As companies rush to adopt AI tools and automation, a new report has suggested that the country's workforce is still far from ready for that shift.

A new study by SHRM has found that around 45% of the organisations it surveyed now see AI and digital skills shortages as their biggest workforce challenge.

The biggest takeaway from the report, perhaps, is the impact of AI on the workforce. It predicts that back-office roles (28%), data and reporting functions (24%), and customer service jobs (21%) are likely to witness AI-driven disruption over the next three years.

The 2026 edition of the SHRM India Skill Intelligence Report surveyed more than 198 senior HR and learning leaders while also drawing insights from over 200 consulting engagements. The findings of the report suggest that while companies understand the growing importance of AI skills, most are still not prepared to scale workforce transformation effectively.

Johnny C. Taylor Jr., President and CEO of SHRM, said, "Around the world, leaders are confronting the same challenge: how to prepare people and organizations for work that is being reshaped in real time. What stands out in India is the scale of opportunity. With one of the world's youngest workforces and a rapidly evolving digital ecosystem, India is uniquely positioned to set the benchmark for how nations build resilient, future-ready talent."

AI adoption barriers go beyond technology

One of the most striking findings is India's formal workforce training rate. SHRM says only 2.3% of India's workforce receives formal training, compared to 68% in the UK, 75% in Germany and 96% in South Korea.

The report also sheds light on the gaps in ESG and green skills. It notes that around 41% of organisations reported significant shortages in sustainability-related capabilities, while only one in 14 companies qualified as advanced in ESG talent readiness.

The SHRM report also suggests that companies may be investing in the wrong learning formats, with around 60% of learning and development budgets currently going towards digital self-paced courses and classroom training, while hands-on learning formats account for just 3% of spending.

SHRM noted that companies may also be investing in the wrong learning formats. Nearly 60% of learning and development budgets currently go toward digital self-paced courses and classroom training, while hands-on learning formats account for just 3% of spending. Only 34% of organisations formally measure the outcomes of skilling programmes.