AI Is Changing the Bargain Between Employers and Employees

The employee gives their time, skills, judgment and effort.

The employer provides the employee compensation, benefits and some measure of security.

The company takes what all in the workplace produce, sells it to customers, pays its expenses, invests in its future and—hopefully—creates a return for its shareholders.

I wonder if Agentic AI is about to break it.

Because something fundamentally different happens when technology doesn’t merely make a factory, warehouse or computer system more productive.

It makes me more productive.

And perhaps dramatically so.

Consider a career professional who spends a considerable part of their work week gathering insight, preparing reports, summarizing meetings, analyzing data, drafting presentations, responding to routine correspondence, and moving work product through various processes.

Now give that person increasingly capable AI agents.

Some of those tasks that consumed hours may require mere minutes.

Some may disappear from the employee’s workload altogether.

Let’s not get hung up on whether the AI-fueled productivity improvement is 20 percent, 50 percent or 100 percent. It will vary enormously by job, industry and individual.

And that capacity has economic value.

Which raises a question I don’t think we’re discussing nearly enough:

If Agentic AI allows an employee to produce in 25 hours what previously required 40, does their employer automatically get another 15 hours of output?

Does the employee get some of that time back?

Do customers benefit through lower prices or better service?

Do shareholders receive the benefit through higher margins?

Or should the dividend somehow be shared among all of them?

History provides workplace talent plenty of reason to be skeptical.

For generations, technological improvements have allowed companies to make things faster, cheaper and with fewer people.

The benefits have been enormous. Consumers have gained access to products and services previous generations couldn’t have imagined. Companies have created extraordinary wealth. Entire industries have emerged.

And eventually we arrive at an absurd outcome:

Agentic AI becomes exponentially more capable, yet humans feel busier than ever.

I’ve written recently about what companies should do with the time Agentic AI creates.

And, I’ve argued that leaders should think about productive capacity rather than simply squeezing more human efficiency out of people.

But I think the issue goes deeper than that.

That’s a terrible way to build a trust based AI-enabled workplace.

Perhaps we need a different idea.

Call it the AI productivity dividend.

Shareholders should benefit. There’s nothing inherently wrong with that. Companies invest enormous sums in technology precisely because they expect a return.

Customers should benefit through better products, better service, greater innovation or perhaps lower costs.

The company should benefit through stronger competitiveness and profitability.

But employees should benefit, too.

It could mean more compensation.

But it could also mean more control over time.

A shorter workweek.

More flexibility.

More opportunity to learn.

Time to experiment with ideas that don’t have an immediate quarterly return.

Greater investment in professional development.

More human interaction with customers and colleagues.

More room for mentoring.

Or simply fewer hours spent doing things that nobody particularly enjoys doing.

That last one shouldn’t be dismissed. Removing some misery from work is an economic benefit, too.

This is where the discussion gets particularly interesting to me.

If two people can achieve the same high-quality outcome and one requires 40 hours while another, effectively using AI, requires 25, what exactly are we purchasing when we employ them?

Their time?

Or their contribution?

That distinction matters.

I want to be careful here.

The argument for Work Fit isn’t that everyone should work as little as possible.

Many people love working.

They want to build things.

Solve difficult problems.

Lead teams.

Start companies.

Serve customers.

Master their craft.

Earn more money.

Clearly, make a positive difference.

The question is whether work fits the life someone is trying to live.

And Agentic AI potentially gives us an extraordinary opportunity to improve that fit.

Imagine parents having more opportunities to be present in their kids’ lives.

Imagine an experienced professional having time to mentor younger colleagues rather than spending hours preparing presentation decks.

Imagine younger workers having time to develop judgment and expertise rather than racing from task to task.

Imagine someone in their 50s being able to remain highly productive while gradually reducing their hours instead of choosing between full-time work and retirement.

Imagine people using some of their AI-created capacity to think.

Truly, to think.

Not respond.

Not process.

Not produce another deck.

Think.

What might that be worth to an organization?

Corporate leadership and boards have an important role here.

They will understandably ask what AI investment does for their margins, revenue growth, productivity and shareholder value.

They should.

But I hope someone in those boardrooms asks another question:

That isn’t anti-business.

I think it’s very much a business question.

Imagine two competing employers.

Company A says:

“We’ve invested heavily in AI, and because you’re now more productive, we’re raising your targets by 35 percent.”

Company B says:

“We’ve invested heavily in AI. We expect stronger performance, but we also want some of the capacity we’ve created to come back to you—in flexibility, development, compensation and time.”

Which company attracts the better talent pool?

Which company earns more discretionary effort?

Which one creates greater trust?

Which one is more likely to get employees enthusiastically searching for the next thing they can automate?

I think you know.

There is nothing inevitable about how Agentic AI changes modern work and the workplace where it happens.

That’s important.

Technology doesn’t decide whether someone gets more autonomy.

Technology doesn’t decide whether the work week gets shorter.

Technology doesn’t decide whether productivity gains go entirely to shareholders.

Technology doesn’t decide whether employees become more engaged or more exhausted.

People make those decisions.

Executives make them.

Boards make them.

Managers make them.

And, increasingly, employees will make them when deciding where—and how—they want to work.

We can use all of it to produce more.

Or we can recognize that some of the dividend might be better invested in producing better work and better working lives.

That’s the grand bargain that I think we need to start discussing.

Because perhaps the most important question about AI and work isn’t:

How much more can people produce?

It’s this:

When technology gives us some of our human capacity back, who gets to decide what we do with it?

Folks, that’s a Work Fit question.

And increasingly, it’s going to be everyone’s question.

Our best days lie ahead.

Note: image in this post rendered on ChatGPT based on our prompts.

I’m Dan Smolen. As host and executive producer of What’s Your Work Fit? I help you make your work and workplace decisions result in better and more satisfying professional experiences and outcomes. I am also a Founding Member of The Future of Work Alliance.

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