Career counseling leader, Keletzo Chilone and Mpho Maponya, head of business development at Mercer Africa.
South African organizations are grappling with a rapidly growing “talent paradox” artificial intelligence (Aye) Adoption faces deep skills shortages.
This is according to Mercer's 2026 Global Talent Trends reportWhich draws on insights from approximately 12,000 executives, HR leaders, investors and employees from around the world, including SA. The research was conducted between September and October 2025.
The findings were broken down according to the geographic region of the respondents.
The report paints a picture of SA's workforce being at a turning point. While businesses are accelerating AI integration to increase productivity, a lack of skills and trust threatens to harm long-term growth.
Report identifies talent shortage (52%) digital Acceleration as one of the leading forces shaping workforce strategies in SA (50%). Yet, the human impact of this change is becoming evident, with only 41% of employees reporting that they are “thriving” in their roles, below the global average of 44%.
“The data shows that South Africa is heading towards a complex talent paradox,” says Keletzo Chiloane, career consulting leader at Mercer Africa.
“While 68% of local authorities expect a high return on investment from AI-powered work redesign this year, the success of these initiatives is entirely dependent on the human element.”
Chiloen says organizations need to rethink their approach to AI. “To unlock exponential growth, businesses must move beyond viewing AI simply as a tool for automation and instead use it as a catalyst for more sustainable, human-machine teaming models.”
A report released this week by PNET is revealedWith AI literacy rapidly emerging as a key skill in SA's labor market, companies are increasingly looking for candidates who can apply AI tools not only in technical environments, but also in everyday tasks.
The PNET report shows that organizations are increasingly competing for candidates who can demonstrate not only technical AI engineering experience but also practical AI application skills.
A central theme emerging from Mercer's findings is the urgency of reskilling. While 78% of employees trust their organizations to equip them with new skills as AI reshapes jobs, more than half (53%) fear that their existing capabilities may soon become obsolete.
This concern is driving a shift in employee priorities, with 65% indicating they would exchange a 10% pay rise for opportunities to build AI and digital skills.
“We are seeing a profound change in the employee-employer agreement,” says Mpho Maponya. Head of Business Development: Mercer Africa. “South African talent is incredibly dynamic; they are willing to make financial compromises for career longevity.”
Maponya says leadership must now focus on execution rather than intention. “The challenge is no longer simply to identify the status quo, but to execute a skills-based strategy that addresses the ‘fear of obsolescence’ while building a culture of continuous learning.”
Despite the productivity gains associated with AI – 83% of employees have reported improved efficiency when using these tools – the report highlights a growing “trust gap”.
It said nearly three-quarters (74%) of employees are concerned about the use of AI for surveillance in the workplace.
This disconnect extends to broader workplace dynamics. While 88% of executives believe their organizations foster trust, only 68% of employees agree that trust exists among coworkers.
Compensation pressures also remain a major driver of workforce movement. Of employees considering leaving their jobs, 50% cite higher pay elsewhere as the primary motivator, followed by limited flexible working options (41%). However, non-monetary benefits are gaining prominence, with 64% willing to trade part of their salary for better medical cover.
The report ultimately calls for a new leadership blueprint, focused on human-centred capabilities. South African employees ranked communication (71%) and empathy (67%) as the most important leadership qualities in dealing with the ongoing disruption.
“To compete globally, South African businesses must close the digital agility gap, while ensuring that empathy and economics remain in balance,” Chiloane comments.
“Success in 2026 requires leaders who can manage these contradictions – focusing on performance and technology without losing the well-being and trust of the workforce.”