the middle with proper change management, but high morale allows our teams to react to change with minimal stress and a can-do attitude.
4. Experiment and share ideas. Morale sparks curiosity. Our teams take the AI tools we give them and discover new ways to leverage them, or come up with ideas for improvements.
5. Constantly aim to improve. They spot inefficiencies before they become a blocker, and find creative solutions to problems. Rather than underutilising AI tools because they don’t work perfectly, they actively collaborate with tech and product teams to build internal tools that meet everyone’s needs.

A practical guide to boosting morale

Morale is a tricky thing to boost once lost, and there’s not usually a catch-all solution. But here are some key pitfalls that can lead to lower morale, especially where AI adoption is concerned, and how we avoid them at Deel:

• Moving too fast for feedback: The best AI tools are built with teams to augment their work and give them workflows that actually make sense. It can be tempting to move fast and launch something new and exciting as quickly as possible. But that can be a recipe for uncertainty and anxiety.

  • At Deel, we move fast. But we also factor in time to gather insights from teams before we build, and time to receive feedback and adapt during rollout. This helps us keep building with a human-first mentality.

• AI for the sake of it: It’s easy to get caught up in hype and start seeing ways to implement AI in everything. But that just leads to wasted time and resources, causing frustration among teams.

  • Focus is everything. And while we’re building [revolutionary AI products[(https://www.deel.com/ai-workforce/), we also know that AI is a means to an end. Before we build anything, we make sure the project is tied to real business value, with outcomes that contribute to our current priorities. This keeps us focused on the mission and our shared goals.

• Knowledge gaps: AI literacy is increasingly a must-have for new hires. This can lead to a widening knowledge gap between teams if you don’t offer upskilling for employees who predate your AI implementation.

  • Within Deel Engage, our entire library of short courses is available to every Deel team member. We run frequent training sessions on our tools, processes, and products, which anyone is free to attend.

Morale as the next competitive advantage

What’s really going to help companies boost adoption and realize their AI ambitions isn’t another exciting automation. It’s the optimism, excitement, and curiosity that come with high morale. This means that organizations that build human-first cultures will retain top talent and ultimately outperform peers.