The Human Cost Of AI Adoption: Are Indian Businesses Prepared For Workforce Displacement?

New Delhi: As Indian enterprises adopt generative AI (GenAI) into their businesses, it has transformed from being a buzzword into a key part of strategy.

According to a recent LinkedIn report, 98 per cent of Indian business leaders are aiming for AI adoption by the end of 2025. Nevertheless, with the rapid increase in AI adoption, a looming danger is emerging: the widening skills gap and the risks of displacing workers without proper AI skills.

The AI skills gap: A growing concern

The report indicates that 54 per cent of HR professionals in India acknowledge that less than 50 per cent of the applications they receive are from qualified candidates. The hardest skills to find include

1. Software development and engineering (44 per cent)

2. AI-related skills (34 per cent) and

3. Soft skills such as communication and problem solving (33 per cent)

This discrepancy is instructing how recruiters should focus to be trained scapegoats, with more that 55 per cent of HR professionals indicating that they will only look at applicants that file who have at least 80 per cent of the relevant skills.

The ethical and regulatory challenges of AI

Karnnika Seth, Advocate & Cyberlaw Expert at the Ministry of Defence, said AI should not only be treated as a line of business but should also be looked upon as an area that needs compliance and ethical law governance. "Recruiters want people who know how to work AI into their business since it has disrupted modern-day business operations and streamlined processes. There is a huge demand for AI expertise, but it’s not just about efficiency, compliance and ethics are equally important. Globally, discussions around AI ethics are growing, and India is no exception. The NITI Aayog’s AI framework and the new Digital Personal Data Protection Act reinforce the need for AI audits and accountability,” Seth told ETV Bharat.

She pointed out that India is taking the lead in the development of AI globally through initiatives like the Digital AI Mission and funding provided for open source large language models (LLMs) development. However, for India to cater to the market specific needs professionally, developed and systematic AI training programs are essential instead of just industry experience.

The human cost: Displacement of the workforce and the upskilling gap

There is an appetite for AI-skilled workers, but the danger of displacing the workforce still looms large. As basic jobs transform, workers lacking AI knowledge are grappling with ambiguity. To maintain a balance, reskilling is imperative to counter the growing chasm between AI-proficient and AI-illiterate people. Ruchee Anand, who heads Talent and Learning Solutions for LinkedIn in India, points to the need to adopt AI infused with human capabilities. “AI is changing the way talent is recruited and nurtured in an organization, but the real unlock is not in just adopting AI, which now gives an advantage, but how to operationalize it. All too often, firms invest in AI products without the requisite skills to exploit these assets and resolve what should be a straightforward challenge, which is a very unfortunate reality,” said Anand. In this ever-changing technological world, soft skills such as creativity, communication and collaboration, in tandem with AI knowledge, are exceedingly imperative.

The shift to selective hiring and AI-powered recruitment

With AI skills in short supply, businesses are adopting selective hiring strategies, prioritizing candidates who already possess the required expertise. This trend risks leaving behind millions of workers who lack AI experience, making reskilling and continuous learning essential.